New management structures which empower staff cannot succeed without strong leadership, as Dan Matthews discovers
One of the best one-liners in football history was on the subject of leadership. When Brian Clough was asked how he dealt with players who disagreed with his tactics, he replied: “We talk about it for 20 minutes and then we decide I was right.”
This, in a nutshell, describes an historical approach to management in organisations across the board. Strong, autocratic leaders laid down the law and their lieutenants conveyed orders along a rigid pecking order until the message reached the grunts who carried out the work.
Not anymore. New communications technology means messages now go direct from the top to the bottom in one go. But it has also empowered young people to question goings on in the higher echelons of management and to demand more involvement in key decisions.
Flat management structures were not born from a new breed of benevolent leaders, they came from opportunities to save money and pressure from below. But now the new environment is here, what are the pros and cons, is it even desirable and how can bosses make it work without losing control?
Nick Shaw, chartered occupational psychologist at global advisory company CEB, thinks justifying the new approach is easy. “The only way that leaders will be successful in delivering positive outcomes for companies is to work collaboratively, harnessing skills and motivating people in different teams,” he says.
To achieve this, leaders must be adaptive, while those preferring rigid control jeopardise innovation, staff productivity levels and ultimately business performance. This approach also restricts the flow of information, data, insights and ideas across the firm.
In part, flatter hierarchies are a response to the rise of Generation Y, the grown-up, politicised, self-empowered and technologically adept reprint of Generation X. Millennials, as they are also known, question the basis of authority and want their voices heard.
Bosses are invited to encourage this group in different ways. Some will revert to clichéd templates and opt to sit among their team in a show of solidarity, others will bulk-buy ping-pong tables and bean bags or book quarterly team-building days to encourage cohesive thinking.
GENUINE AND AUTHENTIC
But the reality is flat structures only get the best out of people when they are genuine. Leaders must be authentic and not create workplace policies that are half-hearted exercises in me-too management. Everything should be for a reason.
Remember too that leadership remains a vital component of successful organisations. Flatter hierarchies do not remove the need for clear, definite direction and senior managers will do no good by recreating themselves as cuddly toys or company punch-bags. Even in this new environment, weakness is not a strength.
James Petter, managing director at EMC UK and Ireland, sums up the ideal approach. “Leadership and hierarchy are separate issues. The importance of strong leadership is as vital in one type of organisation as another: clear strategic direction is rarely the product of decision by committee,” he says.
Flat structures only get the best out of people when they are genuine
“However, strong leaders in agile businesses will need to draw on the expertise around them and in this way traditional hierarchies are dissolving. If you can’t capitalise on the insights of younger experts in the organisation because you insist on it filtering through a management structure, you’re setting yourself up to lag behind your competitors.”
Ed Molyneux, chief executive of online accountancy provider FreeAgent, which has grown from three to fifty three staff in seven years, has practised this method to good effect. “I try to set a clear strategic direction and then be collaborative about the details. My role has evolved to make more time progressively for big-picture issues like strategy and culture,” he says.
Despite the positives, the new model is beset by pitfalls. Hierarchies suit certain organisations, the police force and the Army to name two obvious examples. They are vital for quick decisions, in emergencies such as a fire or IT meltdown, but even in the day-to-day world decisions must be made and orders delivered.
“Autocrats ensure tasks are done quickly; they make communications clear and they can respond quickly to external changes. It’s argued by some that autocrats mean less stress – they make the decisions and take pressure off the staff,” says Mandy Rutter, psychologist at Validium, a psychological health services provider, who argues that autocracies are outdated, but have some merits.
There is also a big question mark over how organisations identify responsibility for either failings or achievements. If democratic groups make all the decisions, how do you know who to blame and who to praise?
The idea of career progression is under threat in this set-up. Motivating individuals is a tried-and-tested way of growing a business and, if you strip out mechanisms for identifying good performers from bad ones, you risk losing that mechanism.
Or, says Nikos Bozionelos, a professor at Audencia Nantes School of Management, you just get a big mess for HR to clean up. “In theory, shared responsibility means the whole team takes the blame. In practice, this isn’t the case,” he says. “In fact, we see that autonomous work teams in flat structures are associated more with workplace bullying as there are fewer controls. Often the upper manager will be used as a scapegoat when problems arise, but this fudges the issue as the real problems are happening at a lower level.”
Gareth Poppleton, managing director of Retail Merchant Services, believes the solution is all about striking a balance. “In a less hierarchical eco-system, it’s important to strike a balance between developing employees and micro-managing, but also knowing when to step in and give direction in the interests of the business.”
So who is the ideal leader for a 21st-century workforce? If you’re looking for a template to copy, Mr Bozionelos has an answer for you in the form of a 20th-century chief executive, Jack Welch of GE.
“He could inspire, be respected, create great expectations and develop the sort of relationships which give subordinates the impression that something special is going on between them,” says Mr Bozionelos.
“Even after he retired, I spoke to Indian GE managers who talked about him as if he was a friend of theirs, despite never having met him. The ideal is, therefore, to make all employees feel that you’re there with them no matter what.”