Flat is cool. Delayering is in. The CEO works in an open space with everyone else. What's not to like?
Maybe nothing is not to like, but....
One aspect of delayering often not addressed well is that trust and layers are usually inverse relationships: to wit, low trust organizations can substitute C&C through layers, each defined with protocols -- authorities, responsibilities, escalation, appeal, etc., but high trust organizations find that these things scattered among layers are really not necessary.
Now as you delayer, what is the mechanism to build trust as protocols fall by the wayside along with their companion C&C structure?
Suddenly people who were accustomed to the crutch of bureaucracy find themselves more less out on a flat (delayered) limb! See: "deer in the headlights" phenomenon, and related insecurities attendant to exposure and decision making.
Now the question: can these people -- newly flattened -- now be trusted to do the right thing; summon appropriate wisdom; apply reasonable judgment; and not be panicked by circumstances?
Obviously, there's no answer in general. All is in the particular. Suffice to say, however, that many won't make it flattened. They simply need the bureaucracy in order to function personally. If they didn't, many -- but certainly not all -- would be working somewhere else. They really can't be trusted to work effectively without the structure.
After all, the structure absorbs a lot of the shocks and stresses of everyday work -- do these now fall on the individual?
An obvious exception to flat: the military (or first responders, like police and fire, etc) -- the largest bureaucracy for many.
Duty, honor, country... they still count for something, thank goodness!
But even there, many summoned to high (or higher) command with fewer layers above them and fewer dependencies beside them simply don't make it, particularly under high stress.
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