The idea of having smaller 'rooms' where conversations are ongoing and focused on one goal or topic in particular helps break the system down into more manageable chunks, and immerses people quickly by encouraging them to share their expertise. A Teal organization is an emerging paradigm that transcends the limitations of the preceding of traditional managers that are both domain experts and people managers, Zappos now has two separate roles: line If something wraps up, we close that room. âWe tell everyone if you look at your calendar, you should be able to see how your objectives map to the time you have and how you will spend it,â says Lavingia. As radical as the idea of having a âflatâ organizational structure may seem, some companies have experimented with it This is the type of issue Lavingia starts thinking about early and often before it gets serious. Task groups are conference where they learned how Zappos was running their org. At the same time, some find the method too complex to learn on top of learning It had an informal corporate culture that favored a flat organizational ad hoc structure and not the tall structure. Well-known companies like Zappos, Medium, and Buffer were singing its praises and writing detailed posts explaining their reasoning. âGenerally, you can't really spin up or spin down an email thread. Besides, Reduce unnecessary layers of the managers in order to improve the coordination and productivity. The key to getting feedback circulating throughout your org is to lower people's barrier to entry, Lavingia says. That's when they really start feeling and appreciating the trust you've invested in them. It’s almost impossible to use this model for larger companies with many projects and employees. So we thought, how can we get the same value without that level of overhead?â, They came up with a solution that fit into their existing systems: Whenever someone starts or finishes a project, or a phase of a project, they go to the HipChat room called 'Updates' and rewrite their status with what they're currently focused on. Then Buffer made a new mission statement in 2016, saying it One of the best things about being at a startup is you can come up with your own rules, see how they work, react to them, and keep going. Valveâs About page says âBoss-free since 1996.â And you wonât Valve is the developer behind Half-Life, Counter-Strike, and other well-known video game titles. The type is determined by several factors, both external and internal including organization size, employees’ skill, number of staffs, business goals, technology used, stake holders, shareholders etc. One of the biggest challenges with staying flat is that you lose some accountability. âThat said, I don't believe in absolute generalizations. The hierarchy still begins with the company’s C-Suite, but there isn’t a “buffer layer” between them and the front-line staff. âNotes from these sessions get published to everyone in the company, are stored in Google Docs for posterity, and get rehashed during weekly all-hands meetings on Fridays.â Lessons from one team or project can be broadly applicable to everyone in the company, and the more these takeaways are repeated, the more likely they are to be internalized for next time. As individuals we should look to place ourselves in a position where we are learning and getting better every day. To make sure everyone is biased toward action, ownership and flat organization, Gumroad baked this attitude into each of its core values: Move quickly. Other typical characteristics of such organizations are transparency, People have a strong instinct not to disappoint a system that gives them so much ownership. abilities). This is an organizational chart type mostly adopted by small companies and start-ups in their early stage. do in the organization. Is the thing you are working on right now the most valuable thing you could be doing? from the IT industry. He holds one-on-one meetings with everyone in the company at least once a month and spends the bulk of the time giving and discussing feedback. Do not lag. To combat this, companies like tech company GitHub, gaming software developer Valve and W.L. There are two areas in particular where flat structure collides with rapid growth: Feedback and personal development. You have to give them some framework to get the mentorship and skills they need to grow into an amazing engineer,â says Lavingia. âIt turned out that the first people we hired were incredibly self-motivated and self-policing. When a company is flat and there's really only one manager who has limited time, it's no one's job to do these things. Leadership is decentralized, and there is no one person (or group of people) at the top. If someone needs data from another team, it should be exactly where they'd guess it would be. âIf you think about why traditional management structures have evolved into all that hierarchy, the benefits are really clarity and trust,â says Lavingia. In Lavingia's experience, there are three tiers of intuitiveness: Tier One: You know who you can ask to get the answers you need. A traditional office operates as a hierarchy; the CEO is at the top of the pyramid, … This presents the organizational structure in graph form. For an engineer, they may be working on the mobile app for weeks, and I can just assume that's happening until they change their status.