The way you organise and structure your business has an immense impact on your company’s future. It influences not only the overall decision-making process but the way you build relationships with your clients and grow.
Most companies use a traditional top-down order known as vertical. But recent decades came up with an alternative — horizontal or flat leadership.
Let’s find out what it means and how to delegate responsibilities in the company where everyone is their own boss.
What is the difference?
Vertical structure
Vertical businesses have a strong hierarchy, with executives at the top having the ultimate power, making big decisions and delegating work to lower-level management, similar to a pyramid. That’s why in such companies information mostly goes from the top of the organisational pyramid to the bottom creating a highly supervised, low-autonomy environment.
Horizontal structure
Horizontal or flat companies are just the opposite: there are very few managers and power is shared more broadly. In a horizontal structure, the company delegates tasks to certain employees, successfully bypassing the “chain of command”. That’s why in horizontal organisations every employee has an opportunity to implement changes without having to obtain authorisation from the upper levels of the company.
What are cross-functional teams?
In vertical structures, each department is separated by specialty. For example, the sales team is one group, the marketing team is another.
Whereas in horizontal organisations task delegation is quite different. Employees of horizontal companies work in cross-functional teams — groups of people from different functional areas working together to achieve a common goal. This also breeds an environment for better teamwork.
Examples of horizontal companies
When it comes to flat leadership structures, people usually think of startups or small businesses first. But in reality, the size of the company has nothing to do with its structure.
For instance, the online platform Preply uses cross-functional teams. The digital music service Spotify consists of self-organising and colocated ‘squads’.
The largest travel search engine Skyscanner has also implemented the model of cross-functional ‘squads’ and ‘tribes’ with a high level of empowerment and flexibility.
Even such a multinational automotive giant as Toyota mixes both approaches positioning itself as a unique horizontal-vertical keiretsu (a Japanese term referring to a business network made up of different companies).
Advantages
High-cost efficiency
As it has been already mentioned, in the flat organisational structure, there are very few or no management layers at all between the executives and the staff. It means fewer high-paid positions in the company and fewer salary-related expenses, giving you the opportunity to save some extra money. Not only that, there is more incentive for employees to work together to achieve a goal, as everyone benefits from success. When there are fewer managerial positions, money is displaced more evenly among the workers and creates more positive relationships.
Fast decision making
Greater freedom and autonomy significantly speeds up the decision-making process. Simply because employees are able to make decisions on the spot without spending time on consulting the higher leadership echelons at each step. Higher efficiency means more productivity, and therefore raising the possibility of more innovative solutions simply because more people are involved in the process.
Positive working environment
Research has shown that the absence of a strong hierarchy increases employee satisfaction. Moreover, employees in flat companies become much more collaborative and open. Emphasis is no longer placed on the individual, but the teamwork, which makes people unite and find solutions together. There is less competition and more helping hands, which also fosters more productivity.
More freedom and self-governance
This increases morale because workers don’t need to answer to a higher power. Employees feel less pressure to churn out results and can focus more on the quality of their work rather than time and efficiency.
Clear communication
No longer do workers need to go through multiple channels/personnel to have a proposal or decision green-lit. This saves an enormous amount of time (depending on the size of the company) and no ideas and intentions get distorted along the way. It allows employees to communicate clearly and efficiently their ideas to necessary team members.
Less dominance
As mentioned before, the flat structure creates a space where the employees’ level of independence increases. Without a clear leader, the workers feel less pressure, have less people breathing down their necks and demanding results. This could also produce a less stressful environment and nip resentment in the bud.
Image: Unsplash
Disadvantages
Easy to lose control
Even though the horizontal structure excludes a pyramid-like relationship model, it doesn’t mean there are no leaders at all. To function properly even a cross-functional team needs a mentor — to educate, delegate work and at least follow up on their progress. Otherwise, the decentralised structure and a lack of control can lead to constant finger-pointing when things go wrong. As they say, “With great power comes great responsibility”.
May increase turnover rates
Highly-skilled and ambitious workers may find the absence of career prospects and unlikelihood of promotions frustrating and lack motivation. Thus, an employee who seeks an advanced position or something fresh may lose their interest and start looking for another job instead of staying put. The high turnover rates can impact company productivity as well.
Hard to implement
Some companies can have difficulties with a new task delegation model and face challenges. Employees who expected to fulfill a concrete role all of a sudden would be doing pieces of other jobs and could lose focus on their primary tasks. This could have the opposite effect and lead to the workers getting less done, or slow down company productivity.
May create power struggles
When everyone has arguably the same amount of power and control, it could lead to unnecessary tiffs among peers. When there is a lack of a centralised power, stronger personalities become more apparent and this leads to more disagreements and overall discontent within the office.
Role confusion
When there is no clear guideline to abide by regarding what position an employee holds, he or she might be expected to deal with a multitude of different tasks. This could result in ambiguous roles and make it hard for workers to focus on their primary tasks. Not only that, but since there is no clear cut definition of a person’s scope of work, unwanted tasks could get pushed around and dumped on each other, and therefore breeding more discontent at work. There is also the question of who takes the credit for certain ideas and implementations.
A lot of wasted time
Since people will generally have equal say in a horizontal structure, it could lead to an abundant amount of time wasted just getting through the initial negotiation and communication states. Since there are also no clear roles and parts to play, perhaps due to miscommunication two employees could be carrying out the same tasks for a prolonged period before anyone notices.
Tips for developing a horizontal structure
Here are some key points of forming a flat team:
- Hire employees who prefer to work in groups and able to tackle problems on their own initiative.
- Find a leader who knows how to delegate tasks effectively, keep the team on track, and moderate the working process if needed.
- Set up clear-cut, transparent, and explicit roles and expectations. Make sure everyone has the same understanding of your goal.
- Do not hesitate to bring in consultants to help.
- Work team-building activities into your organisation.
- Ask the team to consistently re-evaluate their progress.
- Strive to create more incentives to motivate workers.
- Team leaders should be encouraged to follow-up with their team consistently.
- Encourage more interdepartmental and cross company partnerships on projects.
- You could even look into a hybrid of the vertical and horizontal structures and adopt the advantages of the vertical and integrate it into your flat structure.
- Implement standardised procedures to help formulate a better understanding of what is expected of each department.
In Summary
If arranged well, horizontal management and cross-functional environment can work wonders for a company’s success. People who cherish freedom and don’t want to be forced into a corporate box can unlock their creative potential and drive your business forward. It’s a win-win situation.
However, if not planned well or poorly realised, the horizontal structure may transform your organisation into a dysfunctional and unorganised setting.
But if you learn how to delegate responsibilities properly and create a transparent atmosphere for communication, your business will grow and prosper.
About the Author
Susan Craig is an HR manager, personal trainee in management, freelance writer and active guest contributor.
