Getting rid of managers seems like a drastic — and to some, very unwise — idea, but innovative companies like Valve and W.L. Gore & Associates (the makers of Gore-Tex) have made the move to flat organizational structures to much success.
Yet it’s difficult to imagine a workplace without managers when you haven’t experienced it yourself. What’s it like? How does anything even get done?
First let’s examine what it means to be a bossless organization.
Defining the bossless organization
Consider the traditionally hierarchical structure in the workplace, which looks like a pyramid with lots of layers. Your manager has a manager has a manager, and orders and directives trickle from the top down.
Bosslessness means smushing those layers together so that : 1. people aren’t always telling you what to do from on high; and 2. you also get a meaningful say. Companies take this repositioning quite literally, with no more cushy corner offices. Jim Belosic, the CEO and co-founder of ShortStack, sits at the receptionist’s desk, and the desks at Valve are on wheels for easy rearrangement.
Despite the bandying about of the term “bossless” when describing flat organizations, it’s a misleading term to describe what is actually a redistribution of power. Just because there are no business cards or nameplates with managerial titles on them doesn’t mean that those functions aren’t being carried out.
Management and leadership still, and must, occur in so-called bossless organizations. It just means that when nobody’s the boss, everybody has to step up in their own way and manage each other. Belosic puts it this way: “If someone needs something from me, I have 12 other bosses. If I need something from then, then I’m their boss.” It’s management by and of your peers.
Why peer management succeeds
In order for teams to take over management functions themselves, they must have the necessary autonomy. Autonomy and accountability requires companies to trust and empower their employees, which might be a micromanager’s nightmare but makes a lot of sense. When people who know the most about the work don’t have to wait for orders, approvals, and feedback to arrive from channels laid out by organizational chart to move ahead, they can get stuff done — and do it from a position of investment, ownership, and intrinsic motivation.
One study by Greg Stewart and Stephen Courtright on team motivation found that “[i]n high functioning teams the group takes over most of the management function themselves.” Courtright explains that in such teams, people “work with each other, they encourage and support each other, and they coordinate with outside teams. They collectively perform the role of a good manager.”
The bottom-up direction of peer management ends up working because people feel accountable to each other.
How to gain the benefits of flat organizations
It’s unrealistic to think that companies will rush to become bossless, but there are constructive lessons to learn from flat companies. By adopting aspects of peer management and letting go of control-and-command practices that so inhibit autonomy, your team can increase innovation, buy-in, and motivation.
Here are three things that flat companies do to make it work:
1. Make information more transparent.
Hierarchies of people can turn into hierarchies of information, causing bottlenecks, misunderstanding and unanswered questions. The free flow of information is essential for employees to help the company move forward.
For example, at Whole Foods, which is structured through self-managed units, performance and financial data — including compensation and bonus amounts — are made available to everyone. Similarly, the social media toolmaker Buffer practices radical transparency, sharing everything from salary and equity information, self-improvement goals, and even how much sleep everyone’s getting.
When you put everything on the table, you’re armed with the complete, accurate information you need to do your work and unencumbered by power plays, anxieties about status, and disengagement from not knowing what’s coming down the pipeline.
2. Review and recognize your peers.
Recognition for a job well done and constructive feedback often rely on managers taking notice and knowing who did what. By relying on information gained from co-workers who have the most knowledge about the work, a fairer, more complete picture emerges.
That makes a significant impact when it comes to being recognized for your hard work and getting paid accordingly. At Morning Star, there’s a system of peer review for individuals and teams so that feedback doesn’t come from a distance, and pay is determined by a peer-elected compensation committee which also takes into account your self-assessment.
The e-commerce platform Shopify, which is in many ways a flat organization but still has managers, built an internal bonus system called Unicorn. Employees can give public recognition to their peers, which then determines the distribution of the company’s monthly bonuses. Not only does Shopify’s Unicorn system provide a way to encourage support and celebrate each other’s work, it also surfaces relevant information about employees to its managers
3. Be deliberate about building culture.
A successful culture requires paying attention to how processes can best motivate, guide, and help your employees — whether it’s building internal tools like Shopify or changing the office dynamic by having the CEO sit at the receptionist’s desk.
When you put a priority on autonomy, trust, and empowerment, you build a strong culture that has its own stamp because it’s built from the ground up. That doesn’t mean it happens naturally, especially as most people aren’t used to working in nonhierarchical organizations. At Morning Star, new hires even go through self-management training so that they aren’t discombobulated.
Wistia consciously cultivates its culture of autonomy by encouraging its employees not only to think for themselves but be themselves in the process. Their highly distinctive culture has become a “competitive advantage” for this rising startup but it’s a result of deliberate effort. By committing and fighting for its culture, Wistia set into motion a positive loop of growing a team and business according to a strong set of values and trusting its employees take the lead to do so.
How do you implement flat-organization qualities within your team or company?
Janet Choi is the chief creative officer at iDoneThis, which offers a progress management tool. She writes about productivity, creativity, and the way people work on the iDoneThis blog. Follow her on Twitter @lethargarian.