Endless meetings where the best-case outcome scenario is agreeing to disagree. Vague role definitions that leave everyone uncertain about their and others’ responsibilities. Time-sensitive work trapped in a relentless loop with no resolution pathway. Redundant processes that resemble an Escher staircase, focused more on endless repetition than progress. Sound familiar? If so, your company might be experiencing a new type of corporate dysfunctionality – horizontocracy.
The shift from vertical to horizontal corporate structures promised to usher in a new work age defined by agility and freedom from bureaucracy. However, in some cases, the suffocating weight of vertically structured bureaucracy has simply been replaced by a horizontal form of it —horizontocracy—that leads to new kinds of corporate gridlock. This version of bureaucracy, while subtle and marked by the absence of rules rather than their presence, can be even more damaging to companies than its vertical counterpart.
This article explores the telltale signs of horizontocracy and offers practical strategies to unlock the potential of flatter structures while minimizing the risk of value-destroying corporate inaction.
The Flattening of Companies
One notable shift in corporate structures over recent years has been the gradual flattening of corporate structures. Flatter corporate structures are defined by a number of features, including decentralized decision-making, increased cross-departmental collaboration, the blurring of reporting lines and more flexible work roles. This shift has been discussed in the BWD here. Broad-based decision-making processes are a defining element of the Japanese concept of nemawashi, which is dicussed here.
The flattening of corporate structures creates value creation and risk management opportunities.
The flattening of companies creates many value creation and risk management opportunities vital in an increasingly connected, data-driven, and fast-moving world. These opportunities include
- allowing companies to react faster to external and internal shifts
- delegating decision-making power to organizational levels that are closer to the client, permitting customer-centric engagement and shorter client service loops
- encouraging firm cross-collaboration to permit innovative solutions that reflect multiple perspectives; and
- permitting more agile resource reallocation.
The Emergence of Horizontocracy
While flat organizations have great potential, they can also open the door to work dynamics that not only cause open firm architecture benefits to be lost but create a new form of bureaucracy that could be called a “horizontocracy.”
Rather than the typical type of bureaucracy, built on vertical procedures and requirements where approval is needed up a multi-layered chain of command, a horizontocracy refers to a situation where flat organization dynamics lead to value-destroying corporate gridlock. This can manifest through complex coordination among peers, cross-functional teams, or decentralized groups, with decision-making bogged down in negotiation, consensus-building, or duplicated effort.
A horizontalocracy refers to a situation where flat organizational dynamics lead to value-destroying corporate gridlock.
Some specific issues that arise in horizontal bureaucracies include:
Coordination complexities. In horizontal companies, aligning objectives and actions across multiple teams can create layers of informal coordination mechanisms. When everyone’s opinion is sought on every dimension of a problem, the process of getting everyone on the same page can slow things down.
Ambiguity of roles and authority. Flatter organizational structures often blur role definitions. While this can allow firms to use employee talents that go beyond narrow role definitions and dynamically match those talents with firm opportunities and challenges, flatter structures can create situations where roles are not well understood, responsibility is diffused, and accountability is unclear.
Decision-making gridlock. Opening up corporate decision-making vertically (seeking input from people at all company levels) and horizontally (getting input from multiple departments on an issue) can positively bring new perspectives to bear on problems. However, when numerous people are empowered to make decisions and initiatives can only go forward with wide approval, it creates the risk of gridlock.
It also creates the risk of a situation where, to obtain the required levels of buy-in, an inordinate amount of time can be spent focusing on trivial issues that everyone can agree to rather than the tough, potentially divisive issues that a company needs to deal with to move forward.
Excessive emphasis on consensus-building can lead to situations where easy issues that people can agree on are prioritized over the tougher issues that really require company focus.
Redundant processes. In flatter organizations, internal teams often have the flexibility to innovate rather than needing to follow a centrally-defined playbook. However, without centralized oversight, different teams may create their own problem-solving procedures, leading to inconsistencies, inefficiencies, and sometimes duplicated efforts.
