The Reversal of the Hierarchy Pyramid

The reversal of the hierarchy pyramid

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If you look at the online presence of successful companies, the slogans are the same almost everywhere: "Employees are our most valuable asset", "Happy customers through happy employees", "Best Place to work" and so on. If employees are so central, where are customers and management? The sad reality is that the customer is usually king. Next in the pecking order is the management, which knows what the customer wants and therefore instructs the employees what they have to do. The only available variance is that the management is so self-confident that it puts the customer in second place.

So aren't employees the most important asset?

Isn't customer satisfaction the result of employee satisfaction?

The answer to both questions is: Yes, it is. Todays article will describe how to give this fact the necessary organizational framework. Because the fact is: CEOs and managers do not create value, employees do.

A new self-perception of managers becomes necessary

We can agree that the value of a company lies in the work of the base. Daimler CEO Dieter Zetsche does not build cars, Didi CEO Liu Qing does not chauffeur customers and Microsoft CEO Tim Cook does not program. Even if executives are still involved in this business and, for example, achieve higher hourly rates as consultants, they do so not in their role as managers or managing directors, but as employees. Management consultants such as Stefan Merath strictly demand that this blurring of activities be reduced to a minimum, so that entrepreneurs can work at the company.

Consequently, the employees who create the value of the company should also play a more prominent role. Approaches such as Scrum already achieve this on a small scale and show how "managers" (here the Scrum Master) are no longer authorized to issue instructions, but are instead service providers to the employee. Many managers react with unease, because "supporters", "problem solvers" and "carers" are not yet sufficiently recognized as responsible and respectable roles in our society. A condition that is particularly evident in education and care.

Sensor, brain and actuator move closer together

To explain what self-organization and bottom-up intelligence are, I would like to use a small example from biology: Even if we feel and act with our hands, it is the brain that makes the decisions and determines actions. Unfortunately, this process is not always the fastest. Every driver knows how strenuous it was when you were just starting to drive and made every decision in your head. Over time, the process becomes routine and driving becomes less strenuous and safer as the mind can concentrate on more important things (dangers in traffic, not Whatsapp!). Even in a concrete emergency, a conscious decision cannot be waited for. For example, if you accidentally touch a hotplate, the body reacts faster than you have realized the pain.

You probably already suspect it: In an organization, the employees are the hands, the management is the head.

Self-organization and bottom-up intelligence means that the hands make the decisions they need to make in order not to hurt or to seize opportunities. The head thus becomes free for other activities, especially to provide as much as possible what the hands need to do their work. The information what the hands need comes from none other than the hands themselves. Clever minds like Steve Jobs have recognized this (at least theoretically).

It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.

Steve Jobs, founder and former CEO of Apple

The theory is that managers should be service providers for their employees. Applied to all levels, this is a reversal of the hierarchy pyramid: Below is the CEO, who tries to solve the problems of his board members (mostly decisions). The board members try to give their "subordinate" managers what they need (such as strategic guidelines or budget). In return, managers try to remove the obstacles for their employees: application for a railway ticket, registration for training, procurement of software and hardware.

The activities differ little from what happens in companies with a conventional structure. The difference lies in the change from a obligation to collect to a obligation to deliver. It is no longer the responsibility of employees to get what they need, but of managers to deliver what they need.

It is therefore imperative that managers are measured by the level of service they have provided to their team.

Possible technical realisation

Two things are needed to anchor this new approach in companies:

1. A communication channel and
2. Tracking as a basis for valuation

Fortunately, there are already business units that work exactly as managers should, e.g. IT support or the service center. With the ticket systems used there, problems and tasks can be recorded, forwarded to the responsible persons and then an evaluation based on the service level (satisfaction, speed, % solution p.a.) can be made.

In addition to an organizational manifestation of this mental reorientation, many other positive side effects can be exploited:

• Recurring tasks can gradually be recorded in ticket templates and automated workflows. The often naturally growing bureaucratic effort is thus constantly reduced.
• Accumulating tickets can be processed from one central location.
• Analyses of issue types provide information on necessary fields of action.
• Recurring tasks can be set as series elements.
• Emails are significantly reduced.

Consequences and side effects

Such an ideological restructuring would certainly have far-reaching consequences. Here are a few.

1. Massive success

The most prominent representative of this new management approach is the Indian CEO Vineet Nayar. With his Employees-First-Customer-Second (EFCS) program, he restructured the IT outsourcing company HCL Technologies in 2005 at a time when the company was losing market share and its differentiating features. The subsequent development speaks for itself.

In his very readable case study, Nayar describes how he initiated the change, why it was necessary to dance in front of all employees and which tools he retained even after the transformation.

2. 360° Feedback becomes necessary

If all levels are assessed on the basis of customer satisfaction (team leaders have team members as customers), then feedback from the actual customer should consequently also be included in the evaluation of the employees. The so-called 360° feedback tries exactly that.

3. Trust through transparency

The combination of service orientation and feedback culture means that employees know what's happening "at the top" and customers are sure that their concerns will be heard. The consequence is increased transparency, which is a basis for trust. How important trust is and will be in the business context, you can read in my articles about the Trust Economy or about teambuilding!

4. Decentralised forces require new management tools

The reversal of the hierarchy pyramid transfers some decision-making power from a few managers to many employees. This decentralisation of decisions bears some risks. However, to act effectively as a company, management tools such as corporate storytelling are recommended, which help the company to make its values tangible and present to employees so that they can be incorporated into decentralized decisions.