Saturday, December 13, 2008

Why Flatter is Better

We often hear about businesses with flat organizational charts, by which is meant the business has comparatively few layers of decision-making between its top management and its front line.

Flatter is better, according to most people. But why?

There are at least two reasons. First, flat organizations are less likely to distort or destroy vital information as it moves up, down, and throughout the organization. Better information means better decision making.

Second, individuals in flat organizations don't have as much incentive or opportunity to behave bureaucratically by seeking more power and pay at the expense of organizational goals. Reduced bureaucratic behavior increases the chances that individual and organizational goals will overlap to a useful degree.

Considering the advantages of flat organizations, it's remarkable that we ever tried anything else. Yet, the unsettling and unavoidable truth is that for most of human history, flat organizations were simply unthinkable, as unthinkable as a man without a king or king without a church. 

In a sense, you could say that all of human history is the messy and sometimes bloody process of flattening out our social organizational chart. Flatter is better in business because flatter is better in society. Societies with stronger horizontal social bonds -- i.e. more individual autonomy -- have proven better at interpreting dispersed information and at adapting to new situations than societies held together by predominantly vertical bonds. 

The unpleasant truth of business is also the unpleasant truth of history: power destroys more creativity than it rewards.

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