Our shift from bureaucratic to distributed leadership took nearly a century. According to Deborah Ancona, a professor of management and organizational studies at MIT, companies in America circa 1920s were "super bureaucracies." Then, in the 1960s, people focused on interpersonal relationships and lots of discussions centered around trust and empathy. In the 1990s, it was all about organizations needing to undergo large-scale changes and vision. Finally, today’s workplace centers on what’s called variously eco-leadership, collaborative leadership, or distributed leadership.
"It’s all about your network," says Ancona, author of X-Teams: How to Build Teams That Lead, Innovate, and Succeed, as in who do you know outside and inside of your team. "If you understand the internal network in your company, you have a higher chance of moving ahead."
Today’s preferred "flat" organizational structure with few hierarchical levels and looser boundaries—the kind that Google has valued since its beginning—may attract more talent and allow companies to grow more quickly, but as more companies flatten, they still need to operate with leadership thinking. What are some things to consider when people prefer no titles? How do you create an organization in which people make moral decisions on their own and adopt a growth mindset instead of a fixed one when there's no one technically watching over them?
In last month’s Neuroscience for Leadership class at MIT, Ancona discusses the conditions needed in a flat hierarchy:
"When we look at organizations that are flatter, there’s both top-down and bottom-up decision making," Ancona tells Fast Company. "That means there has to be a lot more transparency around how decisions are made, hence a lot more tasks are given to people lower down in the organization. There’s more empowerment and freedom given to people."
Everyone in your company, especially those in lower levels of the firm, needs to know exactly why decisions are being made because they’re the ones going out into the world and advocating your cause. They need to know what’s happening in the marketplace and social culture, and how their organization connects to all of this. For this to happen, transparency needs to be something that happens throughout the company.
Having more transparency in a company also allows people lower down in the organization to understand the business model and think with a strategic mindset.
"They understand that they have to think about not only what’s a great technical idea, but can we win in the marketplace and can we make money doing this," says Ancona.
"That means that one has to go higher and train people to be entrepreneurial," she explains. "If they’re in a bad-context command-and-control [environment], they won’t even try. You have to actually develop the skills of being confident in your ability to lead and being able to engage in entrepreneurial efforts. You can’t expect people to innovate and create and move in a rapidly paced environment if they don’t understand how to move."
At online clothing retailer REVOLVE, cofounders Michael Mente and Mike Karanikolas have always kept the flat hierarchy in mind—even as it got more difficult to implement as the company grew—especially when it comes to leadership and communication. Leaders of flat companies need to be level-headed when their ideas are challenged by colleagues above or below them, Mente and Karanikolas tell Fast Company, and you’ve got to be able to take criticisms and feedback from all angles. What this means is employees need to have influence and aid in decision making. They need to be able to take ownership, which is critical to morale and growth.
When teaching your team to think more strategically, Ancona suggests coaching through questions. For example, asking questions like "What are you thinking?" or "How will you get through this barrier" will push people to develop their own thought process and think differently about solutions.
If you’re going to put emphasis on people being innovative and entrepreneurial, they’re going to need access to resources in different roles and areas around the company.
"There needs to be easy connectivity because that innovation and that collaborative environment requires people doing what we call creative collisions," says Ancona. This is where new ideas come from, because people are able to wander from one place to another, purposely meeting and speaking to people across the organization.
She adds: "They need to connect and collide with people who have different ways of thinking, and [thus] mechanisms that enable that to happen. Having a culture that enables people to move freely from one part of the organization to another and having connectors in the organization who connect the people to one another are all part of creating that kind of organization."
Mike Sharkey, CEO of marketing automation company Autopilot HQ, says the flat structure in his own company grew out of the idea that people shouldn't have to go through multiple layers or multiple team structures in the organization to get a decision made.
"I think anytime I’ve seen failure in decision making or getting things done, it’s been because there are multiple layers to that decision being made," he tells Fast Company. "In any role in our company, there’s only one threshold across to get a decision made. I think that’s tremendously important. . . . It also keeps the structure very flat in that everyone goes through the same level of communication. Traditionally, in a big company, you can’t just [web]chat your CEO."
It was Silicon Valley’s startup culture that made flattening hierarchies something to seriously consider, but as companies grow, it’s hard to remain completely flat unless you have the above conditions in place. Ancona advises having "guardrails" to direct these autonomy employees. If you just say, "Okay, go out and have a good time," then you’re not really getting the results flatter organizations are supposed to produce: When there are technically no titles and no bosses, everyone needs to step up and be the leader.