You Flattened the Organization. Now Who Will Lead It?

Flattening an organization can improve efficiency, but eliminating management layers may also remove the experiences future leaders need. Here’s how to protect your leadership pipeline during organizational delayering.

Flattening organizations is having a moment.

Uber recently announced changes designed to make the company simpler and faster, including reducing the number of management layers and cutting nearly in half the number of small teams where managers have only one or two direct reports.

It’s easy to understand the appeal:

• Fewer management layers
• Faster decision-making
• Less bureaucracy
• Lower operating costs

I’m not going to argue that Uber should have kept those positions. I haven’t seen its org chart, and neither have most people commenting on the decision. Some of those layers may well have needed to go.

But Uber’s announcement raises a bigger question for every company pursuing organizational delayering:

If you eliminate entry-level management opportunities, where will your future leaders learn to lead?

What Is Organizational Delayering?

Organizational delayering is the process of removing management levels from a company’s structure to simplify decision-making, reduce bureaucracy and improve efficiency.

Flattening the organizational structure can be a smart business decision. It can shorten communication paths, clarify accountability and reduce unnecessary overhead.

But delayering also changes how people develop.

When companies remove management layers, they may eliminate the first opportunities employees have to practice delegation, feedback, decision-making, conflict management and accountability.

That creates a leadership development risk.

The organization may become flatter today while weakening its leadership pipeline for tomorrow.

Why Do Small Management Jobs Matter?

A manager with one or two direct reports may not look terribly efficient on a spreadsheet.

From a leadership development perspective, that role can be incredibly valuable.

It’s an apprenticeship.

It’s often the first time a strong individual contributor discovers that being great at the work and being great at leading people who do the work are entirely different skills.

Suddenly, success depends on someone else.

You have to delegate when you know you could do the work faster yourself.

You have to give difficult feedback.

You have to deal with an employee who is talented but unreliable.

You have to motivate someone whose ambitions are different from yours.

You have to make decisions with incomplete information.

And sometimes you get it wrong.

Better to make some of those mistakes while managing two people than 200.

These early management experiences help emerging leaders build judgment, adaptability and business acumen. They also reveal whether someone actually wants to lead people—or simply wants a more senior title.

What Does Delayering Remove Besides Cost?

This is where the conversation about organizational efficiency gets too narrow.

A management position has a cost. It may also have developmental value.

That doesn’t mean you preserve unnecessary jobs in the name of leadership development.

It means you understand what you’re removing.

If a company eliminates a layer of management, broadens spans of control and consolidates small teams, it may absolutely become more efficient.

But what happens to the employee who would previously have received that first management assignment?

Perhaps they remain an individual contributor for several more years. Then a larger management position opens, and the organization decides they aren’t ready.

Of course they aren’t.

Nobody gave them anywhere to practice.

This is one of the hidden risks of flattening the organizational structure: companies may remove the very experiences that create leadership bench strength.

The result is a familiar pattern:

1. The organization eliminates smaller management roles.
2. Emerging leaders remain individual contributors.
3. A larger leadership position becomes available.
4. The organization discovers that no internal candidate is ready.
5. The company hires externally or promotes someone without sufficient preparation.

The organization may save money in the short term while increasing succession expenses and risk over time.

Does Leadership Development Require Management Layers?

No.

And this may be the real opportunity hidden inside delayering.

Organizations don’t need to keep unnecessary management positions simply to develop people.

But if you’re going to remove the old apprenticeship, you’d better build a new one.

Emerging leaders can develop without formal management authority when they receive meaningful opportunities to lead, influence and make decisions.

For example, you can:

• Give emerging leaders responsibility for cross-functional initiatives.
• Put them in charge of important client relationships.
• Let them lead project teams before they have formal authority.
• Give them ownership of decisions with real consequences.
• Expose them to senior executives earlier.
• Ask them to present recommendations to decision-makers.
• Assign them to solve complex problems that cross departmental boundaries.
• Pair high-potential leaders with experienced coaches who will challenge their thinking.
• Give them increasingly difficult assignments before you desperately need them to be ready for a bigger job.

These experiences help people develop the capabilities they need to lead, including:

• Delegation
• Communication
• Influence
• Conflict management
• Strategic thinking
• Decision-making
• Accountability
• Adaptability
• Business judgment

Leadership development requires friction.

People need opportunities to make decisions, influence others, handle conflict, exercise judgment and live with the consequences.

