As such a strong advocate for coaching, with its emphasis on worker empowerment and growth, you might think that I’d also be an advocate for the ‘flat organisation’. However, I see ‘flat organisation’ as a contradiction in terms and have never been convinced of its value.

The critical reason for that is that a flat structure necessitates that leaders have very broad spans of control, and that in turn means that – despite their good intentions – the amount of time they have to allocate to support each team member, and to teamwork coordination, is limited. Too much.

I recall one of my least pleasant leadership roles where I had 22 direct reports. The boss thought that it would be helpful to have all professional staff reporting to one leader because it would provide a fair and consistent playing field. There was a kind of logic to it.

While OK(ish) in theory, it was spoilt by the reality of trying to empower and coach that many people. And seriously complicated by also including the small 1.5-person HR department, which needed quite a bit of support all to itself.

The reality of the role was constantly competing demands for my time, fractured attention, and inadequate opportunity to focus on actually leading all of those people. That boss clearly didn’t understand good leadership nor good organisational design!

Even with smaller spans of control it’s still a challenge to find the time to coach team members.

 

Two people at work, one writing and the other gazing into the distance

 

These reflections were triggered by a recent series of posts by Bob Sutton Professor at Stanford University Graduate School of Business and author of some great management books, most recently The Friction Project. He’s a long time advocate of good leadership – and calling out and getting rid of bad leadership – and in some recent posts here on Linkedin he again highlighted the value of hierarchy.

Hierarchy helps to make work meaningful

According to Sutton’s 2014 article, which he stands by a decade on, we should accept hierarchy’s value because:

1. It is inevitable – it is a feature of every group or organisation of humans. Status and power differentials exist in all human organising, even when that power is democratised or minimised. Job titles that attempt to downplay power differentials might obfuscate but don’t eliminate the existence of power differentials.

2. Organisations and people need hierarchy. We live in groups and groups need some form of organisation or they tend to become dysfunctional and, paradoxically, more complex. Better to pay attention to your hierarchy and manage it well.

Hierarchy makes the leaders’ job of coordinating work meaningful and prevents the responsibilities of any one leader from becoming impossible.

In 2024, with the increased complexity, sheer pace and increased demands of work, keeping your hierarchy in good working order has got to be a critical hygiene factor. To do that, make sure leaders have clear role descriptions and are given the support they need to exercise their leadership authority with competence and humanity.

Five best ways to create and support good quality bosses

1. Clear role definition and accountabilities, and understanding of what it means to be a leader versus an individual contributor. That includes understanding their role in the hierarchy. There are a few myths there that we need to debunk and I wrote more about them last year.

2. Preparation for each step upwards in the leadership pipeline, before it happens. Understanding how leadership at one level of an organisation is different from the next. Leaders need to be equipped with the tools and means for making transitions up the ladder so that they understand how to lead at each level.

3. Onoing skills development for leaders, particularly for emotional intelligence and how to increase positive collaboration; skill development should never stop. And the growth of AI is only going to increase the need for these skills.

4. A supportive boss and resources, particularly from great HR leaders to help do the hard work of leading people.

5. Data on their performance, their team’s performance and outcomes, reward and recognition of its value to the organisation.

Assigning team members to a good quality boss, at any level in a hierarchy, makes a difference.

The undeniable value of good bosses

Deborah Glass OBE, outgoing Victorian Ombudsman ended her final report on her 10 years in the role with the following quote from Edmund Burke:

It is not what a lawyer tells me I may do; but what humanity, reason and justice tell me I ought to do.

And this quote, within the context of its report, struck me as a fitting summary for the important role that leaders play in organisations and society. The integrity of organisations rests on the integrity of leaders, and while not all roles carry such a burden for it as hers has, still, leaders take on a responsibility for exercising humanity, reason and justice as authority figures, whatever the scope of their role.

As we look to increase Australia’s flagging productivity, one under-explored and under-exploited area is the quality of leaders. The role of leaders is to coordinate the work of others to produce outcomes desired by the organisation. We can expect, and indeed find, that workers led by the best leaders outperform those led by the worst.

 

3 people in meeting with manager granting power to others

 

Research by the late Edward P. Lazear, Kathryn L. Shaw and Christopher T. Stanton showed that the impact of a good boss on worker productivity was significant. The value of a good boss is equivalent to adding a worker to a nine-member team. In research that measured almost 24,000 workers with almost 2,000 bosses over a five year period yielding over 5.5 million measures of productivity they found the following:

1. There’s a significant difference in productivity between best and worst bosses, equating to adding one worker to a nine-member team.

2. The average boss produces 1.75 times as much output as an average worker, which is about their pay differential.

3. The worst 10% of bosses are twice as likely to leave an organisation as the best 10%. (Silver lining?)

4. The best bosses increase retention of workers.

5. The best bosses have a slightly bigger impact on higher versus lower quality workers.

Having a leader matters

An interesting experiment by Matthieu Chemin (2021) found that assigning a leader to student project groups and instructing them to monitor effort increased team effort for a non-routine cognitive task. Instructing the leader to coordinate the efforts of team members resulted in stronger effects: team members had better attendance, teams met for longer and spent more time teaching each other. There were fewer free-riders in the team, and their final grades were better than others. As he says, it’s research based on students, but the work they were doing was meaningful, contributing significantly to their final grades.