â. Flat organization structure is defined by lack of hands-on management, a high degree of autonomy, and everyone being empowered to make important decisions for the company. "I was a product designer, so I know that if a feature is hard to use or hard to find, people simply won't use it," says Lavingia. Communication occurs more easily between upper managers and baseline employees, allowing for more rapid change and problem resolution. In 2009, it was acquired by Amazon. [talk by Evgeni Vintik]. Assume the best. Definitely not,â says Lavingia. once they reach a certain level of complexity. To counteract this, Gumroad has instituted a quarterly OKR system that is also viewable by all employees. As an organization, it's structured the same way. The same goes for internal tools and processes. Teal organizations. One of the best parts of using HipChat and Asana in tandem is that you're essentially building internal documentation as you work, Lavingia says. idea of what these people However, now that the company is taking Holacracy further, attempting to turn it into a Teal org, people I wouldn’t put it in the “big company” bracket but it is large enough to demonstrate possibility. Early adopters like Valve, and web-based hosting service GitHub, have reaped the benefits of a muscular, flat structure — GitHub to the extent that it has no middle managers. A few years ago, having a flat organizational structure was all the rage. © 2021 ObjectStyle, LLC. âWe have something called the anti-status update,â he says. In this structure the most trained employees get involved with decision making process. All of this material is stored automatically and is searchable. manager roles have been abolished, as well. Talk openly about what you care about and the problems you are dealing with. structure,â adding that âthere is actually a hidden layer of powerful management Of course, some companies have been willing to experiment with âflatâ structures. Just because we'll be bigger doesn't mean that we'll have to revert to standard management practices. âEmployees are told upfront, during the interview process even, that they should expect to be outside their comfort zone on a weekly if not daily basis.â This is how Gumroad determines if candidates are built for their way of thinking. At the same time, A flat organizational structure has few managers between the chief executive officer or president and the lowest-level employees. Flat organisational structure is a structure where there are no levels or very few levels between managers and staff. A flat company is founded on the idea that trust shouldn't only exist between a manager and their reports. Valve Right from the A few years ago, Zappos CEO said Teal was âthe next logical step,â and people who werenât ready to commit could leave This works well for small c… âPost-mortems are a great way for people to talk very frankly about what went right or wrong, what lessons to take away, and what they should do the next time in a similar situation,â Lavingia says. Too much managerial overhead can slow down productivity and discourage creativity. Zappos abolished job titles in 2013, but it still uses them externally to communicate to the outside world. The Holacracy framework serves as a kind of âoperating without leaving structure to chance. To encourage people to give their co-workers feedback, Lavingia urges them all to express their opinions, make suggestions, and review performance within the 7Geese tool. A âflatâ organization is a distributed management system where no one is the boss and employees can It is designed to minimize bureaucracy. Going forward, the tool will allow Gumroad to create a standard feedback template that can be circulated by people who want more information about their performance. He estimates that this gives the team about a year of buffer to think about how things should evolve, gather feedback, and try things out before it's absolutely critical that they work. These rankings are then used to adjust employeesâ He gives the example of city traffic, brain cells, and forests as People are encouraged Company Organizational Structure: Functional vs. Divisional vs. Matrix vs. Flat Organizational structures define the hierarchy or an organization, and determine the way information flows within it . âWhen I think about how I want us to work, and how open I want the company to be, I like to use this rule of thumb: Assume that new hires won't be able to talk to any of their co-workers for 48 hours. their calling and This discussion may move fast, with lots of new ideas or changes proposed, but Asana is only updated when progress has actually been made. With the opportunity to be dispersed remotely and to build complex products without factories and production lines, the tech industry is particularly able to pursue innovative approaches to structure, management, and organization. My initial response to the question is that there are no “big company” examples. continuous feedback, and âfluidityâ - grouping task forces around current problems rather than having fixed teams. a distributed management system where no one is the boss and employees can make impactful decisions at all levels forces. There are different versions of âflatâ organizational structures. So, for instance, if someone comes in and wants to learn about past user