Firm of the Future: Managers and the End of Hierarchy



The traditional, hierarchical command-and-control structure of companies today will be insufficient as the workforce changes in coming years. Eric Garton, who leads Bain's Global Organization practice, outlines three characteristics that surviving firms will display in the future.

Read the Bain Brief: The Firm of the Future

Read the transcript below.

ERIC GARTON: Today's traditional, hierarchical command-and-control structures are simply not up to the task to managing the complex organizations that we're confronted with, especially with the changing workforce, whose complexion is changing dramatically as we think about generational shifts. Now, it's probably too early to think about the death of hierarchy altogether. But in reality, one thing we know for certain is that the companies that operate today cannot operate at the speed and agility required to compete in the future.

So what is a firm of the future going to look like? As we think about the firms that will survive from today into the future, there's probably three common characteristics. First, they're going to be much leaner structures than we have today.

Second, they're going to be led by professional managers, probably far fewer professional managers. They're going to have much larger spans of control. And they're going to be comprised of agile, autonomous and semi-autonomous teams. They're going to have to be networked and connected in ways through three principal means, through what we think of as a high-resolution strategy, through a common purpose and a shared way of working.

Now, these firms of the future are also going to require a different type of leadership, what we think of as a leader of the future. So what do we mean by a leader of the future? Well, it's probably easiest to talk about what a leader of the past looks like. Leaders who grew up in most of the organizations today were either in a system that was a hub-and-spoke or a command-and-control type of system.

Now, leaders in these models are both the primary decision maker and, often, the single source of strategic insight that has to get translated into action by his or her direct reports. Now, we know in these types of organizations, in a fast-paced, digitally enabled, millennial-infused world that we have survived in today, that at best these types of models are going to be outdated. And at worst, they're actually going to be the reason why incumbent companies find themselves so easily displaced by scaled-up startups.

Read the Bain Brief: The Firm of the Future