Hierarchy: What You Gain and What You Lose

Every hierarchy gives you something and takes something away.

It’s easy to simplify discussions of hierarchy to a binary “good” / “bad” framing. Those who say hierarchies are a good thing might say they are natural, necessary, clear and simple. Those who say they are bad might say they are oppressive, un-inclusive and outdated.

Unfortunately, the world and the contexts we work in are more nuanced than that. Hierarchies are not “absent” or “present”, they’re scalar and they are neither inherently good nor inherently bad. They’re also a structural feature of virtually all human groups. They emerge for good (and bad) reasons, and most attempts to abolish them end up recreating it in less transparent forms, so in some form they are pretty much always here, explicitly or otherwise.

So what do stronger hierarchies give us, and what do they take away? And vice versa? We’ve got a simplified list of the gains and losses below – enjoy!

The Gains: What Hierarchy Gives You

Hierarchies actually have quite a lot of well-evidenced benefits, perhaps more than it’s fashionable to acknowledge in the mid 2020’s.

Clarity of authority, decision rights and accountability: Functioning hierarchies make it really clear who decides what. This simplifies authority over demand and resource allocation, provides clear escalation points, and makes it clear who can commit resources, who resolves disputes, and who is responsible when things go wrong. Having clear, powerful decision makers also reduces the “transaction costs” groups of peers experience when they try and decide something on their own.

Furthermore, increasing the clarity of authority structures has been shown to reduce stress, increase employee satisfaction and improve performance. Things just feel simpler when we know what the escalation routes are and who really makes decisions. When we know this stuff, we have less to worry about in some ways. Someone else makes the decision, and we don’t need to worry about or spend energy on that side of things ourselves, we’re free to focus on the work itself.

Career progression pathways: Whatever one thinks of the merits of climbing ladders, most people want some sense of forward movement in their working lives. Hierarchical structures provide the most visible and widely understood framework for this. Levels, titles, and reporting structures give people a map of where they are and where they might go.

Without such hierarchical trappings people often feel their careers just drift, and thing can increase stress and reduce motivation and retention.

Coordination efficiency. When tasks are interdependent, someone has to ensure that the parts fit together, that priorities are aligned, and that the efforts of individuals add up to something coherent. Hierarchy provides this through the mechanism of supervisory authority: managers coordinate the work of those who report to them, and their managers coordinate across teams. Through this web of hierarchy, individual contributions are woven into a whole, into more than the sum or their parts. This is particularly important when work is complex.

Mentoring and development relationships. Hierarchy creates structural relationships between people at different levels of experience and capability, providing more and clearer opportunities for effective developmental relationship, and all the benefits they bring for all parties involved.

Reduced ambiguity about roles. Hierarchy reduces ambiguity about what each person is supposed to be doing. Roles are defined, boundaries are drawn, and the scope of each position is at least roughly specified. This matters because ambiguity is cognitively expensive, as well as frustrating, stressful and demotivating. Research on role stress has consistently found that role ambiguity is one of the strongest predictors of job dissatisfaction and psychological strain.

A sense of order and predictability. As humans, we love a bit of certainty and predictability and hierarchy provides these things. “Better the devil you know”, and all that.

Hierarchies tell people what to expect, who to go to for what, and how things generally work in a team or org. This is particularly valuable for newcomers, who need a map of the organisation to navigate it, and for people in stressful or uncertain roles, who benefit from having some structural stability to anchor them.

As with the point on authority, this increased certainty just frees up emotional and cognitive capacity to focus on core work.

Conflict resolution mechanisms. Hierarchy provides a mechanism for resolving disagreement (which are inevitable). The person with authority over both parties simply makes the call. This can be crude, unfair, unwise and lead to resentment, but at least it’s often fast and sufficient, and everyone can move on after it. Sometimes any decision is better than no decision.

The Losses: What Hierarchy Takes Away

Strong hierarchies also bring costs. Many of these are systemic and need to be managed.

Speed and agility. Hierarchy concentrates decision-making authority at the top, which means that decisions requiring senior approval must travel up the chain and back down again. Every layer adds delay. Every escalation adds waiting time. In stable, predictable environments, this is tolerable because the pace of change allows for it. In fast-moving environments, it can be lethal.

This is a real and pressing challenge for many orgs and one of the biggest tensions in relation to hierarchy. Hierarchy buys you coordination at the cost of speed, and in environments or contexts where speed matters, that cost can be huge. We think this tension also plays out against longer structural / strategic changes in organisations too. When the tide is rising, it’s important to move quickly and benefit from growth. When the cycle is downward, it often pays to retrench, focus on costs and simplify, etc.

Innovation and creativity. New ideas by definition challenge a norm or existing way of doing things. As such, new ideas can be somewhat threatening for people who have prospered under the “old” way of doing things. Or these new ideas may be dismissed by the cognitive biases of people who prospered under the old way, and who may subconsciously want to protect the system that has served them so well . Strong hierarchies tend to have more of the folks in power who prospered under the old ways, so they can (unintentionally) inhibit the flourishing of new ideas.

