I recently got very rich exchanges with several professionals on the different types of organizations and how they cope with different topics such as trust, organizational culture and diversity.
This is a topic that I am particularly eager to work on, and to start, I would like to propose here a first analysis of what are the fundamental differences between a hierarchical organization, a flatarchy and an holacratic organization.
Hierarchical organizations: the most traditional form
This model of organization is very top-down, organized through simple, vertical hierarchical links between employees, starting from the top.
One of the challenge of a herarchical organization is communication which is very often done from top to bottom. This can of course be balanced by the communication ability of the leader of the organization.
One advantage of this type of organization is its simplicity and its efficiency in environments that require a strong consistency, a regular productivity and that are not impacted by fast changes. It is direct, with clear and separated roles.
But this strenghth is also a problem because of its lack of movement, the rigidity of the organization, even in some cases the silos that can exist inside.
Flatarchies organizations: ideal for start’up incubators
To go beyond the limitations of hierarchical organizations, searchers and management teams have started to look for different organizational model.
In some cases, organizations started to become more lean, more flat, with a modification of management roles, in order to foster innovation, communication and collaboration. The idea is to work faster, better, and to empower the employees. This is what is implemented in flat structure, that is used quite often in middle size companies.
Flatarchy is at the extrem of that spectrum as the organization is done with a structure of hierarchy, in which you will include some flat teams that will be organized in a more natural way, sometimes without real job titles, in an idea of incubating an idea or a project.
I personally like this type of organization because this allow to have an common organization backbone, with specific services, and at the same time to have some start’up like organizations inside that will run innovatives programs.
Holacratic organizations: the distributed decision making
Holacratic organizations are even more disruptive and quite rare as they are based on the principle to distribute largely autonomy to the employees, as well as to distribute the decision making process. The roles are shared and employees are sometimes cumulating several positions depending on the structure they are in. Information is shared in all the organization and in the idea, the different teams are self organizing even if there is still a certain structure made by the different working groups.
This type of organization may be very efficient when you build a small company, a start’up, as you can work with employees who have diverse skillset. For example, one of your developer can also manage some trainings, as well as some technical customer service. Because of the size of the company, and the fact that it is new, this structure allow the agility needed to transform the organization and to make it grow very fast. It is also a source of motivation for the teams who own part of the decision making of the organization. But for larger organizations, which require a structure, with different heads (legal, communication…) this model may not be appropriate and in that case a Flatarchy may be more adapted. Once again, it all depends on your context.
That being said, I made the choice in this post to talk about these three types of organizations but there are others.
The matrix organization for example is characterised by a hierarchical link to a business head and the attribution to a team or a project on the horizontal side.
Henri Mintzberg also described many other types of organizations, that can be of your interest.
I had various sources for this article but if I had to recommend you two articles on this topic, I would recommend the following article that summarize 5 types of organization analysed by Mintzberg:
I would also recommend the following article from Jacob Morgan on the 5 types of organization he describes, including Flatarchy and Holacracy:
Now that the context of the organization structure has been set up, I will write complementary posts on this topic to discuss that different way of working in these types of organization. We will also share on their benefits and drawbacks, as well as the relation to the individual, to performance, trust and diversity inside these organizations.