Things You Probably Didn’t Know About Flat Organizations.

From the desk of Peter Margaritis

I recently interviewed Rod Morris on my podcast, and our discussion centered around “self-managed distributed network corporate structure, a.k.a. flat organizational corporate structure.  I was immediately intrigued by this idea and decided to learn more about it.  You can listen to our interview on February 14, 2022.  

The traditional hierarchy organizational structure has been around since the 1950s, and so have many of the strategies developed to make it work well. As time goes on, though, some of these strategies are becoming less effective, while others are simply out of date. 

What is a flat organization? A company that doesn’t operate on strict hierarchies like most traditional businesses. In these companies, decisions are made at an operational level rather than from senior executives managers in the C-Suite or regional offices with little contact with worksites employees. Everyone should be involved in developing solutions to customer problems, which means that everyone has an equal say about what customers want.

To achieve the right balance between leadership and organization, here are four things you probably didn’t know about flat organizations.

Not all companies can be flat.

Not every business model is suited to a flat structure. Businesses operating in highly regulated industries, for example, may not be able to eliminate hierarchy and authority structures that ensure compliance with rules and laws. In these situations, it’s OK to be flat-ish. But when your company isn’t in a tightly structured industry, using a flatter organization can help you become more agile and responsive while reducing hierarchy-related costs. And if moving to a flatter org seems impossible today, try making room for some small experiments. Start by delegating decisions from your boss; give employees the authority to make confident choices—without requiring permission from higher-ups first—and monitor results closely so you know whether or not those decisions are right for your business. Just because everyone in an organization has titles doesn’t mean they have power over others; they control their roles and responsibilities.

How to start implementing a flat organization

There are numerous advantages to implementing a flat organization, with notable examples from start-ups like Google. Below are tips on how to start your company down that path. In addition, there is also the advice given to companies already moving in that direction; ideas for keeping morale high and employees motivated within non-hierarchical structures. 

Many companies have tried experimenting with flatter organizational structures, but few have mastered it. Yet some organizations are very successful in doing so; they have implemented policies and protocols which have allowed them to maintain a happy employee base while still producing outstanding results – even without bosses monitoring every move or workers jockeying for promotion. Let’s take a look at some of these positive trends. The last few years have seen an increase in companies pushing towards flatter organizational structures; teams where job descriptions focus more on duties than hierarchy. That’s not to say that everyone’s title is Director of Nothing or Head of Indeterminate Anything. Managers might be reduced, and everyone has an equal say regardless of experience level or tenure at the company.

The ten elements of a flat organization

#1. No strict hierarchical layers; 

#2. Everyone is responsible for what everyone does; 

#3. Each employee’s opinion matters, regardless of rank or seniority; 

#4. Decisions are made as close to customers as possible; 

#5. One-size-fits-all isn’t a good approach. 

#6. Teams across geographies come together regularly, if not daily;

#7. Employees can take their leave whenever they want—and are encouraged to do so 

#8. Employees are encouraged to use their initiative and don’t feel micromanaged; if something needs doing, they take care of it—and are rewarded for it in some cases (e.g., bonuses)—

#9. Employees wear many hats: They might be cross-trained to step into roles occupied by colleagues when someone is out sick or on vacation; and 

#10. Collaboration and teamwork are emphasized within functional areas such as marketing or accounting and across available lines such as between engineering and sales

Rules for Successful Collaboration

We all think that we embrace the concept of collaboration, but ego and office politics kill successful collaboration. In a flat organization, these hierarchies collaboration killers rarely exist, and if they do, they are addressed immediately.      

Collaboration is one of the underlying principles in improv leadership.  To achieve a successful partnership, there must be a foundation of respect for the other party; each party is trustworthy, and each party supports the team. If any of these three foundations are missing, collaboration ceases to exist.  

Here is the superpower to improv leadership with this foundation in place – become an active listener where you are focused on the conversation all the while eliminating distractions, such as internal dialog, biases, and the need to be correct, while removing external distractions, like your smartphone for a starter.  

Finally, adopting the Yes! And philosophy where – Yes, I hear what you are saying, And did you consider… The goal is to move the conversation forward positively and collaboratively.  

