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How to Grow Structure

This chapter is from the book

Move Stuff up to Separate Layers

Management hierarchies are like taxi drivers. They are both necessary and evil. Necessary because there needs to be some traceable line of authority between employees and the owners of an organization. And evil because hierarchies are too easily abused, in which case they have terrible effects on information flow. This follows (theoretically) from Emery's first design principle and (practically) from empirical evidence. An example of the latter is found in Malcolm Gladwell's book Outliers, in which he described that there is a strong correlation between plane crashes and hierarchical cultures (because of bad communication in cockpits) [Gladwell 2008]. But that doesn't mean that there should be no hierarchies. If hierarchies were all bad, we wouldn't find them all around us in nature, as indicated by the Hierarchy Principle:

  • Complex natural phenomena are organized in hierarchies wherein each level is made up of several integrated systems.8

The question is then how to use the benefits of a hierarchy without allowing it to work against us. To me the chain of authority seems to be a valid reason for the existence of a management hierarchy. The owners of an organization hire someone to run their business, and this person hires some other people to delegate part of that work to, and so on. This is a hierarchy. There's no denying it. It is a tree-like structure to facilitate the flow and division of authority.

  • The purpose of organization is to reduce the amount of communication and coordination necessary; hence organization is a radical attack on the communication problems.... A tree organization really arises as a structure of authority and responsibility. The principle that no man can serve two masters dictates that the authority structure be tree-like. But the communication structure is not so restricted, and the tree is a barely possible approximation to the communication structure, which is a network.9

What we need is a happy marriage of the formal hierarchical structure with the informal network structure [Augustine 2005:48]. Management must acknowledge that information flows through the network and not through the hierarchy. This is not something to be blocked or controlled. Instead it must be nurtured. The hierarchy is needed for authorization; the network is needed for communication (see Figure 13.9).

Figure 13.9

Figure 13.9 Both network (for communication) and hierarchy (for authorization).

Organizational psychologist Elliott Jaques, creator of Requisite Organization Theory, discusses in his works that hierarchies do have a function; although, they are usually badly designed [Jaques 1998]. One important requirement for each management layer is that it must add value to the organizational structure. Just like natural hierarchical layers have new emergent properties at each higher level that did not exist at the lower layers, so must each managerial layer in an organization take care of stuff that the lower levels don't normally concern themselves with.

For example, Jaques describes that each higher level could deal with a different organizational time span [Jaques 1990]. The lowest level deals with all issues that take between 1 day and 3 months to solve; the second level has a time horizon of 3 to 12 months; the third level has work spanning 1 to 3 years, and so on. A project team (usually) has no time to wonder what needs to be done for a business to be successful in 5 years' time. And there are other examples, too, such as hiring people, forging strategic alliances, and balancing budgets, all of which are things that project teams are unlikely to address by themselves. However, it must be noted that management experts don't agree on this matter. Some have noted that even CEOs tend to busy themselves with day-to-day concerns [Mintzberg 2005:110].

I think the real lesson here is that there needs to be some separation of concerns between management layers, regardless of whether this separation is by nature temporal, spatial, or anything else. Jaques has shown that organizational problems are often the result of different management layers not clearly adding value. The requirement of adding value is a great starting point when making decisions on management layers. Whenever someone suggests adding a new management layer, ask yourself the question, "What is this layer going to solve that the lower or higher layers cannot do themselves?" If you cannot clearly answer this question, then don't add the managers!

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