Hierarchy is simply too expensive

Hierarchy is simply too expensive

…… or how to maintain the overhead costs



In a hierarchy, every employee tends to rise to his level of incompetence-Laurence .J. Peter

There are many hopeful signs in the Netherlands illustrating social media accelerate many positive developments in the businesss domain.  Social media create new view points, multiple ways to look at challenges, new business models and ‘New Combinations’. This applies e.g.  to health care institutions, to corporate life, to management and leadership as well.  Social media also foster small business and the ‘who’s my PAL’ way of working, referring to your ability to pool, ally and link, your ability to cooperate just being the core competence needed.

Just have a close look at many integer initiatives, books and issues around leadership which  are arising on the agendas of today’s business life.

What happens? Top-down  development turns more into bottom up (blogs and wiki’s) self-scheduling, self-management  end self-organization. Crowdfunding and crowdsourcing, as a form of self organization and self-assembled teaming,  have still a way to go but the seed is planted. The decision to cooperate becomes less a spread sheet result and more a personal decision of those involved. The focus is more and more on the neighbourhood, nearonomics: keep it near,  thereby re- discovering them.

Business Life puts integrity on the business agenda : from rule based to principle based decision making. All these movements indicate  the trends “no grow without roots” and “humanization of a collaboration”. “From survival of the fittest to survival of the most cooperative”.

The shift  goes from  regulation and organization through fragmentation (‘scientific management’), making management necessary as coordinator, towards  ‘defragmentation’ through collaborative communities. From control to collaborate. From control excellence to communicational excellence. In fact, there is no alternative for this shift. It’s inavoidable and we  know it. Why? Hierarchy as a means to establish cooperation and coordination is just too expensive in many cases. Internet is 50 to 70 % cheaper to do the same job.

There is another reason to focus on humanization of work as well. We can’t simply permit ourselves to link  human beings solely to their  job descriptions and making them ‘nuts and bolds’ in the rigid corporate hierarchical mechanics as this robs companies of their most valuable contribution to prosperity. That’s not business wise. Moreover, being treated  ‘just a job title’ doesn’t bring much satisfaction for the employee and it probably robs him from a meaningful perspective. No wonder, nobody wants  to be threaten as a French frites in a huge cutter.

We have to take the stap from lean&mean to lean&meaningful. The good news is this is about to happen! Defragmentation can save up to 30-40 percent and halve absenteeism, and, on the top of that, it delivers a substantial increase of  the customer satisfaction. Hierarchy is not not only not necessary anymore in many cases as coordinating tool. It’s far too expensive as well. Internet does the job much better, quicker and cheaper.

Customers don’t want to pay for rubbish anymore. A quick start to maintain the costs is: customers in – overhead out….. I envision that it becomes an unavoidable process in this Western part of the world.



About an analogous Life in a Digital World, Rotterdam 2005



  1. see here August 2, 2013 4:44 am  Reply

    Having read this I believed it was rather enlightening. I appreciate you spending some time and energy to put this short article together. I once again find myself personally spending a lot of time both reading and posting comments. But so what, it was still worthwhile.

  2. Jurjen October 7, 2013 7:22 pm  Reply

    Today I received an extract from the new book by Gary Hamel, called What Matters Now. In this chapter I received I see a lot of things which Frans already mentioned, even in this blog but in more (and even older) blogs as well. Just writing down this reply to leave Frans some credits and to say thx for all the inspiration. The good thing is that your message actually sticks to my mind; that’s why I had an ‘A-HA!’ erlebniss when reading the Gary Hamel chapter. Chapeau Frans!

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