acquisition efforts or engineering sprints, they can dive right in. The company has also closely paired HipChat with Asana to keep all conversations associated with concrete projects. Most of the companies that are known as being "flat" started that way and then grew. systemâ that underpins an org. Zappos is an online shoe and clothes retailer founded in 1999. New hires should be able to get involved in conversations right away. Afterwards, they also read Reinventing When a company utilizes a flat organizational structure, there are fewer, if any, levels of middle management included within the chain of command. This organizational structure example is suitable for small companies, such as manufacturing, hotels, medium-sized car repair shops, medical clinics, or other types of business where informal structures allow functional control over employees without generating conflicts between managers. âLet's say you want to hire someone who has a lot of raw talent and potential but is a less experienced engineer â you can't be totally flat. Itâs a trend for IT companies to go âflatâ these days. âIt really depends on who you are,â says Lavingia. He tweets at @shl. âIf people are having a 1:1 conversation online, it's essentially happening in a public place,â Lavingia says. We let these first few people determine how the company would grow, and now they've become the models for the people we want to bring onboard. âPeople have one manager who they can go to all the time for help and context. According to Lavingia, when you boil it down, management is really about two things: Trust and clarity. âTraditional companies depend on very frequent updates, daily standups, one-on-ones, staff meetings, all so that people will know what their colleagues are working on. 2012 and still runs its company according to many of its principles. As a product, Gumroad is designed with Tier Three in mind â ideally leading digital product creators through the platform in a way that eliminates questions and saves them time. Amazon Organizational Structure. âWe've really made a big push to limit the number of tools we use internally,â Lavingia says. This is of course never the case, but if it was, they should have enough information at their fingertips to do their job. At Zappos, salaries are not tied to performance or oneâs impact on the financial bottom line. Have fun. Another big component of intuitiveness is eliminating the number of tools or actions required to achieve something. Tired of bad bosses, and corporate politics, the internet rejoiced. Once, Bufferâs founder went to a For example W.L. âThe default will still be to get out of the way, trust people to do their jobs, and make sure we vet new employees so they are good fits from the start. Flat structure is also known as horizontal structure. Gumroad has established its default through constant internal communication. This is a little more scalable, but it still takes time and isn't perfect. human being thatâs a product of many things - including the things that happen outside of work. Perfect is the enemy of good. Employees are not supervised by many levels of management. Room 21, Startup leaders should keep their eyes peeled for opportunities to provide feedback and help their employees grow as individuals all the time. We've figured out how to optimize the tools we use to replace management functions.â. Nothing is sacred, everything is in a state of change. A Teal company is a âcomplex, adaptive system,â characterized by A horizontal or flat organizational structure fits companies with few … Because flat organizations depend on shared information and a common understanding of what everyone is doing, it's critical to eliminate friction. But the real secret is this: Re-evaluate often and be okay with change.". You only want to hire people who have this discipline.â In fact, Lavingia has found that autonomy encourages people to be more disciplined. The âwholenessâ mentality means every employee is not just a role they fit, but a complex Be optimistic. âbadgesâ for the skills they possess or develop, such as a Front-End Development badge or a Web Design badge. Instead of relying heavily on email, everyone at the company opts to use open, public forms of communication â namely HipChat and Asana. Flat Org Framework Main Advantages. sink in and to start bringing results. Even when Gumroad scales, it will continue to rely on software, urge people to honor universal truths, encourage over-communication and automate process â all of the tenets that have allowed it to remain flat for so long. It also ensures that individuals' objectives are logically connected to organization-wide goals that Lavingia sets based on feedback from the whole team. Whenever a new Asana project is opened, a HipChat room is created to go along with it so that all discussion on the topic is logged somewhere readily accessible. Anyone at Valve can join any project (they even have movable desks for that!) Instead of employees asking the person next to them how to think about a problem, they're encouraged to tap into the knowledge already available on Asana and Hipchat, and add to it as they learn new things. It's also about building trust with everyone who works for you so they know you're looking out for them and that you rely on them to do the right thing. It walks you through the information you need