Over-communication and meeting overload. Open organizational structures often encourage regular cross-departmental discussions, which can promote new perspectives, build solution buy-in, and strengthen the firm’s mission. However, if communication becomes the end of corporate activity rather than the means, it can lead to excessive meetings and communication loops that delay actions and decision-mapping.
Follow-up voids. A great strength of flat organizations is that they can quickly create ad hoc teams that can address opportunities and issues. While this fluidity is a great strength, it can lead to situations where once the team reaches a consensus regarding how a problem should be solved it is disassembled and then reformulated to solve a new problem. This can lead to a lack of follow-up where the solution is never fully implemented.
Steps to Prevent Horizontocracy
Here are some steps companies can take to reduce horizontocracy.
Appoint an HPM and create a Decision-Making Map. The first step toward reducing horizontocracy is appointing a horizontal process manager or process quarterback (HPM) with the breadth of organizational perspective and the ability to balance the benefits of open-source decision-making with larger firm objectives, available resources, and available decision-making time. With these parameters in mind, the HPM can create a Decision-Making Map to ensure that the process continually moves forward to the Best Solution Possible, meaning the best outcome that can be generated given the issue, perspectives raised, available resources, and available time.
A decision-making goal in horizontal organizations should be the Best Solution Possible rather than the best solution.
Set clear decision-making parameters and scope. To facilitate decision-making, the problem should be broken down into issues, and these issues should be further separated into points that require everyone’s input and matters that can be decided by the HPM or another person on the problem-solving team.
Define key roles and responsibilities. The roles of different groups and people in the solution process should be clearly defined. One option to assist with role definition is to use a RACI framework. This framework divides people into those who are responsible, accountable, consulted, and to be informed.
- Responsible. The individuals or teams who are assigned to do the work to complete the task.
- Accountable. The person is ultimately answerable for the completion of the task, often with the authority to make final decisions.
- Consulted. Those whose opinions are sought, such as subject matter experts within the firm, and whose input can influence the task.
- Informed. Those who are kept updated on progress, often stakeholders or managers who need to be aware but are not directly involved in solution formulation or execution.
Establish decision-making checkpoints. The Decision-Making Map should set forth clear checkpoints to make sure that the process continues to move forward in accordance with the agreed timeline. These checkpoints could include:
- Initial brainstorming and consensus building. This phase involves an open-ended discussion of the idea and encouraging different perspectives. Team members should be polled to see where there is consensus and what areas require further analysis.
- Problem and possible solution research. Many issues require further research before a decision can be reached. The research phase can set forth these issues, define who is responsible for carrying out the research, and delineate research objectives.
- Solution formulation. At this stage, research is used to enrich the discussion, build the scope of consensus, and develop solutions.
Create a decision-making dashboard. To track decision-making progress, it is useful to create a dashboard or similar type of interface that makes it easy for people to track the progress of other people on the team and compare how progress aligns with the Decision-Making Map and the decision-making checkpoints. This helps reevaluate the process and make improvements when progress starts to deviate from pre-agreed timetables.
Define decision-closure protocols. In order to mark a clear decision endpoint, decision-closure protocols should be created that indicate to the team and all other people affected by the decision when the Best Solution Possible has been reached. Apart from explaining the practical significance of the decision, these protocols should set forth all post-decision steps that are required to make sure that the solution is implemented. The accountable person throughout the solution implementation phase should provide regular updates to the solution team regarding progress, any roadblocks and how those roadblocks are being addressed.
Key Article Points
- While flatter organizational structures have great potential to quickly take advantage of opportunities, eliminate bureaucracy, and reduce risk, they can also lead to a horizontocracy.
- A horizontocracy is corporate gridlock due to excessive discussion, feedback loops, or solution deliberation.
- To take advantage of the strengths of open-source organizational formats but avoid falling into the trap of horizontalocracy, a company can take several steps.
- These steps include establishing an HPM or similar type of flat organization process management coach, creating a Decision-Making Map, establishing decision-making checkpoints, and developing decision-making protocols.
For additional information about this topic, an article about how to scale flat organizations is here.
The photo for the article was taken by Rob Curran and is available on Unsplash.