The company hierarchy – is it necessary?


One of the most consistent routes for people to find this blog is through the search term “company hierarchy”. At present, this just leads them to a rather trite cartoon by Hugh MacLeod that I continue to find amusing only because I work in just the sort of organisation it depicts.

I do, however, have some personal opinions about organisations and how they are managed. And since passers-by drop in occasionally I don’t see why I shouldn’t inflict those opinions on my visitors…

Previous posts:

We can manage people’s roles in business processes the same way we manage, say, access to network resources; through people being members of groups. People can be a member of an arbitrary number of groups, groups can have an arbitrary number of members. Managing the membership of these groups is simply a business process that a particular group is permissioned to do. Let’s call that group the Board of Directors.

When it comes to giving me a pay rise, the traditional organisation will leave that to my boss. But in a “matrix” organisation it will be a collaborative decision between my functional line manager and my regional line manager (or whatever the dimensions of the matrix are in your company). Managing the matrix is where the complexity arises in larger organisations – whatever dimensions you choose (function, asset class, region, grade etc.) are likely to be wrong for many situations. And you can’t have different dimensionality for different people without it all getting very confusing.

Contrast this with the simple idea that the people who give me a pay rise are members of a group. A group with the permission in the pay rise process to award me a pay rise.

Of course, my pay rise cannot be chosen in isolation. It must be done in the context of next year’s budget and other people’s awards. So the group of people who award pay rises to individuals needs to be aggregated into a larger group that norms the awards across the population. This can be done by simply making my pay rise group a member of another larger group, a group that has access to real-time conversational tools to achieve a global consensus about pay awards.

I’m not talking about a hippy nirvana. Certain roles in certain processes would clearly be very powerful. What I’m saying is that rather than aspiring to be higher up the hierarchy, you could aspire to have more important roles in critical processes. In effect this is what we do anyway – job descriptions are altered to fit people’s aspirations and negotiated terms of reference. Today’s CIO might have far less power and independence than his predecessors even though the job title remains the same.

What we need to do is lose the antiquated framework we currently use to describe people’s jobs.

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1 Response to “The company hierarchy – is it necessary?”



  1. 1 The Company Hierarchy - is it necessary? - CrazyEngineers Forum Trackback on January 7, 2009 at 08:51

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