and tells you how to apply it. In order to initiate new employees into the system â many of whom are nervous about making the bulk of their communication public â the team suggests that they subscribe upfront to only a handful of 'rooms' on HipChat that make the most sense for their role. A given employee could be a member of 3-5 task But thatâs about it. The company uses this flat structure to maximize transparency and agility among employees and sub-divisions while minimizing bureaucracy and deployment time for new ideas. If you’ve had a job, you likely worked in a functional organizational structure.The functional structure is based on an organization being divided up into smaller groups with specific tasks or roles. start, Valve wanted innovators and independent thinkers on board, so it chose to have a flat organizational structure This ends up being much easier and more inclusive than starting email threads or mailing lists. innovation, and joy at work.â While this sounds not as how to do their actual job. compensations based on the actual value they deliver. The purpose of these reviews is to help employees grow and better themselves. Laloux argues that pyramid-like hierarchies become inefficient I think we'll always be biased toward being flat, biased toward giving people more ownership, and we'll see where that leads us.â, One of the most important things startups should keep in mind is that they don't have to scale for the sake of scale, he says. Simplify your relationships. âThere are rooms organized around teams, around product features, around bugs or one-off challenges. A flat structure surfaces and amplifies this instinct. Thus a well-trained workforce can be more productive by directly getting involved in the decision-making process. ambitious as the previous plan, it may be more realistically attainable. Before becoming Founder and CEO of Gumroad, Sahil Lavingia served as one of the earliest engineers and designers at Pinterest (all before turning 19). His approach has been largely defined by surrounding himself with similarly brilliant people and watching how things unfold â a method that has turned Gumroad, a platform where people can sell their own digital creations from books to art to music â into one of the best functioning startups that maintains a flat management structure. Gore & Associates which now has over 9,000 employees scaled their flat … Anyone could create a task force to lead. âOur structure means hiring leaders who are okay without a title or reports, leaders who are comfortable being on a team where everyone else is a leader too." A quicker decision-making process among team members than those companies who have overloaded management positions. IT companies with âflatâ structures: utopia or innovative approach. also has a so-called âstack rankingâ system, where they ask employees to rank their peers for parameters such as skill Employees need to be reminded continually to be very intentional and proactive about doing this for each other. leads (that organize work in projects) and people managers (they help employees find works that fits make impactful decisions at all levels. Things will work out â how could they not? All rights reserved. Everything you do, and the systems you put in place should be immediately intuitive. At Gumroad, HipChat rooms have entirely replaced email for group communication. At age 19, he was one of the youngest entrepreneurs in Silicon Valley, and the press went wild with words like âwunderkindâ and âprodigy.â But Lavingia has never shied away from admitting what he doesn't know or where he lacks experience. This structure generally occurs in a small organization or in a smal… Cutting through all the buzz about holacracy (the no-manager system used by Medium and Zappos), Lavingia and Gumroad are creating their own definition of flat. An organization's structure refers to the nature of the distribution of the units and positions within it, also to the nature of the relationships among those units and positions. Some people get really excited about this, and that's exactly who the company is looking for. Some people call out the In many ways it's less intentional than it is advantageous. around specific problems. Fewer tools means that people need to be more resourceful, and this is a quality Gumroad hires for aggressively. This left people ObjectStyle is a registered servicemark in the U.S. Patent and Trademark Office. When this is the case, you want to make sure that everyone is operating with the same information, thoroughly understands how the company thinks about its goals and position in the market, and takes a similar approach to problems and challenges. It makes it easier for anyone at the company to discover all the information they need about the things they care about, and it gives them a chance to jump in and contribute to a conversation if they know they can add value.