An hierarchy is derived from an organization’s strategy for reaching its consumers or customers. It may manufacture a product or trade in a product or provide a service but each activity defines its operational layers that determine the fastest way to make a decision and implement it. Larger organizations tend to build overlapping layers in hierarchy over the years but it is imperative to revisit the structure at intervals and make it as lean as possible to serve the customers. Such a set-up will have a clear line of responsibility of a manager and his/her accountability for a defined outcome that is expected. Also it is easier to find out at what point of a decision making chain, a strategy or its execution has failed to help take a corrective action. We have seen companies cutting down on service lines and man power to bring in the agility to deliver a product or service because the excess flab has retarded the growth and profitability.
Does Hierarchy in an organisation impede the growth of an individual?
Most of you would say Yes and rightly so. The more the layers in the decision making chain, the higher will be lack of motivation and fire to excel. Many successful organisations have been able to handle it better by breaking the decision making chain into smaller ones and making new leaders responsible to manage P&L of sub-units and cost centres. They have understood that the frustration of an employee that he or she is not being heard or recognised could kill innovation and blunt the talent.
Similar to an agile way of developing and delivering a solution to a customer, a decentralised hierarchy and a leaner team makes it agile and responsive to a new situation or environment or a market demand. Smaller units bring in a sense of entrepreneurship to achieve the common purpose of the larger unit or the organisation. Incremental values added by these units help to appreciate the contributions from managers and their teams.