Organizational Hierarchies

In the pursuit of efficiency, many organizations are experimenting with flatter hierarchies. Senior leaders trumpet the virtues of "lean management" and "fewer layers," positioning these moves as antidotes to complexity and bureaucracy. But what does efficiency truly look like in a leadership structure? The answer depends on the nature of the organization, the work it performs, and—critically—the context in which decisions are made.

The current economic climate has amplified this conversation. As companies tighten their belts, they often apply budget cuts indiscriminately. Instead of thoughtful, strategic cost reductions, many organizations resort to broad-brush measures, cutting every department by the same percentage. It’s a tempting approach—simple to implement and easy to explain—but it’s also a surefire way to undermine long-term success.

One of the most common targets? Middle management. Reducing manager headcount is seen as a quick win, eliminating “overhead” while preserving frontline and executive layers. But this simplicity is deceptive. Flattening hierarchies without understanding the nuances of your work and workforce often leads to inefficiency, disengagement, and lost opportunities.

The Nature of the Work Determines the Structure

To understand how flat your organization should be, you must first assess the nature of the work. Are your teams engaged in nuanced, technical, or creative tasks that require deep expertise? Or is the work repetitive and process-driven, with predictable challenges and well-documented solutions?

1. Nuanced and Technical Work

Leaders overseeing technical or strategic teams need time and bandwidth to engage deeply. They must understand the intricacies of the projects their teams are working on, anticipate potential roadblocks, and provide meaningful guidance.

In these cases, a flatter structure risks overextending managers, diluting their ability to lead effectively. When leaders are spread too thin, they become reactive, focused on putting out fires rather than driving outcomes. This not only hinders team performance but also erodes trust—employees sense when their manager isn’t truly present or engaged.

2. Routine and Process-Driven Work

Conversely, in roles with repetitive tasks—such as transaction processing, form approvals, or other standardized operations—leaders don’t need the same level of technical depth. Their role is more about ensuring consistency, addressing bottlenecks, and maintaining morale. In these environments, flatter hierarchies can work because the work itself is predictable, and teams need less hands-on guidance.

The distinction is critical: nuanced work requires depth; routine work thrives on breadth.

The Anti-Pattern of Simplistic Solutions

The current push for flatter hierarchies often reflects an organizational anti-pattern: failing to make strategic decisions and opting instead for what’s easy, visible, and replicable. Broad budget cuts, applied evenly across departments, are a hallmark of this approach. They create the illusion of fairness and simplicity but ignore the unique needs and contributions of different parts of the business.

Middle management is often the first casualty of this thinking. Dismissing managers as "overhead" ignores their critical role in guiding teams, fostering innovation, and driving results. When senior leaders fail to make strategic cuts, their reports follow suit, implementing similar short-sighted measures. This cascade of poor decision-making perpetuates a cycle of inefficiency and disengagement.

It’s no surprise that companies operating this way survive despite these measures, not because of them. The organizations that thrive are those that take the time to analyze their unique needs and align their structure accordingly.

The Leadership Pendulum

Economic pressures also play a significant role in the oscillation between flattening and layering. When resources are constrained, flat hierarchies are perceived as a way to "do more with less." But this comes at a cost.

In the context of software, where complexity and nuance dominate, layered hierarchies are almost always a better approach. They provide the depth needed for managers to lead effectively, engage deeply with technical challenges, and foster team growth. Flattening may save costs in the short term, but it risks losing the very expertise and support systems that drive long-term success.

How to Choose the Right Structure

1. Understand Your Work Start with the nature of your organization. Are you solving complex, technical problems or executing well-defined processes? If it’s the former, leaders need depth and focus. If it’s the latter, breadth can suffice.
2. Define Leadership Roles Clarify expectations for your managers. Are they administrators, expected to coordinate schedules and approve requests? Or are they strategists and mentors, guiding teams through ambiguity and innovation? Align your structure to these roles.
3. Beware of Overcorrection Flattening is often a reaction to perceived inefficiency, not a strategic decision. Don’t conflate fewer layers with better leadership. An overburdened manager isn’t more efficient—they’re just more overwhelmed.
4. Measure the Right Metrics Efficiency isn’t about headcount; it’s about outcomes. Evaluate whether your structure enables managers to drive results, retain talent, and foster innovation. If your leaders are focused solely on administrative tasks, you’re likely leaving value on the table.
5. Challenge Conventional Wisdom Just because "everyone else is doing it" doesn’t mean it’s right for your organization. Take the time to assess your unique needs, and don’t be afraid to go against the grain when it serves your long-term goals.

Leadership as a Craft

Great leadership isn’t about maximizing the number of direct reports or minimizing layers—it’s about designing structures that enable leaders to lead effectively. Organizations must resist the temptation to flatten for the sake of optics and instead ask: What do our leaders need to succeed? What do our teams need to thrive?

In a world obsessed with efficiency, the most effective organizations are those that take a thoughtful, nuanced approach to leadership design. By understanding the nature of their work, recognizing economic pressures, and avoiding simplistic solutions, they create environments where leaders can lead and teams can excel.

Final Thoughts

The most dangerous trap isn’t inefficiency—it’s complacency. A failure to question trends and challenge assumptions leads to cycles of poor decision-making that undermine the very goals leaders seek to achieve. By focusing on strategic design and thoughtful leadership, organizations can break free from these patterns and chart a course toward sustainable success.