Last week, The Wall Street Journal ran an article about the bossless company (“Who’s the Boss? There Isn’t One”).  It discussed employers who have made a flat management hierarchy work for them.  That’s right:  FLAT!  As in no boxes with arrows pointing down to an ever-increasing array of boxes.  And, the flat structure is not a model designed solely for small companies.  According to the article, GE’s aviation facilities use it, as does the maker of Gore-Tex.

At least one pioneer of “flatland” is a company called Valve, an entertainment outfit located in Washington that got its start in computer gaming.  Its “Handbook for New Employees:  A fearless adventure in knowing what to do when no one’s there telling you what to do” was leaked onto the Internet a couple months ago.  It’s an entertaining and informative read, even if you’re not contemplating removing layers of middle management from your company.  Some business owners might even find it inspirational.  In fact, the title of this column is pulled from the Handbook, where Valve reassures its new employees that they will not be judged for drinking the company-provided espresso, on their way to a company-provided massage, while their clothes are being laundered in the company laundry, as those benefits are there to be enjoyed without fear that the business will fail – that is, unless the company starts providing caviar at lunch. 

There are many benefits to a flat organizational structure.  Because employees have more responsibility, they must be more active and productive at work.  Of course, that makes hiring the right people to begin with instrumental to any success the business may have.  The absence of reporting levels also increases communication, reduces costs, and improves customer relations because the relationship is direct.  Creativity flourishes. 

On top of all that – and as the experience at Valve demonstrates – employees flourish too.  Without a traditional job description, employees naturally become cross-trained due to the project-centered work focus, and may even learn management skills.  Collaboration amongst team members expands skill sets to other substantive areas beyond the employee’s main expertise.  De facto leaders rise to keep the project moving and just as quickly dissipate at the project’s conclusion.  At Valve, workstations are on wheels so that teams can form and re-form as needed.  In fact, Valve has a computer site that tracks where folks have plugged in their workstations just so they can find each other in the building.

One downside to “flatland”, as Valve calls it, is that it may take more time to weed out poor performers, since there is no single manager overseeing the work and employees evaluate each other (perhaps a topic for another day).  Adjusting to growth can be difficult, too.  The organization needs a strong, widespread commitment to the structure to ensure communication does not wane as size waxes.  Finally, joining such an organization tends to be a huge adjustment for new employees who are accustomed to external direction, but are now left to decide how and where they might best benefit the company.  That’s why Valve’s Handbook is all about “how not to freak out now that you’re here.”  Without a doubt, it’s the most entertaining handbook I’ve ever read.  See for yourself here.


Vanessa Towarnicky's primary focus is in the area of labor and employment law. She has been involved in representing clients in various employment cases, including sexual harassment; deliberate intent; age, race, and disability discrimination; wrongful discharge; and various other employment-related torts. She is admitted to various state and federal courts as well as the Third Circuit Court of Appeals and Fourth Circuit Court of Appeals.
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