Steps to Thrive in a Flat Organization

"Business organizations are flattening."

I shared this observation last Monday at the UCLA Anderson School of Management. The UCLA faculty and staff of the MS Business Analytics program had invited me and a few other industry leaders to the UCLA MSBA Industry Summit. The university wanted to hear about industry trends so that the Business Analytics program can better prepare students to enter and thrive in analytics roles in industry.

The topics also spanned to the impact of Generative AI on entry-level workers, and the future of hybrid technical/business roles like data science and analytics. I’ll share more on my views about those topics another time.

For today, I’ll share my views on how people can respond to the trend of flattening business organizations.

Why Do Organizations Flatten?

A recent trend among large enterprises has been the flattening of the organization. Flattening means removing levels of management to reduce the organizational hierarchy, which may have bloated over time. The company benefits by becoming more agile and responsive while cutting costs. Flattening the organization is part of a broader business strategy of retrenchment to cut less-profitable products and teams (e.g. Pixar Lays Off 175 Workers as It Returns Its Focus to Films).

What Happens in a Flat Organization?

• Many first-level managers are either laid off or converted into individual contributors. Other management levels get thinned out.
• Remaining managers take on more responsibility for broader scope as different teams get consolidated in the reorganization after the layoffs. A manager may even become responsible for a loose assortment of different business areas or functions after the reorg. The new assortment might not necessarily have a natural affiliation with each other.
• There’s potentially less business appetite for bottoms-up creativity and innovation. The intent of the flattening and retrenchment is for the business to become more agile and focused on the handful of business priorities set by top management.
• There’s more opportunity for lateral job changes than upward career advancements.

Two months ago, I met a first-level data science manager who now has 18 direct reports after a reorg.

Each direct report covers a unique set of projects and stakeholders. A manager can’t feasibly support so many direct reports with much detailed attention.

Workers are expected to become more self-sufficient to complete their own projects end-to-end. Workers need to be business-savvy enough to step up to get their own resources and alliances and professional development.

Workers should essentially act like an owner.

Bootstrap Experience for Entry-Level Workers

New trends with AI further compound the effects of flattening organizations on entry-level workers.

• Generative AI is increasingly used to automate more basic tasks. Previously an entry-level data scientist or business analytics associate may be assigned to run a SQL query for a data pull or customize a dashboard for a product manager. Now Gen-AI-enabled tools (like Tableau, PowerBI, Cognos, and homegrown BI tools) can generate the SQL and dashboards directly with natural language queries by business users. Similar automation trends are happening with tasks in business research, content creation, and software programming for businesses to do more with less resources. What becomes of the role of the entry-level worker if these basic tasks are automated?

Businesses would rather hire seasoned experienced workers than entry-level employees in a flat organization that uses AI. With a more streamlined workforce, businesses want to hire people with more experience, so long as that experience isn’t too expensive to hire.

How would entry-level workers get the prerequisite experience needed to get hired into a flat organization? Is graduating from school enough?

I would suggest students step up to launch and lead clubs, volunteer for long-term commitments, and run side gigs to get that actual experience.

All professionals can do likewise for increasing leadership skills and gaining options.

How Can Individual Contributors Thrive in a Flat Organization?

• Embrace Autonomy: Take initiative and be proactive in your work. With fewer managerial layers, you have more freedom to make decisions and take ownership of your projects within the constraints of business priorities. Demonstrate your ability to work independently and solve problems on your own.
• Build Strong Relationships: Develop good working relationships with colleagues across different functions. Collaboration and teamwork are essential in a flat organization, so being able to work well with others is key.
• Enhance Communication Skills: Clear and effective communication is crucial. Ensure you communicate your ideas, progress, and any issues promptly to relevant stakeholders. Being articulate and responsive will help you stand out.
• Commit to Continuous Learning and Flexibility: Embrace change and be willing to adjust your approach as needed in a dynamic and fast-paced flat organization. Stay curious and committed to your personal and professional development by taking advantage of training opportunities and seeking out new skills. Develop cross-functional skills to contribute across various areas, making you more versatile and valuable in a fluid role structure.
• Show Initiative, Creativity, and Innovation: Be willing to take on new challenges and suggest improvements. Demonstrate creativity and resourcefulness in problem-solving and contribute innovative ideas that drive the organization’s growth. In a flat organization, showcasing your ability to think creatively and take initiative can set you apart and add significant value.

These tactics are all consistent with Top Skills to Future Proof Your Career.

How Can Managers Thrive in a Flattened Organization?

• Facilitate Open Communication and Collaboration: Ensure that communication flows smoothly across all levels of the organization by encouraging open dialogue and actively listening to team members. Foster a collaborative environment where employees feel comfortable sharing ideas and working together, and promote cross-functional teamwork by facilitating opportunities for collaboration.
• Empower Employees: Delegate decision-making authority and trust your team to take ownership of their work. Empower employees by providing the resources and support they need to succeed and encouraging them to take initiative. Empower employees to act like an owner in the business.
• Maintain a Strategic Vision: Keep an eye on the big picture and ensure that your team’s efforts align with the organization’s strategic goals. Help your team understand how their work contributes to the overall success of the organization.
• Focus on Outcomes: Instead of micromanaging tasks, focus on achieving outcomes and results. Set clear expectations and goals, and allow your team the freedom to determine the best way to achieve them.
• Focus on Coaching and Development: Shift from a traditional management role to a coaching role. Invest time in developing your team’s skills and competencies, and help them achieve their professional goals through continuous learning and development opportunities.

Get Ahead of Future Trends

I anticipate these business trends for a flat organization will continue in the future. There will be ongoing pressures to increase business profitability by reducing labor costs and adding automation. Businesses need to become more agile to respond to fast-shifting market changes, as do workers themselves.

One option for you is to own and run your own business. This is the ultimate flattened organization structure!

If you need to embrace autonomy anyway, consider starting and managing your own company and resources. Take advantage of AI and globalization. Serve customers more directly and have better alignment of your personal and company mission. Reap the risks and rewards more directly aligned with your individual contributions.

In any case, get mentors, coaches, advisors, teachers, and even peer communities to help you be successful in whatever path you take.

If you or others would like my help and guidance for your career, team, or business, please reach out and schedule a free consultation.

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Jimmy Wong Coach, speaker, and entrepreneur enabling people to thrive in the age of AI. Data science leader with 12 years experience at the LinkedIn company and 27 years in the industry. Visit aijimmy.com​ ​​​​​​

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