YOU NEED TO KNOW HOW THE BEST LEADERS GET THE HIGHEST PERFORMANCE

In an everyday way, we ‘know’ that leaders are at the heart of organisational performance. Yet proving that, and clearly identifying what it is that managers do that distinctly contributes to that performance, and therefore that makes hierarchy work is much less clear. This is particularly the case for knowledge work, where measuring productivity is much more challenging than in other job roles.

Mitchell Hoffman and Steven Tadelis asked to what extent people management skills make a difference in their investigation of upwards survey feedback from tens of thousands of employees about thousands of their managers in a multinational hi-tech firm and reported their findings in NBER Working Paper 24360.

Knowledge workers gave upwards feedback on their boss, answering six questions, with a 95% response rate and this data was aggregated for the research. The (summarised) questions focused on the ability to interact effectively with their team members:

1. Communicates a clear understanding of my job expectations.

2. Provides continuous coaching and guidance on how I can improve.

3. Actively supports my professional and career development.

4. Consults with people for decision making when appropriate.

5. Generates a positive attitude in the team, even when conditions are difficult.

6. Is someone whom I can trust.

These questions are magic. They pretty much have the bases covered when compared with the factors that create burnout.

This is the best way to reduce burnout – make sure leaders have the people leadership skills they need to do the job of leading.

These are their findings:

📌 Good people management skills make a big difference to employee retention, particularly of the highest performers. The authors provide the example that replacing a manager at the 10th percentile with one at the 90th percentile reduces labour costs by 5% due to lower attrition.

📌 Leaders with higher people leadership skills (according to their teams) get higher performance ratings, are more likely to be promoted and receive larger salary increases. (Clearly, in the study organisation, people leadership is truly valued.)

📌 The findings were consistent across hierarchical levels, geographies and occupations, with one caveat: the higher up the ladder and the more cognitively demanding the work, the stronger the relationship between good leadership and retention.

Three people having a coaching conversation, with senior woman providing advice to the others

 

This backs up what we all know intuitively – if leaders support and coach their team members they are happier and more likely to want to continue working for them.

Getting leadership right has a big impact on success

Leadership roles require different values, skills and time horizons, something that flat hierarchies really don’t take into account.

Help to balance the strategic with the operational is a part of why we have hierarchies. Bandiera and colleagues had CEOs keep a diary on what they did and their analysis showed that the CEOs who focused on high-level agendas outperformed those who focused on functional management. If you’re at the top, you shouldn’t be down in the weeds!

This is another way in which an organisation’s structure makes a big difference: as roles become increasingly senior, the activities of the leader must change fundamentally. Personal preferences for practicing technical expertise need to be moderated. Decisions and coordination become more complex, and time needs to be available for these activities.

In similar research to that of Hoffman and Tadelis, Benjamin Artz, Amanda H. Goodall and Andrew J Oswald also looked at employees’ ratings of their direct boss. Their starting point was the often-quoted findings from Gallup that about half of US employees have left a company because of a bad boss. They wanted to test the veracity of this.

They confirmed that the quality of your boss is a key factor in your level of job satisfaction and performance.

The Artz study mined a global database of 27,000 randomly sampled workers from 35 different countries.

The seven drivers of being a high quality boss

Participants in the survey were asked to rate their immediate boss on seven criteria:

  • Provides useful feedback on your work.
  • Respects you as a person.
  • Gives you praise and recognition when you do a good job.
  • Is helpful in getting the job done.
  • Encourages and supports your development.
  • Is successful in getting people to work together.
  • Helps and supports workers.

Firstly, the good news: about 13% of bosses received a perfect score on the seven areas. Overall ratings indicate that 13% had a ‘bad boss’ when they completed the survey. They found that:

📌 People who are bosses themselves tend to rate their own boss more highly than those without such responsibility.

📌 In organisations where bosses are more highly rated, workers have higher levels of job satisfaction.

📌 Another finding of interest was that bad bosses were rated ‘best’ on ‘respect for workers’ and worst on their ability to get the job done; they’re not so much inconsiderate as incompetent.

In their data boss quality seemed best in smaller organisations and those where employees were well-represented and worst in the Transport sector.

 

Four people in office discussing a paper


Kuroda and Yamamoto’s
analysis of the impact of managers on productivity and employee wellbeing in white collar occupations in Japanese organisations reported a similar effect. According to their analysis, based again on employee’s ratings of their managers, the biggest contribution managers make is through good communication.

Managers’ good communication and their managerial competence significantly improves worker mental health, employee perceptions of their own productivity, it lowers presenteeism and also improves worker retention.

Bad communication and low competency increases the chance that workers are actively engaging in job search and/or want to quit their job.

Personality compatibility plays a part as well: the Big 5 characteristic of Emotional Stability (ES) is of particular interest. When the manager’s ES is higher than their worker’s, communication between the two is rated better by the worker. Conversely, when the manager’s ES is lower that the worker’s, communication is rated lower.

From a series of viewpoints – from integrity to economic – the quality of leadership matters. Well-managed hierarchies support the identification, role clarity and ongoing development (including coaching) of their leaders and good leaders improve productivity and wellbeing returning value to the organisation. We need hierarchy, it seems to be one of those fundamental needs we have to create order and meaning in our world. Making it explicit makes more sense than denying it, and makes the job of leading easier.

To all you wonderful leaders striving to do well in these crazy times, take heart. What you do matters a great deal 💜!

🤔  How does your organisation speak about hierarchy? Is it described as valuable or a hindrance to getting quality work done? How does it measure the productivity effect of its leaders?

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