How important are bosses? Do companies need many bosses to make sure everyone does the job correctly and on time? Well, that depends. At some companies where employees do the same predictable process, a structured hierarchy is important. Sports teams, military units, factory lines are some examples.
In companies where fluid creativity is important, having a boss looking over everyone’s shoulder can destroy the process.
I should note that total worker autonomy is not always good. There are examples where workers without supervision create risk. In an article on “The Register,” Iain Thomson wrote that a programmer outsourced his own job to China. The programmer spent his day on Reddit.com. His tactics earned him top performance awards. An auditor noticed a regularly series of logins from Shenyang, China. The company ended the outsourcing of programming to China.
Valve Software has a flat organization without bosses. The company is a maker of the video games. Their popular software includes Half-Life, Counter-Strike, and Portal. There are no bosses or managers at Valve Software.
In 2012, Valve Software released a copy of its Handbook for New Employees.
Valve labels its no-boss policy “Flatland.” The information in the handbook explains that hierarchy is important in some companies. In these companies, there are many bosses. Having many bosses is effective in companies where employees must repeat the same process. Top-down management works best for predicting and producing these repeatable processes.
Valve is in the entertainment business. Their people are self-motivated. They are creative, innovative, and highly intelligent. The company hires people for creativity, not to follow directions. According to the company guideline, a flat organization stimulates creativity.
Zappos and W. L. Gore are two other companies with flat organizations.
Zappos is famous for its customer service. The company initiated a flat organizational structure at the beginning of 2014. Zappos CEO, Tony Hsieh, has always focused on hiring creative people. The Zappos customer service people find fulfillment in helping customers. You can learn more about Zappos management on the company Code of Conduct page.
At Zappos, the customer service teams have freedom. They treat each shopper as unique. Each customer has specific needs. Zappos customer service the process is not repetitive. Zappos tailors customer service to the customer. Zappos customer service approach is similar to the approach that Valve uses in creating new products. The emphasis of the job is doing what is right for the situation. Employees think of the customers and not the bosses. Zappos hires creative people. Like Valve, Zappos lets the creativity flow.
Zappos is a subsidiary of Amazon. In a section of the Amazon 2013 Letter to Shareholders, John Bezos announced that Amazon has adopted the Zappos “Pay to Quit” policy. The announcement comes under a section of the shareholders letter titled “Employee Empowerment.” Bill Taylor discusses the Amazon policy change n an excellent article on HBR.org.
W. L. Gore and Associates has had a flat organization since its founding in 1958. The company has teams and people who help these teams in a flat-lattice structure. There is no organizational chart. There is no vertical reporting structure. Everyone in the company can drive or create new projects.
Zappos and W. L. Gore appear on the Fortune list of “Best Companies to Work For.” They are great companies who do not have many bosses.
As the Valve Employee Handbook highlights, there are organizations where layers of management are important. Those are companies where repetition of a task is important.