Flat organizational structures are not for every organization.  However, can your organization adopt a flat-ish approach and become more nimble by distributing the power and authority to others to make decisions without your approval.  In the book, A CEO Only Does Three Things by Trey Taylor, a CEO works on the company culture, hiring the right people, paying attention to the numbers, and putting other decision-making away from the CEO and to those managers responsible for the departmental expectations.  

Psychological Safety is a Must if You Want Your Organization to Succeed

From the desk of Peter Margaritis

Have you ever been in a meeting and your boss asks you a question about your ideas on a particular subject? After you share your thoughts, your boss has that look of disgust on their face and says, “we can’t do that because this is the way we have always done this,” or “we tried that in the past, and it didn’t work,” or everyone starts laughing and someone says, “their he/she goes again while rolling their eyes.” Negativity and dismissiveness hurt! When your boss responds this way, creativity stops and suppresses the rest of the group’s creative thoughts and ideas. No one wants to be humiliated like this in front of others. 

Then it gets even better – you are in a meeting with the accounting and finance team, and they are reviewing your financial results for the last quarter.  You are afraid to ask questions or make any comments because you don’t want to look stupid.  After all, you don’t have an accounting or finance degree, so what do you know?

What is the real issue in both of these scenarios? The corporate culture does not allow you to speak your mind and ask questions without feeling insecure or embarrassed. In my 30+ years in the corporate world, I had experienced too many times when I was ridiculed because I said something that was perceived as stupid, or I should have known the answer. Is this behavior motivating, inspiring, or productive? Of course not, and yet, we’ve all experienced it at one time or another. 

The good news is, you can create a culture where all ideas have validity, where ideas are accepted and discussed; and, where questions are asked without any judgment or the fear of embarrassment. Okay, quit shaking your head and thinking that will never happen, and saying, “there he goes again with his crazy ideas and comments.” As you continue to listen to this episode, do this – keep an open mind, and don’t pass judgment until you hear me out. Deal? DEAL! 

There is one critical element in creating this new corporate culture, and that element is psychological safety. In a Harvard Business Review article titled, “High Performing Teams Need Psychological Safety And Here’s How To Create It,” the article defines psychological safety as “the belief that you won’t be punished when you make a mistake. Studies show that psychological safety allows for moderate risk-taking, speaking your mind, creativity, and sticking your neck out without the fear of having it cut off.” I know someone out there thinks that I am making this up and using HBR as a cover, but I am not. Psychological safety is a real thing. Google the term to learn more.  

In a similar article by re:work titled “The Five Keys to a Successful Google Team,” the article starts off stating that “who is on a team matters less than how the team members interact, structure the work, and view their contributions.” In other words, the way the team collaborates is more important than who is on the team.  In improv, the team is the sum of all of its parts not just the individual contributions.    

The article goes on to state that there are “five key dynamics that set successful teams apart from other teams at Google, and the number one dynamic is psychological safety.” Psychological safety is defined as “can we take risks on this team without feeling insecure or embarrassed.” The remaining four dynamics are… well now – wait a second. I have a better idea.  Google the article and read it to learn about the other four!  

So, the question becomes, how do you increase psychological safety on your team? The HBR article states that “approach conflict as a collaborator, not an adversary when conflicts come up, avoid triggering a fight-or-flight reaction by asking how could we achieve a mutually desirable outcome and be curious to hear the other person’s point of view.” 

I am no ‘brain expert’, but what I do know is that when you are harassed by your boss, or one of your coworkers with an over-developed ego, or one of the “whatever” coworkers, your brain goes into the fight-or-flight mode. In other words, we act first and think later. That has never happened to you, right? Well, when this happens at work, it debilitates our strategic thinking and kills our self-esteem. Are we now a productive member of the team or a disgruntled employee? Once again, you know the answer. 

When I read both of these articles, my mind went straight to improvisation. For those who have been following my work, you are thinking “shocker.” (just a bit of sarcasm). There is a lot to unpack here, so let’s start with “the belief that punishment will not occur when you make a mistake.” In improv, we say, “there are no mistakes, only gifts, and happy accidents.” No one is perfect, and even those who don’t suffer from a lack of certainty make mistakes. Leaders and teammates need to respect each other, trust one another, and support each other when taking risks. Remember, there are risks in everything we do. Don’t punish but praise the person for taking the risk. There is another saying in improv, “Bad ideas are bridges to good ideas. No ideas lead to nothing.” If everyone justifies everyone else’s actions, there are no mistakes.

Then there is the fear of being embarrassed and feeling insecure.  Once you put your ego out of the way, we stop judging others’ ideas – instead, we consider them brilliant and eagerly follow them! You see that great improvisers accept the ideas of the other teammates without judging them to be “good” or “bad,” always thinking, “This is now our idea.” When we do this unilaterally throughout our team and give people the freedom to speak their mind, magic will happen almost immediately. 

One of my all-time favorite improv quotes describes psychological safety by saying, “There are gems in every idea. Embrace and build. Treat every idea as though it has the potential to change the world, and at some point, one will.”

Creating a safe place for the team to share their ideas under the umbrella of psychological safety may be easier to achieve versus asking a question during a financial meeting when you don’t have the financial foundation necessary to articulate a question. To avoid being perceived as stupid, we are more inclined to nod our heads up and down and agree than ask a question.  

However, when you ask the financial question, you will more than likely receive an answer full of accounting and finance jargon, leaving you even more confused. So, what is the solution? Knowledge is the solution. Accounting and finance knowledge, to be exact.  I addressed this in S4E8; I discuss what is financial leadership. The answer is taking an accounting and finance fundamentals course powered by Color Accounting. 

In S4E8, I describe the Color Accounting process, the benefits, and provided three perinate examples.  I would highly suggest that you listen to that entire episode to learn more.  In the meantime, I have another case study to share with you, and it is entitled “We Could Save About $80K a Year.”

In early 2000’s, Mark Robilliard was facilitating a corporate workshop for team leaders and middle managers in a large multinational HQ in Sydney Australia. After becoming accounting literate using the Color Accounting System™, the final session in this particular workshop involved the participants having a quick review of their own work area and then discuss any thoughts on generating additional revenue or incurring less expenses. One of the participants (the Team Leader in the internal mail room) shyly raised their hand and nervously said “I think we could save about $80k per year if we changed how we do this process.” The CFO who just happened to be in the room almost fell off his chair and when he recovered his composure, he asked the team leader “How come you never brought this to us before?”. The answer was simple: “I just do my job – I didn’t know we should be thinking about the business too.”

What value would these type of business conversations have in any organization? Shouldn’t everyone be accounting literate and develop a ‘business owner’ type mindset?

Everyone in your organization should increase their accounting literacy because how much money would your organization save if they did their job AND thought about the business too. Novel idea, right? 

How effective are your senior managers, managers, sales team, and back-office teams around finance? Do they perform with psychological safety in your accounting and finance meetings? Do they speak their mind and ask questions without feeling insecure or embarrassed?

In conclusion, the HBR article states, “if you create a sense of psychological safety on your team starting now, you can expect to see higher engagement levels, increased motivation to tackle difficult problems, more learning and development opportunities, and better performance.” So, what are you waiting for? 

If you would like to learn more about how improvisation leadership creates a culture that fully supports psychological safety within the organization and/or more about the Color Accounting process, please contact me at peter@petermargaritis.com. 

Never a Bad Idea

From the desk of Peter Margaritis

peter-margaritis_blog_neverbadideaYears ago, a friend and I started a business called The Group Mind. We had some large cards printed with the words “Yes, and” on the outside (you can read more about that improv principle here). When you opened the card, it read:

“There are gems in every idea. Embrace and build. Treat every idea as though it has the potential to change the world and at some point, one will!”

I’ve previously addressed the notion that we need to “dump SALY” which is essentially abandoning the “same as last year” approach to business. With busy season in the not-so-distant future, perhaps it’s time to cultivate creativity in not only yourself, but your team in order to make things more efficient, productive and happier.

How? It all starts with ideas. Ideas indeed have the potential to shake the world. If you want to change things, you have to flex that creative muscle.

But how do you encourage this idea-sharing environment? Especially in a traditionally left-brained profession – how can you make sure the right brain is present? Improv. You need to employ the improv principles I’ve presented until it becomes second nature. The elements of improvisation—trust, support, respect, listen, focus, and adapt, along with “yes, and…”—when working together, will go far to enhance your ability to adapt quickly and appropriately. It’s a matter of attitude, and each day we need to strive to get those pieces in place.

When you choose to embrace and practice improv, it’ll dramatically affect your workplace environment and it will have a contagious result. However, it will take constant practice on your part – to the point where you can’t stop doing it. You will believe in yourself and your abilities, and that confidence will propel you to even greater excellence and encourage others to share and feel comfortable in contributing.

When it comes to understanding and applying improvisation, people sometimes tell me, “this is too simple, Pete.” And the thing is, I agree; it is simple. It’s supposed to be simple. The most powerful concepts are not all that difficult to grasp. You can use improvisation and “yes, and…” to encourage creativity and ideas that will go on to change the world. You can use it to inspire and include others in your workplace, your marriage and family, and all your relationships—it works at all levels.

Allow those in your life – especially your team members this busy season – to benefit from the practiced principles of improv. Consider a team exercise. Sign-up to receive my weekly challenge designed to help you and your team find creative ways to build new habits and improve the way you communicate. Let them enjoy the freedom of sharing ideas that will take your business and relationships to new heights!

Your Busy Season Sitcom

From the desk of Peter Margaritis

PeterMargaritis-Blog-BusySeasonSitcomAs you head into the busiest time of year for the accounting industry as a whole, you’re more than likely starting to think about the clients AND co-workers you’ll have to navigate in the coming months. You no doubt have some real characters you get to work with. Have you ever imagined your work life as a reality tv show? Or how about a sitcom? One that might rival Seinfeld perhaps? Well, maybe not…but it’s pretty interesting (and funny) to start thinking about who you, and all your co-workers would be if you were in Seinfeld, for instance. I wrote an article around this idea, that based on the DISC model – a personality test that focuses on four quadrants: dominance, influence, steadiness and conscientiousness – we could all be categorized into characters in a sitcom.

Why? I’ll let you in on an interesting tidbit, successful sitcoms often include a character from each of the following quadrants, because the resulting friction tends to be funny. Next time you watch a sitcom, take note of who is in what quadrant. Seinfeld is a perfect example of this, each of the main characters exemplifies one of the DiSC quadrants. So, let’s take a look and see which Seinfeld character you are.

Jerry Seinfeld: Dominance

These are the drivers among us. They are competitive, decisive, independent, determined, and results-oriented. They want control and admiration. They also tend to be domineering, impatient, and poor listeners. They dislike disorganization and wasted time. They don’t think you should bring your feelings into work. They can be hot tempered. Some see them as bullies. Some people in this category might be considered poor listeners. It’s likely because they often make a decision, and anyone else’s words are wasting precious oxygen.

Elaine: Influence

These are the cheerleader types who want to do what they love without being confused by the facts. These people are optimistic, animated, persuasive, imaginative, and enthusiastic. They are good communicators. They love having fun, being the center of attention, and receiving applause. They are dreamers. However, they may talk too much, overwhelming others with information. They have short attention spans. They don’t like being alone and they don’t like structure. At their worst, they tend to be disorganized and miss deadlines.

Kramer: Steadiness

These are the “can’t we all just get along and work together” people. They worry about whether others are okay. They are friendly, reliable, and supportive. They are patient and diplomatic. They want everyone to like them and obsess if someone doesn’t. They are very concerned about personal relationships and harmony in the workplace but tend to be overly sensitive, conformist, and lacking in time boundaries. They won’t tell you what they think; instead, they will tell you what you want to hear— which can be a dangerous trait. They don’t like to be rushed, they don’t want to be alone, and they avoid conflict when possible. At their worst, they tend to be indecisive, easily overwhelmed, and miss deadlines.

George Costanza: Conscientiousness

These are the thinkers. They want to get it right all the time, and they want to be efficient, thorough, accurate, and careful. They are disciplined and love solving problems and researching. This group tends to be very critical and picky. They don’t like disorganization or surprises. At their worst, they are rigid, argumentative, and stubborn. These are accountants, engineers, actuaries.

Now What?

Well, which sitcom character are you? When you start to understand where you fall within the quadrants, you can begin to think about how to work and respond to any cast of characters you may come across. Friction will naturally arise because these are people with opposite outlooks. Still, you must work well with all types, since every group contains people in each category. Here are a couple of tips for those who may be more dominant in other quadrants:

  • With those who are in the dominant quadrant, be direct, be specific, and offer multiple solutions. Remember, they are the decider. If you give them only one option, it’s more than likely going to fail, or it can become their idea instead of yours.
  • Those who are in the influence quadrant, be enthusiastic and positive, and avoid details. Put things in a way that they can relate to.
  • With those in the steadiness quadrant, engage in small talk, ask a lot of questions, and be informal, as if talking with a friend. Just don’t let them suck away your time and extend your workday. You need to be respectful but firm about managing the conversation. Let them know you appreciate the chatting, but it’s time to get down to business.
  • And for those of us who are in the conscientiousness quadrant (most accountants!), we need to communicate to people in the other three areas that we would like to focus on just the facts, please, so that we can get organized – and be efficient!

Having positive experiences with people from all backgrounds and perspectives starts with respect. Respect comes from having a better understanding of who people are and where they are coming from. By taking my Yes, And Challenge you can start to implement weekly communication tips which build respect with others. Just like in improv, communication goes two ways, so the better we understand others—including their pet peeves and their hot buttons, their likes and dislikes—the better we will get along and can feed off of one another.

Mary Poppins Knew Best

From the desk of Peter Margaritis

petermargaritis-blog-marypoppinsknewbestWho is going to argue with the wisdom of, “a spoonful of sugar helps the medicine go down?” Certainly not me. Think about it – I’m sure you do some form of this with your children, or dog, if you have either – in order to get them to digest something undesirable, but necessary. You add something sweet to go with it!

I am definitely in favor of taking this advice literally during the undesirable time of year that is busy season. Sweets and snacks made available during the long, endless hours of busy season can certainly go a long way, but so can something else that’s “sweet.” Humor.

Is there anything better than experiencing a really good laugh? It’s one of those sensations that lightens your mood, makes you want more. When something is funny, it feels good – it’s the sweet that can make the medicine of long hours taste a little better. So, why are so many workplaces seemly devoid of humor? The answer definitely depends on your culture and your colleagues. The point is, humor isn’t as common and present as it should be…and stress can be a big reason for that.

I get it; people are feeling tense. It’s a stressful election season, we’re in survival mode with ramped up deadlines, we’re all just trying to get through till quitting time. And let’s be honest, when you’re facing a tough deadline or enduring an impossible task, do you really want to be interrupted with some joker saying, “Hey, did you hear the one about the priest, the rabbi, and Bill Clinton walking into a bar?” Nope. Not the time, not interested. However, humor need not be a stand-up routine – it can be present in how you finish a request in an email, or a brief quip in passing to a colleague in the lunchroom. Perhaps you won’t get a belly-laugh each day at work, but you’ll be a part of lightening the mood and thereby making work more enjoyable for not only you but everyone on your team.

Here are some ideas of how to get your team on board to invite and enjoy a little humor this busy season:

  • Use the internet. Google any number of phrases “busy season laughs,” “accountant humor,” etc. to find funny accountant memes, hashtags, articles, and GIFS to enjoy throughout the season. Let us give thanks to the internet for being able to find stupid, yet funny relatable things for us to laugh about.
  • Schedule office get-togethers – even if brief (30 minutes) and in the break or lunch room. Give people a reason to take a break, interact, and enjoy something different whether it be a treat, reward, or lunch.
  • Keep a positive attitude – it can be contagious.

Busy season doesn’t last forever – but the memories (good ones!) can live on for a long time and, with just the right amount of humor and engagement, it can actually become a time of year your team doesn’t dread.

Start practicing using humor effectively every day by joining my Yes, And Challenge. Share your challenge insights on Twitter with #YesAndChallenge or The Accidental Accountant Facebook Page.