Levelling off

cpa-logo CPA MAGAZINE – Chris was a freshly minted university graduate when he was hired at an Ontario transportation engineering company in 2007. “My diploma wasn’t even back from the framers yet,” the 33-year-old jokes. “I was psyched to be hired so soon after finishing my degree and I couldn’t wait to get to work.” Unfortunately, his excitement was short-lived. Within a few months, Chris realized his progress at the company would be severely limited.


“From the outset, it was clear that the executive level was impenetrable. Everyone above middle-management had been at the company for decades. Some of them didn’t even have the education or upgraded skill sets required for their positions, but because they had been on the inside for so long, they couldn’t be touched,” he says. The younger folks in the office started referring to the senior management team as the “mafia.” Says Chris: “If the ‘mafia’ didn’t like you, good luck doing your job. You couldn’t even get required computer software installed if you annoyed the wrong person at the top.”


Alan Kearns, founder and head coach of Career Joy, a national career and leadership coaching service, implies that this is an example of hierarchy gone awry. “Smart leaders lift their employees up rather than tamp them down,” he says. “It’s not about being on the top, as many people think, but about being on the bottom, propelling the team up.” Matthias Spitzmuller, an assistant professor of organizational behaviour at the Smith School of Business at Queen’s University in Kingston, Ont., also emphasizes this. “Leaders are in place for two reasons — to create structure and provide resources, and to give the work meaning. They need to align tasks with the overall mission of the company.”


Kearns, who coaches professionals through major career leadership decisions, believes that hierarchy in the workplace is still important today and that people want to be led, but hierarchy should be more about value than seniority or even a list of achievements. “Millennials especially are unimpressed by job title,” Kearns adds. “They’re more concerned with respect and with the ability of those in senior positions to move the company forward.”




A study in Research in Organizational Behavior published in 2010 suggests that the classic hierarchy (think employees organized in a pyramid, the way Chris’s office was set up) can help organizations perform better than flatter hierarchies (a.k.a. horizontal organizations, where there are few, if any, levels of management between staff and the C-suite). But this is contingent on a number of factors, including leadership. The traditional hierarchy only pulls ahead of its flatter counterpart when the “right individuals have been selected as leaders” and those people affect the group’s motivation in positive ways. (This obviously wasn’t the case in Chris’s workplace.) “Steeper hierarchies will harm collective success when groups select leaders who are selfish, use biased decision-making processes or use an autocratic leadership style” and “when the possession of power induces leaders to be disinhibited and less sensitive to others’ needs,” the report says.


Hierarchies that are too steep can be harmful; there should be some degree of contact with those in decision-making positions in order for employees to feel valued and to feel they have a say in what happens in the workplace. Spitzmuller echoes this sentiment: “Individuals need to feel like they are contributing to the growth of the company in order to be motivated and maintain a sense of responsibility. Leaders have to work hard to manage the issue.”




This is one of the big reasons why younger employees may seem partial to horizontal structures — the visibility and the perceived availability of the C-suite. Does this mean employees at any level should start tweeting suggestions to the CEO or bypass HR protocols to be heard? Not necessarily, says Kearns.


“It’s neat to be able to reach out so easily in this day and age, but there’s still a respectful way to go about it,” Kearns says. (Just ask the intern at Marc Jacobs International, home of the well-known fashion designer, who took to Twitter to rail against former CEO Robert Duffy back in 2011. It’s probably not the best idea to call your boss a “tyrant” in any public space.) “It’s like we need a hybrid car approach to this question, to get the best of both worlds: the next generation workforce will have the ability to jump the queue and go straight to the top with their ideas and points of view, but it should understand and work within the hierarchy regardless. Just because you can doesn’t mean you should.” Kearns calls this “career and leadership literacy,” which is about reading scenarios and understanding how to communicate in the workforce. Kearns believes that an employee’s level of career literacy is directly tied to his or her professional success. Anthony Ariganello, president and CEO of the Canadian Council of Human Resources Association and the Human Resources Management Association in Vancouver, agrees: “The hierarchies are blurred more and more, but it still comes down to relationships and being respectful of influence. The rules of the workplace may have changed, but the game is the same.”


Spitzmuller agrees that an employee should be respectful about reaching out to execs, but he notes that there is a paradigm shift at hand for managers. “Not all communication to senior staff is meant to be confrontational. A positive exchange of information is a good thing, and while direct super visors may not have been taught that this is acceptable, they might need to adjust their thinking to a new generation of employees.”




Ariganello also believes that regardless of how much companies try to flatten — or in some cases, eliminate — their hierarchies, leadership is not something employees can do without. “It’s in our DNA,” says Ariganello. “People are always going to look for someone to have vision.” Case in point: in early 2014, US online shoe retailer Zappos did away with its hierarchy in favour of a “holacracy,” a way of working that is intended to promote collaboration and removes titles and managers. In 2015, the company’s personnel turnover was upward of 30%, 10 points above its usual churn rate. Why? Without a captain (or a series of captains), it’s all deckhands — no one is setting the course or reading the map. The 2014 Towers Watson Global Workforce Study reinforces this idea, reporting “trust/confidence in senior leadership” as well as “relationship with direct supervisor” as major drivers for employee retention, especially among those in the 30- to 39-year-old age group — those just starting to hit their career stride. (Relationship with the boss was also a major driver for 40- to 49-year-olds.)


People in executive positions should take note of these learnings and apply them to their management tactics. “Don’t block a direct report from escalating an idea to someone in a higher position,” says Ariganello. “It’s not personal. The employee should be courteous in his or her approach, absolutely, but you should be supportive and encourage the show of initiative. It makes you a better manager if you can be secure enough to allow this type of teamwork between levels.”


Chris is the perfect example of how this kind of leadership gets the most out of employees. Knowing he wouldn’t be able to crack the “mafia” mentality, he left the company, moving to an aerospace engineering organization with a different hierarchical mind-set. “We were rewarded for being innovative. Not only was it an expectation that we come up with ways for improving processes to be sent up the chain of command, it was a requirement. And our boss was rewarded when we succeeded, for coaching us to be engaged, enthusiastic employees.” As for the “mafia,” the company eventually folded. “I can’t believe I lasted as long as I did,” Chris says. “I would never have reached my potential if I’d stayed, but in the end, it didn’t matter anyway.”