Why Teams Still Need Leaders

When people collaborate remotely, hierarchy keeps them moving in the same direction — but leaders can flex to promote autonomy and creativity.

In recent years, agile and flat working structures have gained favor at many companies and struck a responsive chord with employees who are put off by stifling hierarchies. But doing away with hierarchy can cause confusion, spark complaints from employees, and hasten departures, says Lindred (Lindy) Greer, associate professor of management and organizations at the University of Michigan’s Ross School of Business and faculty director at its Sanger Leadership Center. While agreeing that rigid forms of hierarchy can impede innovation, she has found that it can provide many important benefits when managed well.

Greer first became interested in team structures more than a decade ago while investigating diversity, hoping to understand how gender and race play out in social interactions. She found that team members tended to be less focused on their colleagues’ gender and ethnicity than on the power they wielded. She then decided to explore how hierarchies work in organizations and what happens when they go wrong. She has written a number of groundbreaking articles on hierarchy, status, and the social dynamics of teams, including, most recently, “Why and When Hierarchy Impacts Team Effectiveness” in the Journal of Applied Psychology.1

MIT Sloan Management Review correspondent Frieda Klotz spoke to Greer as she was about to travel to Seattle to coteach a course on leadership development with an orchestra conductor at a business incubator. What follows is an edited version of their conversation.

MIT Sloan Management Review: A few years ago, many management experts and business leaders were saying that hierarchy had had its day and that the future belonged to flat organizations. What’s happening? Is the pendulum swinging back?

Greer: Hierarchy is probably the most common form of organizing the workplace. There aren’t a lot of good alternatives to it, and companies need some say in managing workers, particularly as they scale. However, there are also a lot of downsides to hierarchy, and over the last decade my collaborators and I have documented the many ways in which it can go wrong. Team members squabble over resources, engage in power struggles, and battle over rank. All of this harms performance.

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