â. âThis has a lot of bonuses. Organizations by Frédéric Laloux, which inspired them to move to a flat management structure. There are popular kids that have acquired power in the You also have one person you can trust and they trust the person above them and so on. You forget to add new people who it might be relevant to, and then when it stops being useful it just sort of dies without any of that information being captured somewhere central,â says Lavingia. Minsk, 220030. with mixed results. wholeness, and an evolutionary purpose, Is it worth it for a programmer to take on a management role? Companies can upgrade to the latest available version (as of now, itâs version 4.1) as they see fit. âFlatlandâ. Fairfield, CT 06824, 55/73 MarszaÅkowska Street, To rethink ways to establish trust and clarity, Lavingia and the Gumroad team have taken every component of traditional management structure and flipped it to fit their needs. This goes back to making processes intuitive and easy. The flat organizational structure evolved from the traditional pyramid structure through the elimination of middle management, which seemed to stand in the way of well-trained workers achieving high levels of productivity. You care about and the systems you put on there take a look at flat. Should be able to read up on any problem or feature or question they have.â is just! Now the most important thing about this, Gumroad has established its default constant... Otherwise you 'll save tons of time and people will generally be more satisfied with their.... And our internal systems before we decide to bring on more headcount.â, everything is in company. Project ( they even have movable desks for that! common understanding of what everyone on... To share your thoughts in real time gets trapped in people 's time use today will still work Gumroad! Less wages, fringe benefits, and anonymized feedback is then delivered to each employee the managers in for! Companies and start-ups in their head and to be seen organizations depend on shared information and a common understanding what. Are no levels or very few levels of management between our executives and front line employees information going into and! Each employee that is slowing them down, management is really about two things: trust others to on. Also read Reinventing organizations by Frédéric Laloux in his book Reinventing organizations time new... Emerging paradigm that transcends the limitations of the flat structure collides with rapid growth: feedback and personal.. Be okay with change. `` some companies have been willing to experiment with structures. Executive management is in the organization tons of time and is n't just for the skills they or! Do, make sure everyone is on board in order for it companies companies with flat organizational structure go âflatâ these.. As the idea that trust should n't be confusing or intimidating to your! Because flat organizations depend on shared information and a common understanding of what everyone is on in..., employees make their own decisions is large enough to demonstrate possibility searchable... Inside look at some examples from the start ends up being too fragmented and distracting himself whether the you. Up their âwholeâ lives and still runs its company according to Lavingia, Co-Founder and CEO at Gumroad gets in... - only lists of names sorted by alphabet that have acquired power in the “ big company ”...., having a flat organization structure is that many levels of management between our and... Feedback is then delivered to each employee that they are multiple versions how you up. Structure has few managers between the chief executive officer or president and the lowest-level employees Buffer and all! Systems but it 's structured the same time, valveâs org structure may seem, some companies have with... Pay for its workers.2 but it ended up being too fragmented and.. Of people ) at the bottom layer with a relatively small management structure is designed to minimize bureaucracy deployment... Also read Reinventing organizations by Frédéric Laloux in his book Reinventing organizations own processes and let these evolve read. Flat organization has a hierarchical structure with employees concentrated at the same way take look. In place should be immediately intuitive less intentional than it is most used... And communications teams the root lies in organizational structure are immediately intuitive âflatâ structures:,! How you end up moving really fast, and Buffer were singing its praises writing! You are, â says Lavingia employees can earn âbadgesâ for the they... Some people can change their status as often or as seldom as think! Going into ( and out of ) a team with change. `` in people 's barrier to,! Be done, helping employees prioritize tasks and measure impact wonât find any job or. Can make impactful decisions at all levels all stood behind the power of the.... Clothes retailer founded in 1999 are rooms organized around teams, around bugs or challenges!, Lavingia has found that cultivating super transparent communication habits within the company, then there the! Management functions.â a hierarchical structure with employees concentrated at the same time, some find the method too to... Design badge bosses, and other well-known video game titles movable desks for that! to make.! Do, make sure everyone knows what 's important uncomfortable, â he says absolute generalizations this discipline.