Slowly, but finally companies seem to understand: department-oriented organization is counter-productive in today’s world. What’s needed is team- or process-orientation. The chief difference to focus on is not between top and bottom, but between outside and inside. It’s about the customer, not the boss.

Or so I was inclined to believe when I read „The Office Hierarchy Is Officially Dead“.

But then… Despite the optimistic view of the article I have a feeling, this is not yet what I’m envisioning.

„Only 38 percent of companies in a recent survey say they are ‚functionally organized.‘ For large companies with more than 50,000 employees, that number shrinks to 24 percent.“

62% of companies are not „functionally organized“ anymore? Sounds great – but where are those companies. I don’t meet them in my business as a consultant and trainer for sustainable software development. Strange, isn’t it?

And what do those 62% of companies do?

„We’re now operating businesses as networks of teams“


[C]ompanies are […] ditching rigid levels and titles for something more fluid.


I see teams in software development, of course. And sure I see projects going on in companies even across departments. But I’d say, that’s hardly new. And most notably: That does not mean any „rigid levels and titles“ have been ditched. Not a single one.

I’d even say: the situation has gotten worse. Because people now belong not only to a department but also to one or more cross-departmental teams. That means, they now need to report to some department manager as well as some team manager.

Despite what the article wanted to convey to me it sounds like The Matrix Organization 2.0.

I guess it’s no small wonder this also is reported:

While the hierarchy may be heading toward extinction, the move to team-based work hasn’t been entirely painless. The same Deloitte survey from last year found that 74 percent of those surveyed rated the work environment as complex or highly complex.

Reorganization in such a way hasn’t lessened any pain, it seems. The pain is even increasing. I suspect what’s called „complex“ in the survey is just an euphemism for „pressure“. People now feel more under pressure.

Bottom line: The corporate world is not suddenly (or even slowly) turning into a more humane or even efficient place to be.

„Less hierarchy“ is the next management fad. It’s bound to become the next cargo cult. And this will increase internal tensions, lead to conflicts, and in the end decrease motivation as well as productivity.

I think, there are at least two reasons for this to happen:

  1. Less or even no hierarchy misses the point. Hierarchy is natural and necessary. Where there is no hierarchy in a group yet there will be one soon; naturally, from within, due to internal differences in skills or interests. Also coordination needs hierarchy. And quantity needs hierarchy lest it becomes unmanageable. So if somebody is talking about „less hierarchy“ he needs to specify what kind of hierarchy he means. The article is alluding to leadership or management hierarchy, not coordination hierarchy. As long as there is no differentiation between the two the baby is bound to be thrown out with the bath water.
  2. As long as management wants to reach some financial goals by restructuring a company towards „less hierarchy“ it’s essentially acting hypocritically. Because truly giving up leadership hierarchy means abolishing management in the traditional sense altogether, yes, even the CEO. Truly giving up leadership hierarchy would mean to become self-organized, democratic, even sociocratic. There is no „a little bit pregnant“ and there is no „less hierarchy“. Because any remaining leadership or management hierarchy is in opposition to true autonomy below it.

„Less hierarchy“ or even „no hierarchies“ sounds like a tool. But it is not. It’s a way of living, a fundamental attitude towards the world. It’s about values and people. Whoever wants to instrumentalize it will fail.

But most of all it’s besides the point. Companies and corporations should not view hierarchy as a problem. The problem is how the deal with goals.

Studies have found that hierarchy leads to conflict in teams, which is how most work is done these days.

I think, what studies have found is a straw man, a surrogate. Hierarchies do not lead to conflicts. Or if so, then how? Is there a fundamental conflict between high and low because there are different levels? No.

Problems occur in hierarchies if hierarchies are used to serve different goals. Goals can be in conflict. So if companies and corporations want to do better they need to reassess how they are dealing with goals.

Detour: When you talk with your spouse about the next vacation and you want to go to Bali and she wants to go to Rome, then that’s a conflict. One is striving towards this goal or better: destination, the other one towards that destination.

How to resolve the situation? First, there needs to be willingness on both sides. Second, ask „Why?“ Get to the bottom of the difference. What’s behind the different destinations, what kind of goals and needs?

Maybe you find out, she wants to go to Rome because she’s interested in history. And you want to go to Bali for the palm trees and beaches and cheaper hotel deals.

And maybe on an even deeper level it’s about curiosity (she) vs. relaxation (you).

You see, lot’s of levels of conflicts. How to overcome them? Well… find a vacation destination which serves both your needs at the same time. Where can you relax while she can satisfy her curiosity? I leave that to you to sort out 😉

What I wanted to illustrate is: even without any hierarchy there can be lots of conflict.

Now back to hierarchies.

What makes hierarchies seem so problematic in organizations is the entanglement of so many aspects. I see at least three:

  1. Coordination: The top tells the bottom what to do, because the top has a better overview.
  2. Leadership: The top sets the rules for the bottom, because the top „owns“ the organization somewhat more.
  3. Disciplinarian: The top decides about status and benefits of bottom.

There is no problem inherent in a top deciding about matters of the bottom. This is what a conductor does with regard to the members of her orchestra (coordination). This is what a parliament does with regard to its citizens (leadership). This is what a judge does with regard to members of the people (disciplinarian). And people are living very happily with that.

However, if a top assumes responsibilities of several aspects, conflicts will arise. Coordination might require one decision but leadership another. Proverbial example: Coordination (producing high quality) would call for slower progress, but leadership (making shareholders happy) would call for faster progress.

As long as team members feel there are conflicting goals, as long as there is coherence missing, hardly anything will improve. Whatever a company or corporation whats to achieve it’s not hierarchies per se standing in its way. It’s a lack of focused energy.

And what stands in the way of true focus? Conflicting goals.

And what causes conflicts, or to be more precise: what makes conflicts so hard to resolve? Intransparency and dishonesty.

So let’s stop bullshitting about hierarchies. Start talking about goals and honesty.