A recent blog posting, The end of bosses, explores the trend of companies with flat organizational structures and little to no middle-management. It states that a key requirement for this style of organization is transparency of information:
The essential ingredients of peer management like trust, accountability, peer feedback, and decision-making autonomy rely on transparency of information. The problem with old school, hierarchical companies is that managers end up operating as obstacles for spreading information freely within a company.
I would argue that transparency of information is a requirement for any type of modern organization. We know that these days everyone can and will gossip on the grapevine using whatever media they can get their hands on. If incorrect rumor is at large incorrect actions will be taken. Better to have correct information out there in the first place.
The basic assertion here is that people use information in order to choose how to act and they will act on whatever information is available, even if it is incomplete or incorrect, even if they know it is incomplete or incorrect. The drive to act and react is sufficiently strong.
Choosing to be paralyzed, waiting on the defensive, is a commonly chosen action in response to incomplete information. It's no coincidence that "old school, hierarchical companies" have a reputation for being slow to act, slow to change and slow to get dynamic action out of teams in the organization. The teams are underinformed and disempowered from gathering and authenticating their own information. Without information they are left with three choices:
- work slowly based on the small dribble of information they get
- flail around chaotically hoping they don't get punished for it later
- choose to do nothing, waiting
Flat organizations work well with information transparency because everyone is considered and empowered to be an authentic source of information. Vertical organizations must work much harder: The role of the manager must become solely that of information distributor and facilitator.