Hierarchy vs. Flat, Which is More Effective & Efficient for Decision Making?

module-home-graphicEffective is doing the right thing, whereas Efficient is doing thing right, therefore “Effectificient” would be doing the right things right.Unless someone has already done so, I’ll claim the new term that describes the combination of Effective & Efficient (“Effectificient”) for myself. 🙂

Hierarchy vs. Flat Organization

Personally, I think this argument is overrated. Having hierarchy doesn’t have to result in ineffective decision making, just like the lack of hierarchy doesn’t guarantee you’re making the right decisions faster. Both can work, as long as you have effectificient conversations in your organization. In my previous post Accountability Requires Engagement; And They Both Require Communication I focused on the importance of effective conversation. In How to Use Your Culture For Improved Decision Making I focused on an effective tool for Decision Making, which comes as a by-product of an effective conversation (communication of Company Culture). Personal experience tells me that when you have an effectificient hierarchy, one that has effectificient conversation flow, you’ll tend to make the best decisions faster. For me it’s not about the chain of command, as much as it is about the quality of the conversation that needs to take place. Flat organizations may look like fun on the outside, but unless there’s a Decision Making matrix & tool (process), it’s a crapshoot as to whether the right things will get done the right way any faster.

How Rigid is Your Organization’s Decision-Making Hierarchy?

This post was inspired after reading the respective post by thoughtLeaders LLC, which stated their poll results of:

  • Most power is consolidated at the top but some occurs at lower levels: 44%
  • Power is distributed evenly according to capability and responsibility: 30%
  • We have true command-and-control — all decisions come from the top: 24%
  • Our hierarchy is very flat and decision-making power is broadly distributed: 3%

The thoughtLeaders LLC post goes on to state; “Consolidating decision-making power at the top cuts both ways. It can reduce risk for your organization by vesting that power with more senior and experienced people. It can also frustrate junior members of the team and slow down your decision-making process because everyone has to wait for a few people to make decisions. To achieve a better balance, evaluate decisions based on their size and risk. Push that decision-making authority as low in the organization as you can without increasing risk too much. You’ll be nimbler with less frustration and not as much risk as you might initially think.”

Conclusion

Practical experience of +30 years across 5 continents in every stage company & industry imaginable tells me that effectificient decision-making is more about quality of the conversation an organization is having than the consolidation of decision-making power. Hierarchy vs Flat is more about Company Culture, and if you’ve done your homework at that fundamental level, quality of conversation will take care of the rest. Take your focus off of the hierarchy & invest it in the quality of conversation, and you’ll get the Workforce Agility you’ve been looking for.

But don’t just take my word for it, in Scaling Up Excellence, Stanford professors Robert Sutton and Huggy Rao also address effective hierarchies.

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