Business Brains

What an organization looks like when it's flattened

Posting in Design

For years, observers and authors have preached visions of the "flat" organization, that ideal corporate utopia that has wiped away its hierarchy and o...

For years, observers and authors have preached visions of the "flat" organization, that ideal corporate utopia that has wiped away its hierarchy and organization chart. I've seen cases where CEOs sit in a cubicle right out in the thick of things with everyone else. But what, exactly, should a "flat" organization look like?

Matthew May, author of In Pursuit of Elegance: Why the Best Ideas Have Something Missing, recently posted an account of an extremely flat organization that has been around long enough -- two decades -- to demonstrate how one company that flattened its organizational chart was able to deliver results over the long haul -- and that it wasn't some faddish flash in the pan.

May describes how Jean-Francois Zobrist, CEO of French company FAVI, an autoparts supplier manufacturing copper alloy components, eliminated all vestiges of corporate control, including personnel, product development, and purchasing. Zobrist said he told employees upon arriving on the scene: "Tomorrow when you come to work, you do not work for me or for a boss. You work for your customer. I don’t pay you. They do."

The flattened structure essentially was based on employee teams that acted as their own independent businesses to the customer. There's a team for each major customer -- which includes Fiat, Volvo, and Volkswagen. According to May's report, each team handles its own human resources, purchasing, and product development.

The teams spend their time working directly with the customers, not fussing with corporate and dealing with reports, policies, and political issues. The flat organization approach is smart business because it connects employees and associates directly with customers, and keeps the organization out of the way.

Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure