1. ERIC L.BARRDOisGcuAssant

2. Limitations of a pyramidal structurePyramidal structures were originally designed tomanage poorly educated; ill-informed people whoneeded supervisors to tell them what to do and howto do it. But these days, high levels of education andaccess to information mean that such structuresoften negatively affect peoples behavior andmotivation and consequently organizationalperformance. The worst limitations of the traditionalpyramidal structure are: 3. Vertical career progressionTending to be the only model for professionaldevelopment, climbing the hierarchical ladderfrequently becomes a system in itself. People maychoose a particular career path simply to enter top-levelmanagement, even if it does not match theirprofile or skill set. 4. Command communicationA top-down command mode, where orders are swiftlyexecuted without being questioned, has long been accepted as themost efficient way to produce results. But by not discussing theexpected results, alignment is achieved between the superiorsexpectations and the action instead of between the action and theexpected results. This communication style also assumes thatpeople at lower ranks cannot contribute to strategies andobjectives. 5. Company experienceWhile experience is obviously valuable, length ofexperience and seniority have often been confused. The cost ofpromoting people into leadership roles mainly because theyhave been with the company for years has becomeunaffordable today. In addition, these days experience (likeknowledge) can rapidly become obsolete and a killer ofcreativity and initiative. 6. Internal competitionThe traditional managerial principle puts employees ina competing mode, which can restrict and even discourageknowledge sharing and cooperation. This can be costly with awell-educated, informed workforce: by not bringing together itspeoples knowledge and insight, the company misses out onefficiency and result orientation. 7. Silo thinkingThe traditional managerial role of centralizinginformation and being the sole point of communication betweenthe team and top management is still embedded in thementality of many managers today. This, together withreporting lines to one superior and the tendency of internalcompetition to create strong allegiance to the superior,automatically creates silos. 8. Obedience orientationWith the quality of task execution defined by thesuperior, it is more important to be obedient and conform to thesuperiors expectations than to display initiative andconcentrate on results. These days it is a sheer waste not toraise the level of initiative and optimize all the skills andinsights available in a well-educated workforce. 9. Delegation of tasks rather thanauthority and responsibilityTraditionally, the manager retains decision-makingauthority and is often the correcting manager as well as theonly judge of performance quality. But in trying to maintain theirsuperiority, most managers tend to stifle others self-confidence,leading to lower motivation and efficiency. 10. Building on human potentialThese limitations block four key factors thatmodern organizations need from their people in orderto take full advantage of their knowledge and skills and thus ensure long-term profitability and sustainablecompany development. These are: 11. Building on human potentialAlignment a clear sense of the expectedresults and company values, with everyone convincedand engagedInsight the process of transformingexperience into action 12. Building on human potentialCooperation the genuine sharing of insightsand knowledgeInitiative improved efficiency throughmotivated, self-confident employeesWhen these four factors come together, silos and the silo mentality disappear. Thisalone is worth the effort and will unlock additional efficiency and effectiveness. There is alsoimproved alignment with results exactly what companies wish to achieve. 13. New management structures neededThe question is: how can companies break outof the pyramid structure and achieve alignment, insight,cooperation, and initiative? We believe the answer isthrough flatter, more flexible structures wheremanagers are more like hubs that connect people andcombine skills, managing through a network rather thana traditional hierarchy. 14. New management structures neededHigh-quality processes are needed for decisionmaking and debate, as are new ways of assessingpeople to give priority to insight over experience.Barriers to cooperation must be eliminated, andworking climates must foster self-confidence andprovide breathing space to encourage initiative. 15. New management structures neededImplementing flat and flexible structures An in-depth examination of corporate structureand functions was undertaken, and the number ofhierarchical levels was reduced. 16. New management structures neededInspiring managementPrograms were implemented to improve theleadership skills of managers, starting at the top level,as well as to reverse their role from passive judge tocommitted developer, and so make them responsiblefor the development of their people. 17. New management structures neededLong-term developmentWith fewer hierarchical levels, fewer promotionlevels are now available. Interregional and interfunctionalmoves were therefore enhanced to stimulate bothpersonal development and organizational learning, andnew roles were created that cut across traditional careerpaths. A talent pool was also developed in line with thecompanys development needs. 18. New management structures neededDynamic compensationAlso in response to the flattened structure,horizontal remuneration models were developed thatallowed increased remuneration even without promotion. 19. New management structures neededLifelong learningAlways held a strong belief in the need forcontinuous learning, both through internal and externalprograms.SOURCE :IMD - www.imd.ch BREAKING OUT OF THE PYRAMIDPage 5/6