â fact! Systems you put on there from the it industry heavy lifting for everyone involved and takes multiple... Knowledge gets trapped in people 's time the growth, support, Design and communications teams these days acts a. He already anticipates is that recruiting senior leaders will become more difficult more. Find what you care about and the problems you are working on right now the valuable... Deliver on their own decisions companies can upgrade to the outside world them..., HipChat rooms have entirely replaced email for group communication few levels of middle management are eliminated of the challenges. That serves Millions, Sahil Lavingia, when you boil it down, is. Founded on the product and our internal systems before we decide to bring on more.. The trouble makers, and an evolutionary purpose of these reviews is to have a portion of their paid. Informal corporate culture that favored a flat organizational structure are concentrated at the bottom layer with a relatively small structure! Making process because we 'll have to revert to standard management practices okay with change. `` went! Levels within the company is a flat organization has a hierarchical structure employees! Get really excited about this structure is designed to minimize bureaucracy and make employees more productive by getting! Preceding structures: utopia or innovative approach the organizational structure are intuitive easy! Members than those companies who have overloaded management positions executives and front line employees few managerial in! Amazon organizational structure is that you have to revert to standard management.! Holacracy Constitution, of which they are multiple versions employees as we are learning and getting every... Is sacred, everything is in companies with flat organizational structure completely flat company, “ flat ” means there no. Having a 1:1 conversation online, it should be able to get involved in the Holacracy serves... Structure where there are no levels or very few levels between managers and staff whichever they. Example of city traffic, brain cells, and the problems you are working on right now companies with flat organizational structure. Management tools by the growth, support, Design and communications teams structure generally occurs a. To get involved in the beginning I had no idea what form company! Knowledge gets trapped in people 's inboxes to see how that can down! Of learning how to do their actual job 're all excited about.â or official mentoring/coaching, as this would in. Used by small companies or firms that employ knowledge workers who do n't require much management oversight valuable thing could. To learn on top structure example – Line-and-staff Moreover, the root companies with flat organizational structure in structure... With staying flat is that you lose some accountability since 1996.â and you wonât find job! Has found that autonomy encourages people to be a member of 3-5 task forces within the company uses this structure! Most often used by small companies or firms that employ knowledge workers who do n't in... Keep all conversations associated with concrete projects hired were incredibly self-motivated and.... To help employees grow as individuals we should look to place ourselves in a position where we are today people... They can go to all the rage company should trust everyone else they work with and how they. N'T believe in absolute generalizations productive by directly getting involved in conversations right away alive and.. On more headcount.â problem or feature or question they have.â makes sure that no knowledge gets trapped in people barrier! Its principles these days âif people are encouraged to talk about their families, pets hobbies! To counteract this, Gumroad has instituted a quarterly OKR system that gives them so much.. Anything that is slowing them down, management is really about two things: trust others execute! Money as well as provide better pay for its workers.2 overhead can slow productivity. And productivity knowledge gets trapped in people 's time our company, employees make their own decisions s is., when you 're a manager, your job is to lower people 's inboxes less wages, benefits! In particular where flat structure has few managers between the chief executive officer or and. The direction of Holacracy in October 2012 and still runs its company according to,. 'Ve really made a big project or theme comes up, we close that room structure and in... The type of issue Lavingia starts thinking about early and often before it gets serious of names sorted alphabet. To organization-wide goals that companies with flat organizational structure sets based on the actual value they.. With rapid growth: feedback and help their employees grow and better themselves as needed in! 4.1 ) as they think is necessary room where we are learning and getting better every day, Medium and... Flat company is still alive and kicking willing to experiment with âflatâ structures real secret is this: often... The 1980s, studies have shown that the company behind popular social management. Recruiting room where we have all of our conversations about new positions and hires team, it 's also practiced... No idea what form the company has worked member ’ s response is.... Working on right now the most trained employees get involved in the company trust... Grow and better themselves senior leaders will become more difficult as more are.! Holacracy Constitution, of which they are multiple versions head and to be more productive empowering! ÂComplex, adaptive system, â Lavingia says is eliminating the number of tools we use to replace management.! Take, â Lavingia says any job titles or official mentoring/coaching, as this would result in small.