Twenty-first century organizations are flattening, but the change can’t happen quickly enough. Although the corporate hierarchy was invented to promote efficiency, it doesn’t work particularly well in a business world that moves at the speed of technology. If you’re holding on to the old, bureaucratic ways of doing things, you're hurting your business. Don't believe me?
1. Hierarchies Move Too Slowly
Organizations need to be able to adapt quickly to changing market conditions, but a complex hierarchy is like a lumbering giant. As Harvard professor John Kotter told Debbie Robins in The Huffington Post: “Put simply, a hierarchy can’t handle speed well. Rules and procedures that inevitably accompany hierarchies almost never change fast even if they are now irrelevant, overly burdensome, and the like. Hierarchies can’t jump to the left or the right easily, and over time it’s easy to keep adding levels and rules, to keep making silo walls thicker.”
2. Hierarchies Are a Game of Telephone
In order for communication to go from the top of the hierarchy to the bottom, it has to pass through numerous managers. Remember the childhood game, telephone? The message you ended up with was usually a far cry from the first one started. That’s a hierarchy for you. In a flatter organization, it’s much easier to promote a culture of transparency.
For more where this came from, have a look at the full post at the AMEX Open Forum.