It’s very common to see a business scale to a certain point but then reach a plateau that can be very difficult to get out of. To avoid this happening in your business and to keep your momentum going, I believe that you need to keep your business flat.
What do I mean by this?
Simply put, I mean running the business with less hierarchy between staff and executives. It’s all about having large numbers of staff being managed by a small number of managers and the people in the chain of command from top to bottom being very efficient, both in terms of number and responsibility.
This flat, or horizontal, organisation structure can bring huge benefits.
Let’s look at some of them here…
1. Ease of communication
I’m sure that many of you who’ve worked in the corporate world will be able to identify with the continuous rat race mentality and the need to fight your way up the career ladder. There’s often many complex layers of organizational hierarchy and a wealth of middle management.
When it comes to running our own businesses though, I personally find that people think differently and often want to implement a different structure. I believe that to organise and improve communications, you need a flatter structure in your business.
By giving staff more input into the overall vision of the company, you will thrive and scale more efficiently.
This topic relates closely to my previous podcast on servant leaders.
Create small, efficient and hard-working teams and train team leaders who can excel in pushing those teams to achieve excellent results.
2. Communication lines are open and clear
When I say communication line I mean the verbal and written connection that exists between staff. The bigger a team gets, the more channels of communication there are to manage. If the lines of communication get overwhelming, communication and therefore productivity, can break down. By implementing a flatter structure, there’s less people involved and therefore the lines of communication are less likely to confuse, conflict and ultimately slow the business down.
How do we calculate lines of communication though? The simple formula to calculate the number of connections between your team members is:
N x (N-1)/2
N is the number of team members. For example, 10 people equals 45 connections and 30 people equals 435 channels of communication that we need to maintain.
This formula allows you to clearly see your channels of communication. If they’re very high, look at how they’re holding back the scalability of the business. Break large teams into smaller ones to keep your lines of communication to a manageable amount.
To improve communication on a day-to-day level, organise your teams together, whether that be physically in the same space, or virtually using software video communications such as Skype.
3. Specialist skills can shine through
A flatter organisation structure allows team member’s skills to shine through because their talents are not hidden in complex layers of middle management.
Truly understand your team member’s abilities and aspirations and use this to move them around the business and build their career with your company. They will feel valued, appreciated and more inclined to stay and grow with you.
It’s really important to identify people’s talent and nurture those abilities in your business to scale successfully.
4. Processes are more efficiently aligned
Centralise your processes within the team and at an organisational level, or often, both!
Here at Rewired for Success, we use a software programme called Process Street to map out all of our recurring checklists and procedures.
Get your team to create videos and learning materials and build your core processes portfolio. It allows teams to move forward and replicate success and it makes it easier to roll out induction and training each time you take on new staff.
By aligning and synchronising your teams, you’re getting your teams to produce efficient and more profitable outcomes.
5. Performance data is much easier to gather
If you’re not having to micromanage teams, there’s time freed up to focus on performance data, allowing the management team to clearly see any bottlenecks and allow them to adjust things accordingly.
It’s important to trust the systems you use to record staff performance and not to move forward until you record and analyse key data points on what your team is doing.
6. You can create teams for everything
A flat organisational structure is built on the concept of growing teams horizontally, rather than vertically with layers of middle management. Don’t be afraid to implement multiple small teams to manage specific projects. My tip – go out, not up!
The key to success is to make sure that all the processes and key performance indicators are coming forward. These are much easier to manage when you are working in smaller teams.
7. You’re financially more efficient
A flat structure offers many opportunities to save money on salaries. Because you aren’t constrained to the hierarchal structure of set salary increases as staff climb their career ladders, you can use your financial budgets instead to reward individuals based on outcomes and outputs.
You can use the value of money to grow your teams and reward people directly for what they achieve in the business.
8. You gain agility
Small teams of up to seven people are extremely flexible and are able to work quickly and efficiently based on direction from the top of a business. This is because the message doesn’t have to filter through multiple management layers within the organisation.
It means that you can make decisions quickly and easily and you’re able to delegate tasks efficiently to move forward with tasks.
Agility and adaptability is everything. Without this you’re not able compete well in the marketplace.
9. There’s less micromanaging
Flat structures eliminate the need for lots of micromanaging and allows your teams the space they need to flourish and grow in their respective roles. If you give your staff the responsibilities they need to thrive, they grow professionally and personally, and the business will reap the rewards.
Next week I’ll be focusing on how to set up teams and overcoming any worries you may have about flatter organisations. I will also be showing you that if you follow my system, you’ll be able to build a large organisation with flat structures.
10. Teams can self-solve
Smaller teams are able to work together to solve problems so there’s no need to tell the team what to do all of the time. The saying ‘all minds are better than one’ applies here, but only if you’re able to create efficient, motivated and well-communicating team in the first place.
11. It inspires innovation and creativity from staff
In a flatter organisation people’s voices are heard much more easily because they’re only ever one or two communication lines away from the management. This flat structure empowers teams and creates opportunities for staff to show great creativity and innovation as everyone has an equal voice.
I hope you’ve enjoyed today’s topic on the importance of keeping your organisation flat as you scale. It’s a great opportunity to think about how you can implement these ideas and have you rewiring your business for serious scale-up success.
Here’s a video of me talking about this topic in more detail: