Interviews

Why and how businesses should deliver a flat structure for business growth

5 min read

24 August 2014

I’m often surprised by the dazzling array of job titles bandied around the corporate arena. Senior executives, middle management and junior roles all feature a plethora of job title derivations, so much so that you’d almost need a dictionary to decode them.

Hierarchies constrain ideas

Creating a detailed web of hierarchies leads to divisions and limits the free flow of information throughout a business. Staff are effectively pigeonholed by job titles, hamstrung by their accompanying, increasingly-detailed job descriptions. I find this risks strangling creativity and innovation, which is the lifeblood of any successful business.

Just because you are a director, doesn’t mean you have a complete monopoly on the best ideas to take the business to the next level. All entrepreneurs need to understand that good ideas can come from anywhere.

And there’s a danger that focusing on hierarchy can create a more insular business culture, thereby helping to foster a difficult atmosphere of internal office politics. This helps neither the business nor its employees.

Create an environment to generate and share ideas

The most important thing an organisation serious about strong growth and happy staff needs to do is create an environment that encourages the sharing of ideas, something a rigid hierarchy can stifle.

At Astus, we have an open plan culture for this very reason. We have new junior recruits sitting next to directors to make them feel comfortable to share ideas. Also, we make it clear to all staff that we listen to anyone who feels their ideas can improve the business and that there’s never a ‘stupid’ idea.

If staff feel encouraged to innovate and be creative in their thinking, and to have a real voice that’s listened to by the senior team, they will know they are making a difference and feel valued. This in turn encourages greater loyalty to the business and naturally reduces staff turnover, which helps organisations to cut the cost of recruitment (often a long and expensive process).

As a result of our approach we experienced less than five per cent staff turnover last year, while the UK average is 15 per cent a year.

Give staff responsibility and ownership

Creating a flat structure provides the opportunity to give employees as much responsibility as they want or are comfortable with.

The vast majority of people who want to do well in their career are looking for a challenge. This means businesses should give them freedom and as much autonomy as they are capable of handling, whilst providing them with support when they need it.

Also, giving staff the responsibility they want in order to develop can negate the need for employing superfluous middle management positions, reducing business expenditure.

Entrepreneurial businesses should seriously consider going one step further, as we do, and offer staff part ownership of the business. In doing so, we give our staff a real, tangible involvement and a direct influence in both setting and delivering budgets. This means staff truly have a voice, helps maintain their loyalty, and encourages them to remain innovative. What better way to motivate employees?

A win-win situation

Of course businesses with a flat structure will always need a core group of directors or a CEO to agree a strategy and make final decisions. A business can’t be run like a complete democracy as there’s a danger no decisions will be made.

However, organisations need to remember that it is their staff who make the business a success, and having a flat structure is all about allowing staff to have a genuine voice and giving them responsibility to grow and develop.

Implementing a flat structure is a win-win for all parties: for staff who are happy, enthused and motivated to do well, and for businesses who have highly-motivated, loyal staff looking to drive the business forward. And remember, outside of delivering business growth, such a structure has many other benefits like cutting down on staffing and recruitment costs.

Frances Dickens is CEO and co-founder of Astus Group.