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Our new structure looked great sitting around a whiteboard. And for a while, it worked great. Everybody knew what they were responsible for and, more importantly, what they weren’t responsible for. Brandon didn’t have to worry about sales, Brent didn’t have to worry about finance, and Trey didn’t have to worry about production.

It didn’t work. Here’s why:

1. It created silos

It’s easy to say that imposing a hierarchy doesn’t mean that you won’t be able to work together across boundaries, but let’s be honest—the structure of the organization defines the structure of the interaction.

2. It turned a 7-person team into a 4-layered organization

Even as the CEO, I felt as though I needed to ask permission from Doug and Brent if I wanted Charlie’s help on something. I didn’t want to step on their toes or subvert their authority, after all.

3. It focused on “people management” instead of “process management” and “project management”

The primary motivation for adding structure was to help us complete our projects more effectively, but in reality we ended up spending a lot of time managing each other rather than processes. Holding someone accountable for meeting a milestone because of the importance that milestone plays in the overall project is much easier than holding someone accountable “because I told you so.”

4. It limited our creativity

I’ll use a quote I came across this morning for this one:

The strict hierarchy with a tight chain of command probably works best in a military-like situation, particularly in wartime. In such an intense environment, it is essential that you know exactly who has the final authority to make a decision. ... This same structure can be problematic in terms of open communication and information sharing in an organization that thrives on creativity, imagination and risk-taking. Consider advertising, where a campaign must be developed to communicate a compelling message to a target audience in a crowded environment. In this instance, the flatter organization model with very few lines of authority makes more sense. Everyone in the organization is offering his or her ideas without fear of reprisal. If a leader consistently “pulls rank,” it will stifle communication and impede risk taking. (Organizational Structure Impacts Communication Style by Steve Adubato)

So we ditched the hierarchy.

And next post I’ll tell you what took its place. (That’s right, I’m a tease.)