The theory is that a flat organization boosts agility by shortening decision chains and putting leaders closer to frontline employees and the customer experience. With fewer layers, new ideas move more quickly. When employees have more direct access to decision‑makers, they tend to feel more engaged and develop a stronger sense of ownership over outcomes.
AI seems to be supercharging the ‘great flattening’ by giving leaders the sense that they can do more with fewer people and introducing the possibility of automating some middle-manager duties like task allocation and employee counseling.
Workplace culture is also experiencing a generational shift toward flatter orgs as millennials seek more “participative or inclusive forms of management” versus the “command and control” models that Gen X was accustomed to, Oswick says.
But flat orgs can sometimes cause problems in practice. Less experienced workers can get lost on sprawling teams, line managers can get overwhelmed, and everyone in between can feel rudderless. In many cases, Spicer says, teams give into the natural urge to divide into smaller, easier-to-govern groups; in the absence of former hierarchies, they establish makeshift ones.
At Citi, de-layering was part of Fraser’s broader effort to slim the bank down from the gargantuan ‘financial supermarket’ it had grown into and to streamline its focus. She also divested numerous businesses and cleaned up internal controls.
“The thing about the structure is [that it’s] one of the least important parts of an organization,” says Oswick. “If you’ve got really good relationships, really strong culture aligned to the organization’s mission, you’ll succeed in spite of the structure.”
