Wednesday, March 4, 2015

Does a Flat Organization help or hinder Talent Management

What drives the impact and success of talent management is a factor of having the right people (capability) with the right mindset (business first), getting the right tools (solutions) to solve the right problems in the right way.

Due to the hyper-connectivity and "always-on" nature of digitalization with the emerging digital technology trend, the functional borders are blurring and organizations have become flatter and dynamic, does such structure help or hinder HR? And how can a highly-effective HR catalyze business's digital transformation?

HR effectiveness is not dependent on the organizational structure: It is the people in the organization that HR must manage and develop. Flat organizations have a chance to optimize the engagement, accountability, and freedom to act if the right people management practices are applied. It's not about whether the organizational model is inferior or superior, but rather it's about adaptability and the capacity of those in leadership roles in management and HR. Once organizations grow larger, it is not uncommon to find multiple models being deployed within it. Many time issues occur because the HR function has been designed to support only one model in an organization that has multiple models. The areas that run different models will have recurring conflicts with HR.

HR is like water, it takes the shape of its container-the organization: Success of HR is not dependent on the business model. The measures of success for HR in a silo-based organization may be different from the measures of success for those belonging to a flat structured organization. HR needs to understand the types of structures that are really being used at all levels so they can properly support the organization. Whether flat or tall or any other structure, it is decided by the nature of the industry. What really matters is the communication flow which needs to be managed effectively and the styles of leadership and decision making, which makes the organization robust and lively.

The nature of the HR function is to provide talent management support of the organization in achieving its objectives: The structure, scope, and nature of the organization, will require different HR management solutions/practices, but overall the impact of HR professionals and HR Management (by all management) needs to be in line with respective organization's objectives (be it operational, tactical or strategic). HR as a function exists to handle among others, conflicting situations arising out of a structural matrix. Therefore it can’t suddenly ask for a flat organization to become effective. The business drives the structure and it tries to ensure a balance between the cultural why, the economic what and the political how. It is much easier to leverage collective intelligence, get the communication going fast. HR interventions/policies will be much simpler. In that context, the flat structure is an enabler and not a hindrance.

It is HR's role to ask whether at any point in time the structure is appropriate and fit for its purpose: HR has a significant role to play in enabling the organization to perform and achieve its goals, and that structure will influence HR's areas of focus and priority. Therefore HR should be profoundly interested in the nature of the structure because it is HR's role to ask whether at any point in time the structure is appropriate and fit for its purpose. HR is most effective when there are demonstrative value and support from organizational leaders in the recruitment, selection, retention and talent development of its human resource capital (HR inclusion in strategy/employee related matters and sufficient staffing, funding, operational resources, etc.). Active engagement with leaders at all levels of the organization is critical to achieving an overall competitive advantage.

It depends on the mindset and competencies adopted by HR to manage the respective organizational structures: Within traditional hierarchical structures, mechanical 'command/control' mindsets appear to be the norm, and similarly perhaps function aligned with strong focus on compliance-related issues, less upon leadership or focus on the soft skill competencies (that are often the hardest). Further, the structure on the organizational chart doesn't necessarily mean anything. You can have a flat formal structure in which people actually operate from a hierarchical mindset, as well as a hierarchical formal structure in which people actually operate from a flat mindset. Regardless of the structure on paper, the character of the relationships between people is what gives the organization its true structure. The flatter the organization the better for information flow, engagement, accountability, and the freedom to act. Information exchanged are free flow, accessible to all group members and you are able to appreciate each other's thoughts. that is the difference between flat structure and silo-based structure.

People are engaged and interested in exploring ideas and options: The hallmark of what great HR people bring to the table. The focus would be more on removing the closed sub-groups level and get everyone along at the overall company level and probably that will be a challenge for HR. All structures are a result of some sort of compromise in achieving the 'line of best fit' as one size and shape does not always satisfy all. If HR is moving into the flatter, collaborative and networked organizational structures, retaining the legacy of what it has always done with hierarchical organizations won't cut it. Using old ways of managing to new ways of doing will be ineffective - horizontal organizational forms will rely more upon the soft 'relationship' skills and intangible capital to provide it with the collaborative advantage it has been designed for. If HR does not possess this mindset/awareness or competencies to lead and develop the collaborative competency of an organization, then it would appear to be a fish out of the water.

It is not so much as to whether a flat organization is going to hinder or help HR: But why HR will need to adapt to leading the flat organization. The trend is toward flat, and networked organizations replacing the traditional hierarchical organizational forms in our relational/knowledge economy. An increasing focus is on soft skills, intangible capital, knowledge management, leadership rather than management, organizational behavior are examples of the shift in thinking for HR to adapt. Flat organizations make the role of HR all the more important.
(1) Flat organizations need horizontal growth to keep employees motivated. HR should work with managers to create Proper Job rotation
(2) Job rotation needs cross skills and competency building infrastructure
(3) Flat structure comes with greater empowerment and decision making in the hands of managers and employees. This needs continuous training for employees to be able to take those decisions
(4) Another strength of flatter, networked structures, particularly those built upon diversity, is the friction caused through the constructive conflict of ideas, values, interests etc; once resolved lead to co-creating knowledge, of something new leading innovation and growth. This friction provides the organization with energy. Diversity and flat, networked structures also enable the rapid coalescing of the complementary knowledge, skills, and resources needed to solve the problem or capitalize upon opportunities as they arise.

HR is all about talent management and culture development as well. Organizational structure is a tool of strategy. The structure can and should change over time and with the anticipated environmental change in circumstance. Aligning internally with structure is a survival tactic. Any who don't align are marginalized and divested. HR is no different from any other tactical function in that regard. Although the organizational model itself while helpful is not what ultimately drives whether HR is successful or not. What drives the impact and success of HR is a factor of having the right people (capability) the right tools (solutions) and the right mindset (business first). HR shall play a more proactive role in leading organizational structure innovation, and to facilitate the effectiveness of a given structure by importing the human capital that's well suited for it, and facilitating the export of obsolete and inflexible human capital. HR needs to be flexible and agile enough to evolve as the company's competitive landscape and play the bigger role in digital transformation.


I think flat organizations have self-driven/independent managers. They are usually employees that initiate projects for the sake of the company. The culture inside every flat organization is different than an average company. You can find such examples of structures in the diagram community of Creately Org Chart Software

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