Remove those experiences, and no leadership program will fully compensate.

A workshop can introduce a leadership concept. It cannot replace the experience of making a difficult decision with incomplete information and then being accountable for the outcome.

How Can Companies Build a Leadership Pipeline After Delayering?

Companies that flatten their organizational structure need to redesign leadership development at the same time.

Start by identifying the leadership experiences that will disappear when management layers are removed.

Then create alternative assignments that provide comparable opportunities to practice leadership.

A practical approach includes five steps.

1. Identify the experiences your future leaders need

Define what emerging leaders must be able to do before they take on larger roles.

This may include:

• Leading through ambiguity
• Managing competing priorities
• Influencing without authority
• Giving and receiving difficult feedback
• Making decisions under pressure
• Building relationships across functions
• Connecting daily work to business strategy
• Taking responsibility for measurable outcomes

2. Map those experiences to real business work

Leadership development should not be separate from the work of the organization.

Use strategic projects, customer initiatives, process improvements, product launches and cross-functional challenges as development opportunities.

The assignment should matter to the business. Otherwise, emerging leaders may practice leadership in situations that lack meaningful consequences.

3. Give people authority appropriate to the assignment

Emerging leaders do not need complete control to develop leadership capability.

They do need enough authority to make decisions, set direction, influence others and be accountable for results.

Be clear about what they own, what they can decide and when they need to involve a senior leader.

4. Provide coaching and feedback during the assignment

Do not wait until the project ends to discuss what happened.

Give emerging leaders regular opportunities to reflect on their decisions, relationships and results.

Ask questions such as:

• What decision was most difficult?
• Who did you need to influence?
• What did you assume that turned out to be wrong?
• Where did you avoid a necessary conversation?
• What would you do differently next time?

5. Evaluate readiness before a larger role opens

Leadership readiness should not be assessed for the first time when a critical position becomes available.

Use development assignments to gather evidence about how people lead, learn and respond to pressure.

That gives the organization a more realistic view of its leadership bench and gives emerging leaders time to close gaps before promotion decisions are urgent.

Are You Developing Leaders or Hoping to Hire Them Later?

Every organization has essentially two ways to fill its leadership pipeline:

Grow leaders.

Or buy them.

Buying can work beautifully when you need capabilities that don’t exist internally.

But relying on the external market as your leadership development strategy is a different matter.

You’re assuming someone else will spend years developing the person you’ll eventually hire.

And if enough companies make the same calculation, experienced leaders become scarcer and more expensive.

Your competitor’s leadership bench becomes your succession plan.

That’s not much of a strategy.

Developing leaders internally also has advantages beyond cost.

Internal candidates already understand the organization’s customers, culture, systems and history. They may have relationships that help them lead effectively from the start.

Internal development is not automatically better. Promoting someone before they are ready can create its own problems.

But the answer is not to abandon internal leadership development. It is to make it more deliberate.

What Should You Do Before Flattening the Next Layer?

Before you eliminate the next layer, ask a few practical questions:

• Which leadership experiences will disappear?
• Who currently gets a first opportunity to manage, influence or make decisions?
• What will replace those experiences?
• Which emerging leaders need broader assignments now?
• What capabilities will future leaders need?
• How will you know whether they’re ready for more responsibility?
• Are your senior leaders prepared to coach them through the inevitable mistakes?
• What is your plan for first-time manager development?
• How will delayering affect succession planning?
• Where will employees practice leadership without formal authority?

The answers may lead you to flatten the organization anyway.

They may also reveal that you’re removing more than bureaucracy.

You may be removing the very experiences your future leaders need.

You can change an org chart in a quarter.

Building the judgment and experience your future leaders will need takes years.

How Strong Is Your Leadership Bench?

Leadership bench strength is the depth and readiness of the internal candidates who could assume important leadership roles.

A strong leadership bench does not mean you have a perfect replacement for every executive today.

It means you understand:

• Which emerging leaders are ready now
• Which leaders could be ready within one to two years
• What experiences or capabilities each person still needs
• Which critical roles have no viable internal successor
• What actions will strengthen the pipeline

If you’re delayering, reorganizing or simply questioning whether your next generation of leaders will be ready when you need them, this is the time to find out.

Not when a critical leadership position suddenly opens.

I help CEOs build the leaders their organizations will depend on next.

If you’re looking at your bench and aren’t entirely confident about who is ready for what’s next, let’s talk.

Best,

Roberta