- Companies with flatter management structures encourage ‘hierarchy of purpose’ teams that make better and faster decisions
- The more CEOs can delegate to their leadership team, the better they generally feel about their use of time
- Powerhouses like Google and LinkedIn are morphing their company structures to include smaller, more agile and innovative teams.
Is your company’s executive team continually evaluating the organisational design and adapting to meet the needs of today’s – and future – customers and employees?
A survey of CXOs, VPs, directors and managers found that across seniority levels, leaders reported that seven was the ideal number of reports and that 11 was an upper limit for most situations.
However, Brian Wong, founder and CEO of Kiip believes even that is too many. His take? The ‘two pizza’ rule – if you can’t feed your team with two pizzas, then you have too many direct reports. “The ideal number of direct reports? Five to eight,” according to Wong.
The big idea: Small teams tap into valuable assets
“The idea of working within small teams is believed to help diminish various innovation killers like groupthink and social loafing,” says FastCompany’s Rachel Gillett.
Research by Deloitte on the network of teams concept found that a smaller team structure encourages the following traits in team members:
- A higher degree of empowerment
- Stronger communication skills
- Rapid information exchange
Smaller teams with cross-functional members enable each person to focus on addressing particular business demands. “These small teams tap into one of the most valuable assets of the organisation: The skills, talent, and strengths of employees,” says Gillett.
What’s in it for you: Free up time to generate value
The more CEOs can delegate to their leadership team, the better they generally feel about their use of time, according to HBR. “It eases the burden of needing to get personally engaged, following up, and asking others to report back.”
“As teams become more cross-functional, individual team members are more frequently contributing to multiple efforts,” adds Dan Pupius, co-founder and CEO of Range.
“This is leading more companies to decouple their organisational structure from the management hierarchy,” says Pupius. “Which in turn is making it possible to maintain a relatively flat team hierarchy – or ‘hierarchy of purpose’ – while ensuring supportive management structures are also in place.”
Make it happen
As companies continue to adapt to a fast-changing environment, here are 3 options your business can use to shift its structures from traditional models towards flexible teams:
- Flatter organisations have fewer layers in hierarchy, faster communication, and include all employees in planning. Team members are cross-functional and involved in several roles.
- Flatarchy is the combination of a hierarchical and flat structure, where certain departments are dedicated to innovation and new product development, like at Google and LinkedIn.
- Holocracy has no position names or departments, and every employee can be involved in different groups simultaneously. “The goal is to include every individual in decision-making and give everyone the opportunity to work on what they do best,” says Aušra Grybauskienė, Managing Partner and Consultant at Talentor.