In a previous blog, we discussed in consultant Sidney Yoshida’s “The Iceberg of Ignorance” research, which found “only 4% of an organization’s front-line problems are known by top management, 9% are known by middle management, 74% by supervisors and 100% by employees.” The result of the Iceberg is decision making with only partial information, and decision making about only some of the issues. Thus, decreasing employee confidence in their leaders.
As Bryan Rusche wrote in The Inverted Org Chart: Putting Employees at the Top, “The traditional hierarchical view of organizational structure lends itself to a style of leadership where division of labor, chain of command and top-down communication dominates.” And those leadership styles are not conducive to melting the Iceberg of Ignorance. Some of the ways that Rusche proposes to combat falling victim to this iceberg are:
- Empowering employees to take an ownership role in the organization’s success.
- Giving employees the clarity and autonomy to decide how to deliver the best work and results.
- Enabling collaboration across hierarchical levels, so employees get the support they need.
Essentially, what is needed is to flip the organization structure. With customers at the top, and customer-facing employees next, it becomes abundantly clear what is important for the organization and what – or who – is driving success. Does this sound familiar?
If you’re an Infosurv Insider blog subscriber, it should sound very familiar. One of the best models for understanding why organizational structure may be holding your organization hostage is the Service Profit Chain, which we have been writing about for a while. The idea of the service profit chain is not new or unique. Per Rusche, the basic premise is the same: “To stop thinking about your organization as a top-down structure for how work gets done. Instead of employees supporting management’s objectives, managers serve employees and leadership serve the broader organization – all with the goal of better supporting the customers.”
The traditional hierarchical organization structure has been around for a while. Reported in the Harvard Business Review, “The management pyramid, as we know it, began to take shape around the early 1900s. There were two important factors that influenced the classical (traditional) management school of thought: The Industrial Revolution and The World Wars.” The structure worked well – until things changed. Over time, markets became more complex; consumers had more options, and even the nuclear family structure eroded in favor of the individual and other influences.
It’s no surprise that the societal and economic changes we have experienced since the Industrial Revolution might have had an impact on how we organize businesses for maximum results. It is surprising that this impact did not cause the structure to change. Most businesses are still organized as they were at the turn of the century!
Clearly, it is time for a change. If you want the benefits of improved employee engagement and enhanced customer satisfaction and loyalty, inverting your organization chart may just be the solution. It won’t be easy of course – and it will be more difficult for some of your employees and leaders than others – but drastic measures can result in drastic improvements. Measuring employee engagement, customer satisfaction, and of course, business performance will help you ensure you make healthy strides forward during this transition.
Could your business benefit from flipping your organization chart? Give it a try and find out!