Ah flattening the corporate hierarchy, how many times have organizations seen this cycle? Sure flat organizations lead to less bureaucracy through shortening chains of command, but it seems the flatter the organization the more people have to work their ‘networks’ to get things done. The short answer in designing an organization structure truly depends on the type of people working there and the lifecycle of the company.
For instance, I remember when our Advisory Practice started working with Cisco Systems in the heady days of 1998. Cisco personnel were incredibly motivated… by the stock price that is. They were aligned, everybody we met there knew how to make the company money, and how they contributed. Quite glorious. But as Cisco underwent a rapid expansion, less entrepreneurial types moved in. People who cared about their job title and how much square footage their office had. People who had come from very large companies and needed the comfort of administrative processes around them.
As soon as John Chamber’s face was on the cover of Fortune magazine, we knew that Cisco would never be the same again. So started turf wars, massive amounts of internal gossip and a loss of that external focus that had got them to where they were. In rolled motivational coaches, and leadership off-sites where previously there had been none. It is all about the lifecycle of the company, it is about being able to roll with the punches. But better executives anticipate the punches before they come.
Who knows if GE’s new structure is the right one – when the term ‘right’ is not really applicable. The point is to take some perspective and see if you can anticipate where changes need to be made in the structure of your organization.