In the previous post in this series, I offered some background on the organization chart. How they came into being, and why their use has become so widespread.

But for all their apparent utility, these diagrams remain deeply unpopular.

According to David Packard (the late CEO and co-founder of the Hewlett-Packard Corporation), “after you get organized, you ought to throw your organization chart away.”[1] Robert Townsend, the former president and chairman of Avis Rent-a-Car once cautioned “never formalize, print, and circulate (your organizational chart).”[2] And according to biographer Walter Isaacson, Steve Jobs once exclaimed: “These charts are bullshit.”[3]

So why does the organization chart seem to rub so many people the wrong way?

 

Same as it ever was

To be sure, organization charts have been the subject of criticism virtually since their invention.

For example, in 1922 Henry Ford lamented that it “takes about six weeks for the message of a man living in a box on a lower left-hand corner of the chart [to reach top management].”[4] His complaint is a familiar one; the often painful sluggishness with which most corporations make decisions is frequently attributed to the process of passing information up and down the various “chains of command” that the org chart describes. As a result, the diagram has become a de facto symbol of the stifling bureaucracy and needless red tape that seems to plague so many companies.[5]

There are also those who blame org charts for inhibiting organizational improvisation and flexibility,[6] qualities thought to be increasingly important in today’s ever-changing marketplace. The rigid lines used to connect the various boxes on these diagrams all but project an unwillingness to collaborate, cooperate, or otherwise accommodate new ideas. Others would argue that most org charts are out-of-date almost as soon as they’re drawn up, such is the “speed of business.”[7]

And then there are some who would simply contend that organization charts don’t represent the “true” structure of a business, and thus are essentially irrelevant. As Warren Bennis (Distinguished Professor of Business Administration at the University of Southern California) observes, the org chart “masks as much reality as it is alleged to portray.”[8] This is perhaps particularly true when it comes to where real power and authority resides in an organization. For instance, the familiar anecdote that the boss’s secretary has just as much (if not more) power than the boss herself may cause you to smile not because it’s ridiculous to think so, but because it’s so often true.

 

The thing is not the thing

Of course, these criticisms aren’t really being leveled at the organization chart itself. Rather, it’s what they represent—namely, hierarchy—that so many people seem to object to. And organization by hierarchy is, of course, a much, much older concept.

An early reference to this organizational paradigm can be found in the Old Testament (~1491 B.C.). In the Book of Exodus (Chapter 18), Jethro advises Moses to organize his duties as a tribal elder along hierarchical lines, proclaiming:

21 Moreover thou shalt provide out of all the people able men, such as fear God, men of truth, hating covetousness; and place such over them, to be rulers of thousands, and rulers of hundreds, rulers of fifties, and rulers of tens.

22 And let them judge the people at all seasons and it shall be, that every great matter they shall bring unto thee, but every small matter they shall judge: so shall it be easier for thyself, and they shall bear the burden with thee.

The legendary warrior/general Sun Tzu also endorses organization by hierarchy in his treatise The Art of War, penned around 500 B.C. In it, he advises that an army be organized “in its proper subdivisions, (with) the gradations of rank among the officers.”[9] And around 400 B.C., the philosopher Socrates alludes to the concept of “management” as universal endeavor unto itself, as opposed to a set of skills specific to any particular enterprise. “The conduct of private affairs,” he writes, “differs from that of public concerns only in magnitude; in other respects they are similar.”[10]

These days, however, management by hierarchy is the subject of as much criticism—if not more—than the organization chart.[11] For example, given its underlying “command and control”-type mentality, hierarchy is a notion that many find offensive given modern society’s increasingly egalitarian and democratic views.[12] As Jack Welch (the former CEO of GE considered by some to be the greatest manager of the modern age[13]) once wrote, hierarchies “tend to make little generals out of perfectly normal people who find themselves [responding only to rank].”[14]

Harold Leavitt (Professor Emeritus of Organizational Behavior at Stanford University’s Graduate School of Business) is even more critical. He argues that hierarchies “breed infantilizing dependency that generates distrust, conflict, toadying, territoriality, backstabbing, distorted communication, and most of the other ailments that plague every large organization.”[15] He furthermore contends that they’re “inefficient,”[16] “slow, unresponsive, and inflexible,”[17] and that the reason we might not like hierarchies is because “they don’t like us.”[18]

 

The matrix has you

Given such widespread disdain, it perhaps not surprising to learn that over the years efforts have been made replace/modify/alter the org chart and/or the hierarchical form.

However, few to this day endure.

