2005 – Could business thrive without hierarchy?
Imagine a company without bosses.
Impossible? I would be inclined to agree, but
Gerard Fairtlough, author of a new book called
The Three Ways of Getting Things Done, begs to
differ and, the more I listen to his arguments,
the more I believe he is on to something.
Mr Fairtlough, a biochemist,
former Shell executive and founder of Celltech,
the UK biotechnology company that was sold in
2004 to UCB, the Belgian biopharmaceutical company,
for £1.5 bn, believes that for too long
society has accepted hierarchy as the natural
order of organisations.
The pecking order, after all,
is a common feature of animal communities, but
there are instances where some animal groups -
meerkats for example – have developed interchanging
roles for the good of the colony. Even here, however,
there are alpha males and females.
Mr Fairtlough believes what he
calls our “addiction to hierarchy”
is draining the energy of collaborative projects
and sometimes failing, as a result, to either
recognise or pay due regard to the input of able
individuals whose significant contributions can
be overlooked in a formal reporting structure.
We must all know of bosses who
have taken credit for work accomplished by members
of their teams. Then there are those who brazenly
steal ideas or who, on occasion, have been prepared
to profit disproportionately from the input of
But it is not only the possibility
for such selfish behaviour that limits the effectiveness
of hierarchy, it is the focus of attention on
a few designated individuals who are expected
to make the right decisions on every occasion.
The rise and fall of so many chief executives
confirms that a state of grace for executives
simply does not exist.
The problem of hierarchy historically
is that it has bred authoritarianism, even despotism
at times, creating fear in some cases and dependence
in others. Even when a hierarchy is relatively
benign it can inhibit independent thinking by
maintaining familiar relationships, allowing some
to settle in comfort zones with few responsibilities.
“In a strictly hierarchical organisation,
the only learning that takes place is the learning
of the individual at the top. Everyone else obeys
orders. An organisation without learning will
only survive in very stable conditions,”
writes Mr Fairtlough.
“In practice, of course,
the lower ranks actually learn and adapt without
being told to do so. But hierarchies tend to learn
slowly, especially because a lot of effort goes
in to preserving the superior status of those
at the top, inevitably an anti-learning activity.”
Mr Fairtlough speculates that
a spontaneous emergence of hierarchy among groups
of people, even in pre-school children, may have
something to do with genetic predisposition. While
he argues that this should not mean that hierarchies
are inevitable, it would help to explain why they
are almost taken for granted in society.
“It won’t be easy
to change a hierarchical system but two hundred
years ago aristocratic domination was considered
inevitable and a hundred years ago so was patriarchal
rule,” he says.
“Change away from these
was strongly resisted, but it happened. It could
be that hierarchy in organisations is a further
idea whose end is nigh, driven by social, intellectual
and technological change.”
But if there is no inevitability
about hierarchy what sort of organisation could
exist in its place? Mr Fairtlough believes that
there are no more than two alternative arrangements
for getting things done. These he identifies as
“heterarchy” and “responsible
He describes heterarchy as divided,
supported or dispersed rule where control shifts
around depending on the project and the personality,
skills, experience and enthusiasm of those who
can make things happen.
Much of the project work that
is becoming common in large technology companies,
he argues, fits this kind of arrangement. W G
Gore and Associates, the US-based makers of Gore-Tex
waterproof fabric uses this system where managers
emerge not through promotion but depending on
the popularity of a project. Those who become
accepted as leaders are those who prove capable
of selling and articulating ideas and seeing a
job through from beginning to end.
Pay differentials are also based
on the success of individual projects so employees
are not going to move on a whim. “Some would
say this is a recipe for chaos. In fact it has
created a successful business that finds itself
consistently voted as one of the best places to
work,” says Mr Fairtlough.
At Hewlett-Packard a board of
senior managers acts like a peer review group
of academics holding the purse strings of project
funds. Project ideas are put to the board and,
if approved, the project champion must be capable
of gathering together well-qualified team volunteers
or the funding is withdrawn.
During my early career at the
Financial Times we ran newspaper investigations
like this where a group of reporters would grow
as a story gained a head of steam, then disperse
with some individuals re-entering at intervals.
In fact instant teams are drawn together on a
daily basis for single stories in the newspaper
But news stories must still be
co-ordinated, and sometimes a command must be
as baldly stated as “drop that and do this”.
That is rare because good journalists are capable
of prioritising their work.
This is where the third system
of responsible autonomy emerges. Mr Fairtlough
points to the kind of autonomy enjoyed by fund
managers who tend to be left to themselves if
their fund is performing well. Success attracts
a larger fund and more clients. “Autonomy
is provided by the internal policies of the investment
institution. Accountability is provided by the
performance of the fund, ” he writes.
In practice, he notes, each of
these three systems can sometimes be observed
working together. Having worked for most of my
career at a newspaper where journalists had more
of a supplier-customer relationship with editors,
I find it difficult to relate to management hierarchies
governed by reporting systems.
Some people seem to do their
best work when they sit outside hierarchies. If
this is acknowledged as it seems to be, at least
in the more creative workplaces these days, why
do the vast majority of companies retain their
management cadres where people are propelled through
command-structured careers from graduate to company
Mr Fairtlough believes that this
system is maintained partly by the excessive interest
that we all take in discussing who’s up
and who’s down rather than in whether an
organisation is working well or not. Last week,
for example, there was far more media interest
in a UK “cabinet row” than in the
outcome banning smoking in most public places.
This week the focus has been on David Blunkett,
forced to resign his cabinet post amid yet another
frenzy of gossip and accusations. In the same
way, last year’s take-over struggle for
Marks & Spencer was portrayed in the media
as a battle of egos.
Heterarchy’s battles are
those of ideas, fostering the kind of debate that
demands greater personal responsibility. “There
is a mass of evidence to suggest that, in the
twenty-first century, the time is ripe for sustainable
change in the ways organisations use to get things
done,” writes Mr Fairtlough. The result,
he believes, will be a gradual move away from
hierarchy in organisations.
I still find it difficult to
imagine business without bosses. But perhaps,
in future, they will come to know their place.
The Three ways of Getting Things Done,
Hierarchy, Heterarchy and Responsible Autonomy in Organizations,
by Gerard Fairtlough, is published by Triarchy Press, price