Telling the truth about SME life today

We don’t need no business leaders

In business we talk about leadership all the time. How to keep a team connected, how to build a company culture, how to structure a hierarchy. But here’s a controversial idea: leadership is unnecessary.

If you are a business leader, please bear with me – I’m not suggesting your role should be abolished, although there are CEOs who have done done away with themselves (with their role, not their lives). But businesses that have introduced flat hierarchies to their team have such intriguing success stories to show for that the concept is beginning to raise interest from all sides of the business community.

Don’t make the mistake to think the no hierarchy concept is one for the start-ups to play around with. Even corporate giants are joining the movement: Google, General Electric, and Whole Foods, to name a few. Although they still work with hierarchies, their leadership influence is decreasing steadily. Economist Gary Hamel even calls flat hierarchy firms the “businesses of the future”. That bosses are indispensable, he writes in his book ‘The End of Management?”, think mainly the bosses themselves.

Business leaders tend to create hierarchy pyramids, in which whoever is at the top ends up making decisions that have little to do with what happens at the bottom. Employees, on the other hand, are stuck in the lower levels of the pyramids and soon feel frustrated with their situation. This structure makes it almost impossible for a good idea generated in lower levels of the hierarchy to find its way to the top.

The business of the future

It’s still tough to find a flat hierarchy SME in the UK. The US, on the other hand, is quicker to jump on board: £450m turnover food processing company Morning Star has, it says, been growing significantly since abolishing hierarchies in its structure. W.L. Gore, the manufacturing company well known for its Goretex brand, has been working with no hierarchies for decades and this is a business that employs 8,000 people! W.L. Gore’s engineers and factory workers choose who leads a project themselves it’s the driving force, so the firm, behind its continuous innovation.

But mainland Europe is also beginning to follow the trend. German consultancy firm partake got rid of its hierarchy system several years ago. CEO (well, only on paper) J?rgen Erbeldinger told German weekly ‘Die Zeit’: “The best ideas didn’t come through [in a hierarchy system]. Now, employees become entrepreneurs within the business. The teams take care of motivation and controlling themselves. Partake’s employees choose which projects they work on. They may act as project leader in one, and as part-time junior worker in the next – it’s all self-regulatory.

If you think partake sounds like a fluffy not-so-serious business, you’re wrong. Not only does the consultancy count some of the big fish such as Siemens as it’s clients. The freedom of choice working strategy means employees have to work strictly according to a free market economy principle. If somebody has a good idea, it will only make it to project stage if they manage to convince a team of co-workers of its value. If they don’t, the idea will be dropped. If nobody feels motivated enough to take on a project, then the result would suffer,” said Erbeldinger.

A burn-out syndrome here and there is no rarity at partake, as it is in most flat-hierarchy businesses. Sometimes that is because the system feels ambivalent to employees, who are used to strict leadership and hierarchies. It’s a big trap: employees are supposed to be innovative , ?pro-active , and entrepreneurial” all at the same time, but they still feel as if they’re being supervised. This makes it difficult for them to assess at what point they have accomplished enough.

Even if a firm does everything right in implementing its flat hierarchy system, burn-out may become a regular guest. Since they have the freedom to choose their own projects, team members can become so absorbed in their work that they simply overdo it. Erbeldinger trusts in his team’s self-control: “If one person is doing too much, the others will notice it immediately. Besides, they can always go home and catch a break there’s no boss around who could keep them from it.

Will the no-leadership business soon reach the UK” Share your thoughts with us in the comments.



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