Sue White looks at companies that have blurred the line between "chiefs" and "indians".
Digital-marketing outfit E-Web Marketing might be working at the pointy end of its field but, until recently, its organisational structure was old school.
"We had a CEO and COO, then a number of departments [siloed into areas of expertise] like search-engine optimisation, client services or social media. Each department had a 'head of' who oversaw the entire department," a business analyst at the 39-person agency, Irene Lee, says.
A few months ago, a staff survey showed the structure wasn't working. Sure, techies liked sitting near other techies and the client-services people enjoyed knowing what their colleagues were up to but communication across the business was poor.
"It sparked the question of how to solve this," Lee says.
The solution? Move the company to a flatter structure. The old hierarchical approach has been replaced by "pods" made of cross-functional teams, who now work together on all the same clients. It's already working well.
"We've had great feedback," Lee says. "If a services person is on the phone to a client, others in the pod can overhear it and be in the loop; before, they were over the other side of the office. They're much more integrated."
Most of today's organisations are hierarchical. In these tall pyramids, senior managers sit at the top and work on strategic planning; middle managers create and implement operational plans; and supervisors oversee workers, who carry out the tasks. It's how many of us are used to working but it's not the only way.
Flat organisation structures have fewer people in the middle, which supposedly creates better communication and gives workers more of a say.
This has been the experience of Chris Murphy. For the past seven years, he's worked at software consultant ThoughtWorks, where he's now the managing director, Asia Pacific. ThoughtWorks has operated under a flat structure since it began 17 years ago.
"There's a very limited hierarchy; we have a small management team of about eight in Australia, then everyone else," Murphy says.
His own role sounds impressive but in this organisation, titles can be deceptive.
"We've endeavoured to create an environment where career progression is not associated with moving into management," he says.
It's also not the highest-paid part of the business. "Some of the senior technical consultants might be higher paid," he says.
With 2000 employees globally, growth of 30 per cent a year and enough applicants that only one in 200 gets in, the structure seems to be working. But what happens to all those managers?
"The patriarch of modern hierarchical organisations, Frederick Winslow Taylor, said you should build organisations around a large pool of non-skilled workers and put in place rules and management lawyers to ensure those tasks are being done," Murphy says. "We look to flip that on its head. We employ very skilled knowledge workers. They're educated, skilled and, frankly, very good at making decisions about their day-to-day role."
With greater autonomy given to employees working in flat structures, the managerial role becomes more about providing vision and support. At E-Web Marketing, former department heads are now part of a panel who sit in their own pod, available to offer
mentoring or guidance.
"Before, as an individual you only had one person to talk to for advice," Lee says. "If you didn't click with that manager, that was challenging. Now you have eight people, each of them has power to make a change for you."
Interestingly, by giving more power to their employees, managers are needed less for the smaller issues. "Before, when a programmer hit a hurdle, they'd go to their head of and ask them for advice," Lee says. "Now, they talk to their pod and try to develop
a solution between themselves. If they can't, they go to a panellist."
Of course, a flat organisation doesn't automatically herald a utopian workplace.
"In interviews, I tell candidates it's the best and worst of worlds," Murphy says. "At best, there's autonomy; at worst, ambiguity, as you don't necessarily have a clear reporting line or job description."