Could Hierarchy Die Out as Millennials Become the Primary Part of the Workforce?

How companies deal with their knowledge and empower their teams will be a pivot point for American business in the future.

One of the more interesting things going on in the organizational development space right now can be seen in Zappos’ corporate culture. It’s the idea of holacracy, or a distributed authority system, that basically gets rid of the traditional manager or boss idea. A lot of people over 35 right now would look at that and think it’s a ridiculous millennial idea that will never truly catch on; after all, it’s a fact of life that everyone must have a boss, no?

Zappos is often considered a pretty forward-thinking company, especially in terms of employee engagement, but here comes the big question: As people born between 1982 and 1992 (vaguely the time period for millennials, which no one can really agree upon) begin to dominate the workforce, do styles of management need to change? Will millennials essentially destroy the idea of hierarchy?

Why Traditional Power Structures Endure

Here’s a new paper from a Stanford business school professor (Jeffrey Pfeffer) called “You’re Still The Same: Why Theories Of Power Hold Over Time And Across Contexts.” The paper is better summarized here, including this snapshot:

Why do traditional power structures have such staying power? One reason is that hierarchies still work. Pfeffer writes that “relationships with bosses still matter for people’s job tenure and opportunities, as do networking skills.” He notes that research shows hierarchies also deliver practical and psychological value, in part by fulfilling deep-seated needs for order and security. Another is that individuals who believe in their own competence and above-average qualities are more likely to take action at work, says Pfeffer. Taking action on the job provides opportunities for success, and success means advancement at the company — including more power and control over others — perpetuating a hierarchical structure.

The hierarchical organizational structure is also rooted in workers’ need to bask in reflected glory and be with the winners. That desire, Pfeffer says, may help explain why people will not only work within the constraints of a traditional power structure but also voluntarily work for difficult bosses. “It may come from the drive to have one’s genetic material survive, which requires being able to first discern and then associate oneself with the individuals and groups most likely to win in fights for survival,” he writes. And power and winning create a self-reinforcing dynamic. Talented people associate themselves with success and attract other talented people to their side, making continued power and success more likely.

This is all interesting to think about, and it has some relevance to what we do every day at Devada. First, you need to think about your own feelings around hierarchy. It can obviously be comforting in some ways — think of a conference call where a random question is asked and it’s not clear who it’s asked to, and there’s almost always 10 seconds of silence on the line — but it’s often been argued that it limits creativity and information flow because those near the top of a hierarchy tend to control said information. (We’ve talked about this before, too.)

So What Will Happen to Hierarchy?

Now consider this: when the baby boomer generation retires, some have argued that will be the single-biggest knowledge loss in American economic history. That can be a major cost to business if not handled properly. So despite Pfeffer’s argument that hierarchy won’t die out, you could potentially see a work climate emerging where (a) knowledge is being lost en masse and (b) hierarchy is eroding at the same time, hence there aren’t necessarily clear pathways to re-institute that knowledge into the organization.

Admittedly the idea of hierarchy being stripped from an organization is a bit drastic, or at the very least more of a long play than something that would happen in the next three to five years — but again, topics like these get to this idea of thinking about how the business climate might be evolving and trying to get in front of that.

You don’t want your organization to lose knowledge, either via retirement of senior members or evolving organizational structures; you want a way to keep that knowledge in-house and ultimately universalize it (i.e. take it off one person’s e-mail/brain/Dropbox account). We can definitely help you with the knowledge management side; we’re not specialists on the organizational culture side — at least not yet.

Just remember: it’s important to think about how work might change and evolve, even six-12 months out — but often much further down the road. If you think along these lines, you’ll anticipate what changes you may need to tackle before your competitors do; ultimately, that’s a major strategic advantage. How companies deal with their knowledge and empower their teams will be a pivot point for American business in the future.