Pancake or Lumpy? A Look at Flat Organization


When you’re looking at the organization of a startup company today, the general trend is toward flat organization. Flat as a pancake. What this means is that there are no layers of management between workers and the head of the company. So everyone reports to that person (often the CEO) and no one has a task master standing over them, telling them what to do.

Sounds appealing, right?

Flat organization has been happening for a while, but it’s becoming even more popular as Generation Y enters the working class. These young adults have never been cool with bureaucracy, and they don’t have much of a penchant for it now. Hence, when they get the chance to work at organizations like Google, Facebook, GitHub, or other companies embracing the flat, self-managing cultures of the 21st century, many of them grab it.

But while terrific in some settings, flat organization isn’t as easy—or as bug-free—as it sounds. It’s true that flat has many perks; for example, companies can reduce costs by doing without managers, creativity has more freedom to flow from all members of the team, and many employees enjoy the motivating, challenging environment of self-management, which increases happiness and retention. In addition, a flat organization helps workers communicate more quickly across departments, which accelerates company growth. It’s no wonder that the flat approach is favored by startups, who need this kind of quick-draw action. However, as companies hire more workers, take on more projects, and come to rely on careful decision-making and a long-term vision rather than a “what will keep us alive another month?” attitude, an absolutely flat environment can be difficult to maintain. With the minimal leadership, chaos may reign, communication between teams may lack, and the overall direction of the company may wander. Flat tends to work better in small organizations or in smaller departments of large ones. Not to say it’s impossible to scale flatness, because some companies (specifically, GitHub), are doing it, but the pros may not outweigh the cons for everyone. Instead, incorporating aspects of flat organization into a more traditional structure (or vice versa) can keep a cultural flatness while implementing the streamlining effect of management.

Various companies have attacked this “flat with management” (I like to think of a pancake with chocolate chips) question in different ways. Some, like 37Signals, which makes web-based collaboration apps, has rotating team leaders. Members of their team take turns leading projects, so “management” stays fluid and in touch with the workers because they are all, in fact, the workers. Other companies do a variation of this, having their managers involved in the hands-on work at the same time that workers have a say in management.

If this pseudo-management thing isn’t your style and you feel like having actual managers will be helpful to your company, there are ways to have them contribute to a flat culture and not bog your system down with bureaucracy. Rather than posing managers as overlords making sure work gets done and reported to the chief officers, managers on take the roles like coach, mentor, enhancer of work, and touchpoint of communication for projects. Thus, they become facilitators who actually help work get done.

To switch it up again and go with a hybrid structure, like tech firm Qualcomm Inc. has, another option is to have managers that workers directly report to and that measure their performance, but also have individual project managers who are over projects. I couldn’t find much information on how Qualcomm does this, but in theory, it could be the best of both worlds for those wanting to go flat but worried about keeping their company organized and progressing toward specific goals.

Finally, if you want a flat culture but your company requires management in its organizational structure, that doesn’t mean you have to crush your flat dreams into . . . something flatter . . . well, anyway. Flatness can also be reflected in a company’s culture, as those working at Pivotal Labs, a software company, can testify. Though their company had grown to a size where it needed directors, managers, and associate directors to keep it running smoothly, its employees still consider it flat. They work in self-directed teams and have a lot of control over their projects; their managers help them out rather than boss them around. The arrangement works for both sides, proof that management and flatness can join forces. Of course, a company like GitHub might argue that all these “lumpy” flat structures are unnecessary because completely flat is best and can work regardless of a company’s size. GitHub is enjoying immense success right now, with more than 150 employees to date. Time will tell if the flat structure can hold as the company continues to grow.

One last issue regarding flatness—if employees have no way to move up the chain of command because there isn’t one (or isn’t much of one), how motivated will they be to stay with the company? Here’s where enticements other than promotions kick in. Many flat organizations focus on rewarding employee performance with challenging, exciting projects to work on; so-called promotions happen horizontally rather than vertically, meaning that employees get opportunities to become masters of their craft and do what they love. Other ways to reward employees include pay raises, stock options, vacation time, insurance, and anything else that can take care of a worry or make life convenient. The theory here is that if employees are happy in their jobs, they’ll stay even if they’re not getting promoted in the traditional sense. However, there don’t seem to be many specifics on how to decide who gets “promotions,” beyond saying it’s “those who add the most value to the company” and “those who go above and beyond.” Organizations are left on their own to work out how to decide that.

So in the end, there are a lot of things to keep in mind when deciding on an organizational structure. Size is a big consideration, as is desired company culture. The good thing is that any structure is a possibility until proven otherwise. GitHub, against the odds, is scaling flatness. Jive’s technology team is deciding its future but may well follow suit. What will your company do?