This has been played out in research which has show that hierarchical structures reliably suppress divergent thinking and reduce the range of ideas that reach decision-makers. This is a bit sad because many organisations claim to want innovation, but actually have in-built structures that systematically prevent it.

Employee autonomy and ownership. Self-determination theory, as articulated by Deci and Ryan (2000), identifies autonomy as one of three basic psychological needs (alongside competence and relatedness) whose satisfaction is essential for high-quality motivation, wellbeing, and performance. Hierarchy, by its nature, constrains autonomy.

The more layers of oversight, the less freedom individuals have to determine how they do their work, when they do it, and what approach they take. The cost is not merely motivational. It is developmental. People who are consistently told what to do, how to do it, and when to do it do not develop the judgement, initiative, or ownership that organisations also claim to want. They become executors rather than thinkers, and then organisations wonder why nobody shows initiative. The hierarchy trained it out of them.

Authentic communication. In any hierarchy, information must travel vertically. At every level through which it passes, it is filtered, summarised, interpreted, and sanitised. Bad news gets softened. Complexity gets reduced. Inconvenient details get lost. By the time information reaches the senior team, it may bear only a passing resemblance to reality.

And the same happens in the other direction. A “passing comment” by a CEO becomes a “nice to have” for the CFO, becomes an “important goal” for a divisional director, becomes an “pressing issue” for a senior manager, becomes a “high priority deliverable” for a manager and, before you know it, a team is working hard through the weekend to deliver it.

This deterioration is communication integrity is really dangerous because it can erode the quality of everything else an org does.

Ultimately, it’s been shown that the people with the most authority to act in organisation often have the least accurate picture of what is actually happening, which is a structural dysfunction of the first order. You cannot make good decisions with bad information, and hierarchy reliably degrades the information on which decisions are based.

Psychological safety. Edmondson’s (1999) research on psychological safety demonstrated that the shared belief that a team is safe for interpersonal risk-taking is powerfully predictive of learning behaviour, error reporting, and performance. Hierarchy creates structural conditions that make psychological safety harder to establish. When there is a significant power differential between people in a conversation, the person with less power is less likely to speak candidly, less likely to challenge, and more likely to self-censor.

Hierarchical differences reliably suppress voice, information sharing, and constructive dissent, even when speaking up would benefit the group and even if the people involved are all good folks. Hierarchy doesn’t merely organise authority, it also shapes relationships, power dynamics and psychology.

Diversity of input into decisions. Closely related to the suppression of voice, hierarchy narrows the range of perspectives that inform decisions. In a steep hierarchy, decisions are made by a small number of people at the top, whose backgrounds, experiences, and cognitive styles tend to converge through the selection effects of promotion. The perspectives of front-line workers, junior staff, and people in non-dominant demographic groups are systematically underrepresented, not because those perspectives are unavailable but because the structure does not surface them effectively.

Adaptability to change. Hierarchies, once established, develop vested interests in their own continuation. Positions, reporting lines, and authority structures become embedded in people’s identities, their compensation, and their career expectations. Changing the hierarchy means threatening all of these, which generates resistance that is both politically powerful and psychologically understandable. The result is that hierarchical organisations tend to be structurally conservative: they adapt slowly, reorganise reluctantly, and cling to existing structures long past the point at which those structures serve the organisation’s needs.

Interestingly, this might be part of the reason that many organisations have difficulty challenging their own hierarchical structures. Oh the irony.

Hierarchy isn’t binary: How a Hierarchy Is Implemented

As we said at the start, hierarchies are not binary things, they’re really scalar. And they’re scalar across a range of dimensions. Whether a hierarchy is good or bad for an org is shaped by the factors we just discussed above, as well as by how it’s implemented across these dimensions.

Some of the dimensions and variables to consider in relation to how hierarchies are implemented are below.

Steep versus flat (spans and layers). A steep hierarchy, with many layers between the front line and the top, amplifies nearly all the losses we have described. Information is filtered through more levels. Decisions take longer. Autonomy is more constrained. Communication becomes more distorted.

A flatter hierarchy, with fewer levels, preserves many of the gains (clarity, accountability, coordination) while reducing the severity of the losses.

Of course, employee numbers and org scales come into play here as well. How many people can one manager really effectively manage? This can also lead into the rabbit hole of what is the actual role of a manager as well, but that’s not for this post.

Rigid versus flexible. A rigid hierarchy, in which authority is fixed, roles are tightly defined, and the chain of command is sacrosanct, maximises the gains of clarity and predictability but at a severe cost to adaptability, innovation, and the effective use of expertise.

A flexible hierarchy, in which authority can shift depending on the task, where people can lead in their area of expertise regardless of their formal level, and where structures can be reconfigured as needs change, retains the benefits of having a default structure while creating space for the kind of dynamic coordination that complex work requires.

The distinction matters because much of the criticism directed at hierarchy is really criticism of rigid hierarchy, and much of what makes hierarchy functional is preserved in more flexible forms. Then again, there are also social and organisational costs and risk associated with flexibility within a hierarchy too.