One of the more ambitious attempts was undertaken in the 1970’s, and resulted in what is known as a matrix organizational chart. According to this management paradigm, the hierarchical notion of “unity of command”—idea that each and every employee be assigned one, and only one supervisor—is relaxed. Employees, in other words, can be assigned multiple managers in a “matrix” organization. This modification was thought to more accurately capture the complex nature of organizational function in which authority is ambiguous, and divisions of responsibility are not always clear. It was also hoped that it might encourage cooperation and collaboration throughout the broader organization.[19]

In practice, however, the matrix-style organizational chart seems to lead to as many problems as it is intended to solve. For example, the overlapping bosses are thought to encourage turf wars instead of facilitating discussion and consensus. “Matrixed” organizations have also been blamed for fostering a general lack of accountability, as well as adding another layer of bureaucracy to organizational processes. In their studies of this organizational archetype, Raymond Hill and Bernard White concluded that matrix organizations are “exceedingly complex, ambiguous, and often frustrating environments in which to work and manage.”[20]

Another alternative to the pyramid-shaped organization chart worth mentioning is the “wagon wheel” or pizza-shaped org chart. Here, the CEO or business owner is located in the center of the diagram, with lines of authority emanating out from a central hub like spokes on a wheel.[21] Symbolically at least, this suggests that the CEO is not so much “the boss,” but a sort of grand facilitator, or hub of information. The more recent “holacracy” movement might be included as a variation on this theme. Here, authority does not reside so much with people, as with a “process.” And workgroups are referred to as “circles,” with “links” instead of managers.[22]

But again, these efforts have also proved to be short-lived, problematic, or simply have thus far failed to catch on.[23]

 

Flatter is better?

Perhaps the most enduring “re-imagining” of hierarchy is the so-called flat organization.[24]

As the name implies, this approach requires that all but the most crucial “layers” be removed from an organization’s hierarchy, thus rendering the chart as “flat” as possible. There are few (if any) middle managers, and even titles are discouraged.[25] Proponents of this organizational form maintain that it encourages decision-making at the lowest possible level – i.e. by those individuals closest to the problem or issue, and perhaps best suited to address it. Flat organizations are furthermore believed to encourage greater employee engagement at all levels, as well as a sense of “ownership,” thereby increasing overall productivity and efficiency.[26]

Nonetheless, precisely how “flat” an organization can be made remains an open question. Obviously, reducing the number of “layers” in any given hierarchy necessitates that those who do have management responsibilities be assigned more direct reports. Take that too far, however, and you either overwork your managers, or compromise their ability to be effective.[27] It is also worth mentioning that this organizational form is not really an alternative to hierarchy to begin with.[28]

Hierarchy is hierarchy, after all – no matter how “flat” you make it.

 

A necessary evil?

And then there are those who have simply come to embrace the concept. (Besides the prophet Jethro, Sun Tzu, and Socrates, that is).

Either having experimented with other organizational structures and found them wanting, or never having abandoned hierarchy in the first place, its proponents do not so much necessarily sing this management paradigm’s praises, however. Instead, they simply seem willing to accept its inevitability.

Organizational psychologist Elliott Jacques writes, for instance, that “managerial hierarchy is the most efficient, the hardiest, and in fact the most natural structure ever devised for large organizations. Properly structured, hierarchy can release energy and creativity, rationalize productivity and actually improve morale.”[29] But his is a guarded enthusiasm: “(we) might almost say that successful businesses have had to succeed despite hierarchical organization rather than because of it.” And this, of course, is faint praise at best.

Surprisingly, Professor Leavitt also appears to be an advocate. In Top Down: Why Hierarchies Are Here to Stay, he offers a number of reasons for hanging on to this notion of hierarchy. Organizing this way may fulfill certain basic human psychological needs, he offers, like “providing ladders for us to climb,” granting us a certain “illusion of security,” and may “add structure to our lives.”[30] Leavitt furthermore speculates that hierarchies could be “hardwired into the human brain” and therefore organizing according to bureaucratic principles may even be “inevitable.”[31] In his view then, management by hierarchy may not be so much a choice that we make, but something we must just learn to accept.

 

The elephant in the room…but not on the chart

So what are we to think?

Is the organization chart the single most helpful and efficient (if not necessarily most popular) management tool ever invented? Or is it an outdated symbol of all that is wrong with the modern corporate workplace?

The answer, it turns out, is neither.

The fault isn’t with anything the modern, pyramid-shaped, hierarchical organization chart depicts. It’s not what’s on the org chart, in other words, that is the problem.

It’s flaw lies in what (or who) is perhaps conspicuously absent.

 

 

Next in the series: Who’s your boss?

 

Endnotes

[1] “Lessons of Leadership: David Packard,” Nation’s Business, January 1974, p. 42.

