Why No-Hierachy structure better support organization long-term strategies.

This post started as a drawing on a napkin while I was challenged by a friend of mine to explain why I do believe that No hierarchical organizations are better for our current and future world.

Flights always provide the perfect environment for long and fruitful discussion. The complete separation from all stimulation creates lengthy and meaningful conversations. So, when I found myself with a friend on a long flight a few months ago, I started to chat with him about No hierarchical organizations and why they are better solutions for organizations now and in the future.

In some point of our conversation, the chat was more focus on why no-hierarchical organization structures are supporting better organizations long-term strategies, although most of the people still believe that hierarchical organizations are more efficient and therefore are a better fit for today’s world and the future.

Hierarchical organizations have some apparent advantages. It’s easier to make a decision, to change direction, to lead (or manage) and to show short-term successes. But there are also many disadvantages for hierarchical organizations. One of them is a weak connection or disconnection between the leader steering to a particular direction to the group that needs to follow the leader goals. Hierarchy creates a weak and fragile connection between the individual setting direction and others that need to follow the direction. When the leader set a long-term strategy, the weak and fragile links between leader and groups are even more problematic.

Diagram A

Org structure resilint.002

As you can see in diagram A, The connection between leader or manager and the group depicts by a belt. This belt is used to create synchronization between the gear depicts the leader, and the gears depict the team. This belt represents a weak and fragile connection between leaders and groups (as any change in the belt will change the impact on the other gears, especially if the belt tears). Hierarchy, by definition, also has more layers of leaders/managers. Therefore leader direction is going through intermediaries that add their interpretation to the original message. Last but not least the hierarchy structure created single expertise teams that depend on leaders to communicate between teams.

In this structure, any change in the leader function or any change how the direction being communicated and followed by the leader (the belt), end up with disconnection or utterly new direction (when new leader introduced to the structure). That might be one of the reasons why it’s so hard for organizations to create and execute long-term strategies, but it’s much easier to reach short-term goals.

Diagram B

Org structure resilint.003

One of the known alternatives to Hierarchy is Holacracy, but also this structure has several disadvantages, most of them the same you’ll find in hierarchies. Holacracy improved the way that the team operates, but in a nutshell, replace people hierarchy with circles (group) hierarchies. Holacracy also does not actively request circles to be multi-expertise. While leaders are nominated and can nominate partners to roles, the same problems that we mentioned for Hierarchy still applicable for Holacracy as well. Diagram B depicts Holacracy. You can see that belts again describes synchronization, the only difference that in this structure is between teams.

Diagram C

Org structure resilint.004

No Hierarchy organizations structure in a different way. First, as the name implied there aren’t any managers or leaders that drive other people to reach goals, there are teams that are doing it together. Second, the teams are multi-functions by design. As you can see in diagram C, no belts exist in No Hierarchy organization. All you can see are many gears depicts different expertise working together to perform certain organization function. Organization functions are connected one to each other based on connections between different gears from various business functions.

The disadvantage of this structure is a challenge with fast decision making and the time it takes to create an architecture whereas many relations exist between gears. The advantage of this structure is that you can remove many gears out of the current structure, but yet the functions will perform as they agree following the culture they created. Such structure can support long-term strategies as there isn’t any dependency on one gear or even several gears to reach long-term goals.

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