Command-and-control versus supportive. This is the dimension that probably matters most. It’s primarily about the behaviour of the people who occupy hierarchical positions rather than the structure itself. A command-and-control hierarchy, in which managers direct, monitor, and evaluate, and in which information and authority flow strictly downward, produces the worst versions of every loss detailed above: stifled innovation, crushed autonomy, distorted communication, and the erosion of both psychological safety and intrinsic motivation.

A supportive hierarchy, in which managers see their role as enabling, coaching, and removing obstacles, and in which authority is exercised to create the conditions for others to succeed rather than to control their behaviour, preserves the structural gains while substantially mitigating the losses. The research on this is consistent and clear. Structure sets the stage and the behaviour of the people in authority determines how everything plays out.

As with the last point – this also comes back to what the role of managers and leaders really is, and what behaviours get rewarded and reinforced.

So what’s the advice then?

There really are pros and cons of hierarchies, and trade-offs, but the way hierarchies are implemented can exacerbate or mitigate these impact. Some of the things we think should be considered by orgs, are as follow:

Minimise / optimise the number of levels. Every unnecessary layer amplifies the losses without strengthening the gains. Try and have as few levels as possible, give the size of the org and the complexity of the tasks being performed. And, of course, make sure your managers have the time to manage their team sizes in appropriate ways.

Push authority downward. Decisions should be made as close to the relevant information as possible, which usually means as close to the work as possible. The role of higher levels should be to set direction, allocate resources, and create the conditions for good decision-making, not to make every decision themselves.

Invest in the behaviour of managers. This is, in our view, the single highest-leverage intervention available. The difference between a hierarchy that works and one that does not is less about the structure than about the people who occupy positions of authority within it.

Managers who share information generously, who invite challenge rather than punishing it, who respond to mistakes with curiosity rather than blame, who coach rather than direct, and who use their position to enable rather than control will mitigate most of the losses we have described. Managers who hoard information, suppress dissent, micromanage, and use hierarchy as a mechanism for personal power will amplify every loss to its maximum.

Selecting, developing, and holding accountable the people who occupy hierarchical positions is the most important thing an organisation can do to make its hierarchy functional.

Design for information flow. Given that information distortion is one of hierarchy’s most dangerous dysfunctions, build in mechanisms to counteract it. Skip-level meetings allow information to bypass the filtering layer. Direct access channels let front-line people surface critical information without it being sanitised on the way up. Anonymous reporting mechanisms provide a safety valve for information that is too politically dangerous to deliver through normal channels. And, most importantly, create a culture in which delivering bad news is safe. The leader who punishes the messenger will receive only good news, and only good news is a reliable signal that the information system has failed.

Create legitimate hierarchy. Research on procedural justice consistently shows that people accept hierarchical decisions they disagree with when they believe the process was fair, their voice was heard, and the decision-maker was acting in good faith. Hierarchy that is transparent about its rationale, accountable for its outcomes, and responsive to feedback is experienced as legitimate. Hierarchy that is opaque, self-serving, and indifferent to those it governs is experienced as oppressive, regardless of its technical efficiency. Legitimacy is not a structural property. It is a relational one, built through consistent behaviour over time, and it is the single most important factor in determining whether the people within a hierarchy will offer their full capability or their mere compliance.

Build in flexibility. Allow authority to shift depending on the task and the expertise required. Create mechanisms for people at any level to contribute ideas and perspectives to decisions that affect them. Treat the hierarchy as a default structure that can be temporarily reconfigured when the situation demands it, rather than as a permanent and inviolable set of reporting lines.

Protect psychological safety explicitly. Because hierarchy makes psychological safety harder to establish, it must be actively and deliberately cultivated. This means leaders at every level modelling the behaviours that signal safety: admitting their own mistakes, responding to challenge with interest rather than defensiveness, thanking people who raise problems rather than shooting the messenger, and being visibly consistent about these behaviours over time. Edmondson’s (1999) research is clear: psychological safety is not a personality trait or a cultural accident. It is a condition created primarily by the behaviour of those with the most hierarchical power.

Learning More

To go deeper, explore these resources on people-shift.com:

• Power Distance
• Self Managed Teams
• Organisational Design
• French and Raven’s Forms of Power
• Psychological Safety: An Introduction

The People Shift View

So what do we actually think about hierarchy? To be honest, we don’t really have a strong view. There are different horses for different courses, and so it is with hierarchy. For some types of orgs in some contests it’s pretty good (essential even), for some less so (harmful even).

I guess we could put it this way. We’d much rather work in a strong hierarchy with great, human-focused, emotionally mature and balanced people than in a low hierarchy org without those people. Given this, we think it’s probably best to understand your leaders and managers as a starting point and invest in them before you mess too much with your formal hierarchies, if your motivations are engagement and performance and so on.

Also – we say it fairly often: “knowing isn’t half the battle”. Doing stuff is what actually changes the dial. So what should people do with this info? We’ll, we think using tools like this for some diagnosis is a good thing to do. You could quickly ask some Q’s or knock up some surveys to help learn how your team or org are experiencing hierarchy, and then go from there.

The last thing we’d say is that there are no simple answers in relation to this. Try and avoid thinking there is a simple answer, or being pushed towards one. And perhaps try and avoid changing things just for the sake of some change.