The CEO of a well-known US company in Japan contacted me recently to ask whether I thought flatter organizational structures are better than more hierarchical ones. He learned that vital information from the ranks was not getting to him fast enough and thought that a flatter structure might resolve the problem. He was, in fact, asking the wrong question, because his question presumes cause is organizational structure, whereas it might not be.
A more pertinent question would be why information flow is slower than he would like. I asked him that and he said it came down to two managers he felt were problematic for different reasons. In at least one of the cases, he realized that flattening the organizational structure would not help at all, whereas in the other, it is merely a band-aid that does not address the underlying cause, which lies with the manager.
There are only four reasons in the universe for a performance deficit in an individual, without getting into exceptional cases of mental health, such as depression.
- “I don’t know how to…”
- “I don’t want to…
- “Even if I wanted to I can’t…”
- Some combination of the three above
Treatment for each cause is different. You resolve “I don’t know how to…” causes with education. Note I say education here and not training. You train animals. People you educate, and there is a difference. See my video on this.
You address “I don’t want to…” by enlightening people about their self-interests.
The “Even if I wanted to, I can’t” cause is about structural impediment and resource lack. You address these by fixing processes, opening lines of communication, demarcating overlapping areas of authority, and providing sufficient budget, people, time, infrastructure, know-how and technology to name a few possible treatments.
I asked the CEO, which of the four he felt is cause for each manager. The CEO believes it is likely “I don’t want to…” for both.
The CEO had been ascribing a “Even if I wanted to I can’t…” solution to an “I don’t want to…” issue. So while flattening the organizational structure may allow lower level staff to circumvent their manager, it does not resolve the problem of the manager whom staff should not need to bypass in the first place. In addition, flattening the organizational structure only for this purpose is likely to result in a raft of other issues that he will need to address later.
The CEO agreed with me, but still feels that an organizational structure change is the best immediate solution for him. That may or may not be so, but at least now he can make his decision about what to do with a clear understanding of what causes the issue in the first place.
My guess is that the CEO will ultimately need to deal with the “I don’t want to…” cause. Unlike good whiskey, such issues do not improve with time.
I suspect this CEO already knows that.