Two Cheers for Hierarchy

... the worst way to organise groups of people, apart from all the other ways.

Hierarchy has got a pretty bad name these days. When a company is referred to as “hierarchical” you can be pretty sure it isn’t being given a compliment.

Let’s unpack this. Play the word association game around hierarchy and some terms that may come to mind include:

• Slow

• Disempowering

• Dysfunctional

• Rigid

• Top down

Hierarchies are viewed as rigid chains of command, composed of bosses and subordinates, where power flows in one direction and where those at the bottom are disrespected and dehumanised. But is that necessarily the case?

Wikipedia defines hierarchy as:

an arrangement of items (objects, names, values, categories, etc.) in which the items are represented as being "above", "below", or "at the same level as" one another.

In the case of an organisation, the “items” are job roles and, implicitly, the people filling those roles.

Hierarchy is an organising principle; nothing more, nothing less. The concept says nothing about how the different strata relate to each other, or about the way in which people within the hierarchy are valued.

So why are hierarchies so reviled?

It's all about execution

Like with most hard things, the execution of an effective hierarchical structure is difficult. Good execution, good hierarchy. Bad execution, bad hierarchy. And a bad hierarchy is all of the things mentioned above, and more.

A common problem is that many people have only ever been part of a bad hierarchy. This leads them to draw the wrong conclusion. Instead of concluding “our hierarchy is bad, let's fix it”, they conclude “hierarchies are bad, let's eliminate hierarchy.”

Enter the “flat” organisation.

The “flat” organisation that isn’t

Believing in a flat organisation is like believing in a flat Earth. The concept starts to fall apart when you look further, or deeper, or more carefully. It is a beautiful and intuitive concept that, alas, doesn’t obey the laws of social physics.

While a very small organisation may be able to get away with minimal hierarchy, as that organisation scales without some structure being put into place, bad things start to happen.

The first thing to note is that there is really no such thing as a large organisation with no hierarchy. Without one being put into place, a “shadow hierarchy” emerges. Nature abhors a vacuum: power always resides somewhere, and the crystallisation of the organisation around that power starts to create an informal, undocumented, unaccountable hierarchy. You get most of the worst aspects of the hierarchy, and few of the good ones.

Without a well-designed hierarchy, an organisation is likely to experience the following:

• Ignorance and misalignment.

• Poor allocation of resources.

• Nepotism and favouritism.

• Opacity and an absence of effective processes.

I’m sure I am overlooking some other pernicious effects. But like any libertarian dream, the “flat” organisation is just that: a dream.

Good hierarchies

So if you accept that you are stuck with hierarchy, you may as well design a good one. What are the the characteristics of a well-designed hierarchy? In my view, a good hierarchy provides the following services:

A transmission network. A hierarchy can and should act as an efficient network for the distribution of information and propagation of alignment across an organisation. Take that network away and you may find that information doesn't get to people in time (or ever) and that much work is wasted.

A support structure. While the “upside down" pyramid concept is too humble by half, there is an element of truth to it. A key function of a hierarchy is to support the teams and individuals doing the work of the business. That support takes many forms, such as removing obstacles, resolving disputes, providing adequate resourcing, enabling career growth opportunities, and more. Take away the hierarchy and you take away the support structure.

Effective decision making. Good decision making is distributed and takes place as close to the bottom of the hierarchy as possible. However, there are many times when a decision needs to be made further up the chain. One class of such decisions are resource allocation decisions, where a leader will need to allocate a fixed pool of resources to multiple efforts and teams. Having no single point for making such decisions leads to paralysis. Another class of such decisions is escalations: when two parties cannot agree on the correct decision to make, a hierarchy allows them to escalate the decision up to their “least common ancestor” in the structure, who will be able to make a clean (and hopefully principled) decision to resolve the conflict.

There are many ways to design a good hierarchy, and there are factors unique to each organisation that go into its design. However, I would like to share an approach that I use to structuring hierarchies that has worked well for me.

Teams all the way down

The way I like to structure my hierarchies is using an “overlapping teams” model¹. In this model, every manager (except the leader at the pinnacle of the hierarchy) is a member of two teams. The first team consists of their immediate manager and all their peers who also report to that manager. The second team consists of themselves and all of their direct reports. The manager is the leader of the team, but it is their job to create an empowered, unified team culture rather than just managing a bunch of individuals.

To make this concrete: imagine a Director of Engineering, reporting to a VP Engineering, and with a number of Engineering Managers reporting to them. This person will be a member of team consisting of the VP Engineering (their manager) and the other Directors of Engineering (their peers). They will also be a member of a team consisting of themselves and all the Engineering Managers reporting to them. In both cases, those teams should:

1. Have a clear scope of responsibility, which is closely tied to enabling the success of the part of the organisation they are responsible for.

2. Have a genuine sense of team. I call is a “sense of we”. The manager should be the leader of the team, but not the boss. If the team doesn’t take collective ownership for the success of their collective organisation, it is not a team.

In my experience, the overlapping teams model offers a number of benefits:

• The overlapping nature of the teams enables robust bidirectional communication channels.

• Leaders feel less lonely. Instead of feeling accountable to their manager, and obligated to solve their team’s problems more-or-less on their own, the leader is able to call on the support of not one but two teams to help them do their job.

• The team-with-a-leader structure offers a great compromise between collaborative decision making and a single-decider model. Ultimately, there is always a single decider with clear escalation paths. However, the aspiration to be a first-among-equals team leader rather than a dictator means that the structure naturally invites dissent and debate.

Role vs. Person

One important thing to realise is that the hierarchy is one of roles, not of individuals. It is inevitable that the position of a person’s role in a hierarchy will bleed into their status as a human being. But do not make things worse by conflating the two: a hierarchy is a way of structuring roles in an organisation; nothing more, nothing less.

1. I do not have empirical data to suggest this is the best approach, but I find it works well for me and my organisations. Your mileage may vary.