The Covid-19 pandemic has a large impact on the worldwide economy and companies are looking for the best solutions to optimize their activities, projects and resources in this period. The entire supply chain of goods was impacted in some domains and in most countries employees faced difficulties induced by the economic consequences of the pandemic. For very hierarchical organizations, the impact is significant and organizations has to adapt in order to face the consequences of the pandemic on their business but also to prepare themselves for the moment where the economy will restart. In this context the question of the organizational structure is important. Some organizational structures can provide more flexibility, such as the model of the flatarchy. Let’s see the advantages and limitations of this model in the context of the pandemic we have to face.
What is a flatarchy ?
Flatarchies can be defined as organizations who have both a hierarchical structure and a flatter structure that is more flexible, more independent and that is called a flat team.
When we analyzed the different types of organizations in our article “Hierarchy, Flatarchy, Holacracy…What’s the Difference ?”, we explained that “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 flat team, which can regroup a variable number of employees with different skillset, is what makes the difference between a purely hierarchical organization where everybody reports to a common structure, and a flatarchy.
What can make a flatarchy type of organization more efficient ?
The advantage of the flatarchy is to use the best of two organizational structures. It takes the structure of the hierarchical organization, with its solid (but sometimes slow) process of validation. It also takes its job structure, quite robust, well documented, but sometimes lacking innovation. And it takes the advantages of flat organizations, with more concentrated and agile teams, able to work quickly, with limited resources to start, to create proof of concept or minimum viable products efficiently and to reinvent their model if needed. In some cases, the flat team are small incubators, sometimes internal start-up, that are working on new projects and that is exactly where they can be a game changer in our context.
Building an organizational resilience while maintaining the ability to innovate
The flatarchies integrating incubators or start-up are already used to take risks and work on innovative solutions. By essence, they are flexible structures, able to reinvent themselves, and sometimes they already included remote international teams.
In the context of the Covid-19 pandemic, most organizations will need leaders to be able to create a sustainable change, to drive the company through the crisis induced by the pandemic, but also teams that are able to innovate, to create with limited resources the new products and the new models needed tomorrow. A great example are companies who shifted their production model to produce goods required by their country, such as protective masks and hydroalcoholic gel.
So the advantage of flatarchies in this context is very clearly to offer the resilience of a structured organization with clear leadership positions, while offering flat and agile teams that can work on innovative solutions in order to help to limit the effect of the Covid-19 pandemic and to find innovative products and sustainable performance models for the post Covid-19 economy.
What can be the limitations of flatarchies in this context ?
The context we face is unique and both its consequences as well as the time it will last are uncertain. In this context, the challenge faced by many organizations is not only an economic challenge but also a leadership challenge.
An excellent article from Deloitte, called “The art of resilient leadership: responding to Covid-19”, mentioned that among 5 fundamental qualities which distinguish successful CEO’s as they guide their company through the Covid-19 crisis, one is to “aim for speed over elegance”. The challenge for companies and leaders is to take decisions in a context that is highly uncertain and in many cases without having all the information and forecast that they usually have.
So, while flatarchies can provide a great source of agility and innovation, they will still need to rely on their top management decisions, which is where it is important to have resilient and visionary leaders on the board.
What could be the solution to avoid this limitation ?
You can’t solve a problem on the same level that it was created. You have to rise above it to the next level.Albert Einstein
If as we said, on one side you have a resilient organization, leaders who decide carefully the next steps and flat teams that are dedicated to innovation, then one solution can be to use the flat teams, not just to deliver innovation and future company products but to participate to the design of the post-crisis company model.
Doing so, you can use all the potential of the flat teams to participate in finding the solutions that will make the company more resilient, more efficient and more agile to go through the crisis that we face. In addition, you can also identify with these teams new areas where your company can contribute to fight the pandemic.
For example, if you take a closer look at companies who are already making changes in the current situation, you can find groups of supermarkets that are delivering fresh products directly to their customers at home in areas where the lockdown is still used, companies who are pivoting from their regular production and build small teams that are using their stocked materials to create products used to fight the pandemic and many more examples.
Building a resilient organization is more than ever a fundamental, even vital topic for most companies. Being able to use the strength of each organization models will make a difference in the way companies will be able to reinvent themselves in order to go through this crisis. In this article, we took only one example, to look at how the flatarchy type of organization can be a game changer to make a company more resilient, but also more agile and efficient during and after the Covid-19 pandemic. What is important is to remember that more than anything, the efficiency of an organization lies in its ability to learn and transform rapidly, and more than ever now.
An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.Jack Welch