A Blog by Jonathan Low


Jun 23, 2014

Espousing Equality but Embracing Hierarchy

The presumption for some time has been that management is superfluous. In an economy which celebrates the hyper-efficient disintermediation of anything or anyone adding friction without a concommitant increase in value, managers are the ultimate human productivity bog.

They are bureaucrats, so this thinking goes, whose ability to optimize any process has passed. Which is why they are managing rather than doing. 

Most organizations continue to conduct a relentless jihad against anything that adds costs but whose contribution to superior returns can not be quantified. In fact, one might argue that the search for efficiencies has become so obsessive that it is counterproductive because organizational effectiveness declines when so many managers feel compelled to spend precious time attempting to justify the value they add.  

But the trend to flatter organizational structures has been oversold as a reflection both of the need for greater financial and operational competitiveness - the cheaper and fast imperative - as well as an acknowledgement that in the Human Capital Era what the best people need is not supervision holding them back, but the freedom to create.

The tech industry is the best example of this, as the following article explains. But misinterpretation of the data may be fault. Rather than an aversion to or disregard for structure, the discontent may instead reflect a desire for more respect and attention on the part of the employee. Research my colleagues and I have conducted demonstrates that  a common complaint across the globe suggests not a burdensome hierarchy but a lack of respect accorded staff by supervisors, especially one's immediate superior.

It is understandable that this could be conflated into a perception that management, generally, is of diminishing significance. But smart organizations will realize that what a high performing enterprise or those that aspire to that status require may not be less management but more attentiveness to the ways in which the entire institution can optimally contribute to success. JL

Matthew Hutson reports in the New York Times:

As much as people disparage social and organizational hierarchy, it remains ubiquitous, and new research suggests that hierarchies are a form of structure that we embrace in a chaotic world.
People never say they want to grow up to be a middle manager, and some company founders aspire never to hire one.
In 2002, Google decided to eliminate managers from its engineering operations. “We were of the attitude, ‘Who needs managers? They never add any value,’ ” Craig Silverstein, the company’s first employee after its co-founders, Larry Page and Sergey Brin, told me recently. Mr. Silverstein, who later served as Google’s technology director, said this refrain “mirrored the common stereotype at the time, of managers just adding levels of bureaucracy.”
Google’s experiment with a manager-free engineering department lasted only a few months. “We realized managers actually serve a purpose, resolving conflicts, answering questions,’” Mr. Silverstein said via email. “It was a revelation to see engineers pleading for more management.”
As much as people disparage social and organizational hierarchy, it remains ubiquitous, and new research suggests a reason. A recently published paper in The Journal of Personality and Social Psychology suggests that hierarchies are a form of structure that we embrace for comfort in a chaotic world.
The paper, by Justin Friesen of York University, Aaron C. Kay of the Fuqua School of Business at Duke, Richard Eibach of the University of Waterloo and Adam Galinsky of the Columbia Business School, builds on the notion of compensatory control: When we feel a lack of personal control, we compensate by looking for order or predictability in our environment.
So we desire and perceive governments and gods to be particularly powerful. Those who suffer inequality often even defend the social system responsible, rather than accept that life has been unjust.
The researchers found that an online sampling of Americans, on average, rated the concept of equality to be more “natural” and “fair,” and “the way people should be organized,” compared with hierarchy, but also more “chaotic.”
Yet when they asked participants to remember a time when they lacked control — thus threatening their current sense of control — the participants expressed a greater desire for workplace hierarchy, by endorsing statements like “Every company needs a boss who is in charge of everybody else.”
So we declare that hierarchy is unnatural and unfair, but deep down we’re drawn to it — particularly in times of uncertainty. What’s more, it serves some purpose. “As a group, when we feel threat, hierarchy can help us respond to that,” said Mr. Galinsky, who is a business professor. “That’s what the military is all about.” In a crisis, you need a system that acts quickly with little debate.
Hierarchy also works well for manufacturing companies, or any organization that relies on well-defined procedures. “You have to find a balance between deference and contribution,” Professor Galinsky said. “It comes down to one simple principle: How valuable is the input and perspective of lower-powered individuals?”
Increasingly, companies are valuing diverse input and turning to flatter structures. But even companies that supposedly deplore the value of hierarchy have status and power differentials, formally or informally.
The video game company Valve seems like a symbol for the flat organization. Valve posted its handbook for new employees online in 2012. “We don’t have any management, and nobody ‘reports to’ anybody else,” it says. You work on what interests you. The desks sit on wheels, so if you want to change projects, you unplug, roll across the office and plug back in. Yet Valve has temporary team leaders who help coordinate projects, and employees rank one another when calculating compensation.
The design firm IDEO also aims for flatness but retains an element of verticality. “The idea of a flat hierarchy is a little bit of a myth that we even tell ourselves within IDEO,” Duane Bray, a partner, told me.
For instance, employees progress through four “levels of impact”: At the “individual” level they focus on their core skill set; at the “team” level they start to have responsibility for others; at the “portfolio” level they look at how collections of projects come together; and at the “enterprise” level they connect globally and take all of IDEO into account in their decisions.
Cameron Anderson, a psychologist at the Haas School of Business at the University of California, Berkeley, has written about the dysfunctions of hierarchy and encourages his M.B.A. students to pursue flatness — but not to its ultimate end. “It’s often useful to have at least one person who serves a role of leader,” he said, “even if that role is more of a coordinating function.”
Americans talk a lot about egalitarianism, but sometimes we just want to know: Who’s in charge around here?


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