INDUSTRIAL REVOLUTION “HANGOVERS” PART I: CORPORATE HIERARCHY

It’s said that in 1823, a group of students at the Rugby School in Warwickshire, England were in the middle of a football (soccer) game when a boy named William Webb Ellis decided to just pick up the ball and run with it. Nobody stopped him. In fact, students thought this was a brilliant innovation for the game, so it became the standard — and behold — the sport of rugby was born. In fact, the Rugby World Cup trophy is still named in honor of Ellis!

At the same time, the first Industrial Revolution was in full swing as the first North American railroad, the Baltimore & Ohio, was chartered in 1827. The ability to transport people and products large distances was a massive innovation for industry, but it also innovated the structure of work itself.

We often see companies with rules and structures in place which are adamantly followed, but no one stops to ask where they come from. These become so codified it’s assumed they are just the “right” way to do things, whether they add value or not. Many of the lingering work practices are “hangovers” from the Industrial Revolution and while they were effective in the beginning, they’re turning into a headache with the current direction of work culture.

In this series of blogs, we’re going to take a hard look at where some of these practices come from in the hopes it will allow us to “sober up” a bit and find a better way forward. By understanding where they come from, we can find new ways to pick up the ball and run with it and re-write the rules of the game — starting with corporate hierarchy.

FLATTENING THE HIERARCHY

Over the past couple centuries, hierarchical structures have been normalized across workplaces — large and small, profit and nonprofit. But the idea of having an executive team, department directors, middle management, and then lower-level workers came straight from the railroad system.

Because of the geographical distance between the railroad’s headquarters and the customer, they needed management structures in between. There had to be station managers, loading crews, ticket agents, and so on. At the time, this was the most efficient way to ensure the customer’s needs were met by giving them a local person to interact with, but it also meant expectations and best practices needed to be codified for quality and consistency.

This was a huge innovation in business structure — and it both worked well and created jobs. Not a bad thing! Over time, more and more businesses adopted these practices because the thought was, “If it works for the railroads, it’ll work for us.” And so, the corporate hierarchy transferred from the railroads to other industries, becoming the written rule for workplace structure.

Now think about this in contrast to pre-Industrial Revolution when we had a more agrarian society. Often, you were your own boss — whether you were a farmer, a carpenter, a blacksmith, a doctor — very few jobs had someone “above” you. And even those that did, such as an educator, usually had only one level of oversight where you could directly interact with the decision maker, not multiple layers.

When Bill Gore founded his company Gore & Associates in 1958, he believed hierarchical structures did more damage than good. To this day, the company has only two “layers” — the CEO and all the associates. Likewise, a rugby team has two layers — the coach and the players. Even when there are assistant coaches, players still have direct access to the head coach.

There are major cultural advantages for flattening the hierarchy. By ditching the corporate ladder, the workplace becomes more equitable, and it increases the sense of ownership among employees. But it also makes work more efficient by solving problems closer to where the problem is happening instead of getting stuck in the “chain of command.”

This directly ties in with the concept we’ll explore in Part II — command and control management. But first, ask yourself, “Which layers of our work structure slow things down? How can flattening the hierarchy make us more agile and productive?”