I regularly talk to founders and leaders about how they run their organizations and there is something interesting I bump into from time to time: leaders of small to mid-size companies or teams, just starting up and working on innovative products or projects, tell me that their company is ‘flat’. 

They sense that they do something differently, that they have innovative ways of running their companies, and they’ve probably heard the term flat in various contexts before. And so, since they don’t have any hierarchy they assume they must be flat.

They are indeed flat in a sense of not having a hierarchy, however, I find it very interesting that it’s not always clear what exactly is meant by a ‘flat organization’. To explain the difference between a traditional organization based on hierarchy and a flat organization without one, I usually use an analogy in which traditional hierarchies are like intersections with traffic lights while flat organizations are like roundabouts.

In a crossroad with traffic lights it’s very clear what you need to do: a light indicates if you have to stop, if you need to slow down or you can go. The system runs automatically, prevents accidents, and is quite easy to understand. You know what to do and when to do it. It’s based on the principles of command, control, and compliance. And we all know how people react at a crossroads when someone doesn’t start to go as soon as the light turns green – it’s quite easy to spot the same kind of frustration in organizations as well. It’s an efficient system: much more efficient than not having anything at all or having a policeman in the middle of the street giving directions. However, with heavier traffic it can become very slow, traffic jams can occur, and wait times, as well as driver frustration, can grow quickly.

Roundabouts are designed differently: drivers can make the decision about when to stop and when to go. A roundabout is not an intersection without any rules, but rather it’s carefully designed while still giving drivers freedom. Of course there are certain rules: you have to slow down or stop before entering, you have to pay much more attention to the other cars on the road, you have to indicate if you want to leave the roundabout, and you need to give priority to the circulating flow. Roundabouts feel much more natural: they allow for a more efficient flow of traffic, wait times get shorter, and the cost of maintaining them is far less than for a crossroad. Replacing intersections with roundabouts is a way of getting rid of big traffic jams as well, giving flow and movement to previously clogged roads. And yes, I might have recently read an entire Wikipedia article on the history of roundabouts.

I like this analogy because it shows not only the nature, but also the advantages, of flat organizations. They are not organizations without rules. Rather, they are organizations with a carefully designed, different set of rules based on freedom, autonomy, and responsibility. Thanks to these rules, flat organizations find ways to operate in a system of self-organizing ‘circles’ in such a way that people pay attention to each other and collaborate instead of functioning in hierarchies, where the layer above gives the traffic signals to the layer below.

Just like in a roundabout, in flat organizations people decide what to do only after considering what others are doing. Many processes of flat organizations are designed to ensure that colleagues pay attention to each other. For example, the fact that anyone in a self-managing team can make any decision doesn’t mean that they can just do whatever they want. There are different kinds of advice processes through which the person making the decision needs to consult all parties impacted and the decision maker needs to take the advice of people with more experience or expertise into account when making the decision. This is such an important foundation of their functioning that not following the advice process is one of the reasons you might get fired from a self-managing organization.

Flat organizations are similar to roundabouts in their efficiency as well: they allow for faster and better decision-making, more productivity, less waiting time, fewer wasted hours and there are no people who become bottlenecks for decisions.

Which all sounds very great. But let’s not forget that just as roundabouts require more attention, functioning in a self-managing, flat organization also requires quite a lot of effort, learning, and unlearning. While you might be able to stop for three minutes at a traffic light and check your phone, in a roundabout you need to constantly pay attention to others and what’s happening around you. Self-managing organizations are made up of self-managing people. And self-management is not an easy task. But it’s definitely liberating and worth the effort.

Building a flat organization is not just about removing middle management and letting work flow without any structure. It means carefully designing the rules and principles of collaboration in order to allow the most natural flow of work.

If you are curious about building teams based on self-management, let’s get in touch!