[2] Townsend, Robert. Up the Organization. 1970. New York: Alfred A Knopf Publishers, p. 134.

[3] Isaacson, Walter. Steve Jobs. 2011. New York: Simon and Schuster, p. 223.

[4] “Origins of the Organization Chart” by Alfred Chandler, Harvard Business Review, March-April, 1988, p. 156-157.

[5] Bozeman, Barry. Bureaucracy and Red Tape. 1999. Prentice-Hall.

[6] “Org Charts: Finding what works for you” by Barry Moltz, American Express OPEN Forum, Feb 19, 2015. (Retrieved May 11, 2017.) https://www.americanexpress.com/us/small-business/openforum/articles/make-organization-chart-stronger/.

[7] “What is an organization chart?” (Subsection: Limitations of Org Charts) from Lucid Chart at https://www.lucidchart.com/pages/organizational-charts. Retrieved May 11, 2017.

[8] Bennis, Warren. Leaders: Strategies for Taking Charge (2nd Ed). 1997. New York: HarperCollins Publishers, p. 47.

[9] Tzu, Sun. The Art of War. 2002. Mineola, NY: Dover Publications Inc., Mineola. p. 40. (Estimated to have been written around 500 B.C.)

[10] Shafritz, Jay M. and J. Steven Ott. Classics of Organizational Theory (Fifth Edition). 2001. Philadelphia, PA: Harcourt College Publishers, p. 36.

[11] “Hierarchy is overrated” by Tim Kastelle, Harvard Business Review, Nov. 20, 2013. https://hbr.org/2013/11/hierarchy-is-overrated. Retrieved May 11, 2017.

[12] Leavitt, Harold J. Top Down: Why Hierarchies Are Here to Stay and How to Manage Them More Effectively. 2005. Boston, MA: Harvard Business School Press, p. 24

[13] “The Ultimate Manager” by Geoffrey Colvin. Fortune Magazine (archived), November 22, 1999. http://archive.fortune.com/magazines/fortune/fortune_archive/1999/11/22/269126/index.htm. Retrieved May 11, 2017.

[14] Welch, Jack. Winning. 2005. New York: HarperCollins, p. 116.

[15] Leavitt, op. cit., p. 1.

[16] Ibid., p. 22.

[17] Ibid., p. 24.

[18] Ibid., p. 25.

[19] Hill, Raymond E. and Bernard J. White Matrix Organization and Project Management Michigan Business Papers #64, 1979, (Division Of Research, Graduate School Of Business Administration, University Of Michigan, Ann Arbor, MI).

[20] Ibid., p. 4.

[21] Johnson, William C., Richard Chvala, and Frank Voehl. Total Quality Marketing. 1996. Boca Raton, FL: St. Lucie Press, p. 108.

[22] Robertson, Brian J. Holacracy: The new management system for a rapidly changing world. 2015. New York: Henry Holt and Company, LLC.

[23] “How a Radical Shift Left Zappos Reeling” by Jennifer Reingold, Fortune (online), March 4, 2016. http://fortune.com/zappos-tony-hsieh-holacracy/. Retrieved May 11, 2017.

[24] Lemons, Jane Fullerton. “Flat Management.” Issue: Flat Management. 2017. SAGE Publishing.

[25] “The Five Types of Organizational Structures: Part 3, ‘Flat’ Organizations” by Jacob Morgan, Forbes (online), July 13, 2015. https://www.forbes.com/sites/jacobmorgan/2015/07/13/the-5-types-of-organizational-structures-part-3-flat-organizations/#1e3e83c96caa. Retrieved May 11, 2017.

[26] “What Kind of Leadership is Needed in Flat Hierarchies” by Viviam Giang, Fast Company (online), May 19, 2015. https://www.fastcompany.com/3046371/what-kind-of-leadership-is-needed-in-flat-hierarchies. Retrieved May 11, 2017.

[27] This is a fundamental management paradox that I’ve discussed repeatedly in previous posts, including: “Flatten that span??” [Video post] and “It’s not what you do. It’s when you do it.

[28] “The Five Types of Organizational Structures: Part 2, ‘Flatter’ Organizations” by Jacob Morgan, Forbes (online), July 8, 2015. https://www.forbes.com/sites/jacobmorgan/2015/07/08/the-5-types-of-organizational-structures-part-2-flatter-organizations/#63b798686dac. Retrieved May 11, 2017.

[29] “In Praise of Hierarchy” by Elliot Jacques. Harvard Business Review (January-February 1990).

[30] Leavitt, op. cit., p. 32-36.

[31] Ibid., p. 44&13, respectively.