Many businesses globally, like Facility Cleaning International, have been implementing a flat organizational structure. In fact, it is allowing many businesses to become global. Facility Cleaning International said, ”The flat organization is absolutely scalable, so we knew in going global that our model would remain successful.”
What makes a flat organization scalable is its simplicity. A flat organization eliminates or drastically reduces the need for middle managers. Fewer workers, all well trained, are involved in the decision-making process, rather than under multiple levels of hierarchy and supervision.
It sounds liberating, even fun to the person who has eight bosses and has to turn in multiple TPS reports. This kind of work frustration was made famous in the 1999 film Office Space but still exists today.
A flat organization provides multiple benefits. Saving cost is the first and most obvious. Fewer workers and the ability to outsource not-vital tasks make a flat organization great for the bottom line. Innovation and collaboration occur more often because of the proximity to decision-makers. Finally, flat organizations are more flexible and can adjust quickly to changes in the business.
Like anything in business, a flat organization is not without potential disadvantages. If the organization lacks structure, performance can suffer. A flat organization puts a great deal of trust in every employee. That trust can be rewarded greatly when employees are motivated.
Companies large and small are becoming flat organizations. From a minority-owned and operated janitorial services company like Facility Cleaning International to thriving startups like GitHub, Treehouse, and 37 Signals.
Jason Fried, co-founder and president of 37 Signals, runs a successful flat company. He wrote in an Inc. op-ed, “We’re not big fans of what I consider ‘vertical’ ambition—that is, the usual career-path trajectory, in which a newbie moves up the ladder from associate to manager to vice president over a number of years of service. On the other hand, we revere ‘horizontal’ ambition—in which employees who love what they do are encouraged to dig deeper, expand their knowledge, and become better at it.”
Once 37 Signals reached 26 employees, Fried admits it began to show signs of strain. He had to adjust, adapt. However, this strategy can work for a small, medium, or large organization.
This is what a young workforce wants. Oxford University Professor Karl Moore said to Forbes, “Companies like Google are attracting the world’s greatest technical and business minds. But Google doesn’t attract the world’s best based on a high salary; rather, they’re attracted to the casual work environment and wafer-thin hierarchy.”
A younger workforce isn’t motivated solely by money. Employees desire to be able to be involved, have more responsibility, more autonomy.
It has been well documented that workers may have more stops in their career than a generation past or that women still struggle to reach key leadership positions as frequently as men. Flat organizations are working, defying those trends. 37 Signals has lost only five employees in five years. Key leadership positions at Facility Cleaning International are held by women.