Flat Structure and Open-Door Policy in Medium-Sized Companies
There are various management structures in business. Some of them are good for large conglomerates, others for small startups. Small and medium-sized companies have to balance in between as they don’t need as much structure, but they also can’t be scrappy. Maxima Consulting balances these two styles, and I believe that a flat structure and an open-door policy are crucial to our success.
In this article, I will define a flat structure and its benefits to organizations. In the second part, I’ll explain how we practice an open-door policy and how it affects our employees. In the end, you will learn why other medium-sized companies should consider this approach.
What is a flat structure in organizations?
Simply put, a flat structure is a model where the executives and employees have better contact with each other. Middle management is limited to a minimum, and there is little to no hierarchy. People are responsible for teams or projects, but the team leader/project manager is not “above” other team members.
Within flat organizations, employees have more autonomy and accountability as they take responsibility for their work. The CEO is easily reachable and ready to help when needed, but employees make most decisions without asking for permission. It’s a model that can work brilliantly if you hire the right people and correctly set expectations (and borders).
It’s also exceptionally efficient. Today, many companies rely on remote or hybrid work and simply have to rely less on traditional structures. Traditional supervision of people who are not working in the office is challenging. Today it’s all about collaboration, and that’s where the flat structure is most powerful. On top of that, a study from 2017 by Massimo Garbuio and Dan Lovallo found that an organization with more management layers “... has a direct negative effect on a firm’s ability to reach the market first and on its growth rate”.
The benefits of a flat structure
The most significant benefit of a flat structure is the fact that employees are more engaged in the company’s goals. Each person feels that they contribute to the bigger whole, and they have the freedom to put their ideas into action. You can feel the commitment throughout the organization as people are more eager to speak up, and new ideas pop up every day. But there are many more benefits of introducing a flat structure to your company.
1. Increased responsibility
Employees take responsibility for their work, and people deliver better results when they feel the project relies on them. If you want more engaged employees, giving them more freedom is best.
2. Reduced expenses
In a flat structure, you don’t have as much need for expensive managers who will supervise departments. Each team member gets paid based on their skills and responsibilities.
3. Better coordination and communication
The information flow in flat structures is much faster than in siloed companies. People from various teams meet often and exchange information and ideas. In case of issues, employees go straight to the person most qualified to solve them.
4. Increased productivity
Teams that rely on the managers' or leaders' decisions before taking action are slower and less productive. Employees without a direct manager have the freedom to make decisions on their own, and they work harder to deliver.
5. Better company culture
You’ll have a much better company culture once your employees become friends. In a flat structure, people understand each other and know that everyone contributes to a greater goal. If there is competition, it’s healthy and elevates everyone.
6. More recognition among employees
Celebrating each other's successes is more common when you work toward the same goal. Employees understand their roles in the process and celebrate every achievement, which has an incredible impact on morale.
7. Faster decision-making
Without the additional management layers to break through, making a decision is much easier. The management team gets involved when the decision is significant, and the employees take responsibility for BAU activities.
8. Greater job satisfaction means lower attrition
A happy workforce is a resilient workforce. In flat-structured organizations, employees are overall more satisfied, which directly impacts attrition levels. High-performers want freedom, so they prefer to stay in such companies.
9. Self-managing teams
Employees that work together for an extended time learn how to manage themselves, but they also learn how to manage whole projects without the need to involve senior management all the time.
Trust is the backbone of every flat organization. The management team has to trust its employees that they will work hard and deliver results, but all employees have to trust the management team that they are there for them. A few people give direction and guidance, but the frontline employees take care of the work by themselves. The key to success is frequent communication. All employees must often communicate and don’t hesitate to ask for help when they need it.
What is an open-door policy?
Having an open-door policy means that every employee can come to the manager, CEO, or other executive and talk about anything related to the company. The people responsible for the company’s direction leave their doors open for conversations with employees. Everyone can get in touch with the leadership whenever they need to. They can talk about any issue to come up with a solution together.
This approach forces the leaders to become mentors who advise people on the direction they should take. This policy fosters collaboration, mutual respect, and trust. Organizations that practice an open-door approach have to ensure that their managers understand that every business relies on people. In such organizations, information moves faster, and managers can make improvements before a minor issue becomes a company-wide problem.
What are the benefits of an open-door policy?
The biggest benefit of an open-door policy is increased trust. Your employees have much more confidence in the company once they understand that you hear them. In bigger organizations, people often feel like they can’t change anything, but with an open-door policy, every employee can contribute. They can see how their ideas come to life and how their feedback influences the company’s evolution. Obviously, there are many more advantages to having your metaphorical doors open.
1. Increased morale
Your employees feel better at your company because they know someone will listen to them.
2. A better understanding of employees
You get to know what your employees care about and what they expect from the organization.
3. Higher engagement and communication
People speak up when something is not right and are eager to solve issues before they become problems.
4. More ideas for improvements
All the clever people in your company already know what you can improve upon, but they need a chance to say it.
5. Better workplace relationships
Once your employees see their ideas are valued, they will be more eager to talk and discuss issues.
6. Streamlined flow of information
People won’t have to work through layers of management to reach the primary decision-maker, and you’ll better understand what’s happening in your company.
7. Faster problem-solving
To solve problems fast, you must stay in touch with daily work. An open-door policy means your employees inform you when your input is needed.
8. Welcoming work culture
With an open-door culture, your new employees see they can count on you in their time of need.
9. Healthy and constructive discussions
People are often scared when they have to talk with the management, but with an open-door culture, they won’t be.
How a flat organizational structure and open door policy work at Maxima
All employees at Maxima Consulting know that our leadership team is just a call away from us. We can reach out to everyone in the company when it’s needed. In every situation, our managers are there if we want to talk, and they really want to help. For us, a flat structure and an open-door policy are both logical and useful.
New and existing team members are engaged, and everyone feels they contribute to the company. Managers facilitate teamwork and decision-making, but they also act as regular members of the team. The leadership doesn’t micromanage anyone, so they have fewer things to worry about. They can trust us to take care of minor issues and inform them when their input is needed. Our teams are self-standing and diligent.
If you want to work with a team that takes full responsibility and always delivers, get in touch. Our consultant will walk you through our services and explain what Maxima Consulting’s IT experts can do to give your business a technological advantage.