Why corporate hierarchy can limit innovation

And how we became a Teal organisation

Job titles, line managers and departments are all things you won’t find at Mindera.

Organisations tend to be characterised by functional boundaries, management hierarchy and formal reporting lines, which breeds bureaucracy and red tape, making employees feel like a small cog in a big machine. It can be hugely demotivating and in fact, according to Gallup's State of the Global Workplace report in 2023, only 13% of workers in Europe feel engaged at work.

In contrast, Mindera, the global software engineering company where I work, was set up to have the well-being of people at its core. Minders (how we refer to employees) are encouraged to be autonomous, work on projects that interest them, and to learn about other parts of the business.

With a lack of hierarchy, people can work faster, and the organisation is more agile as there are fewer layers to decision-making. This allows innovation to thrive as people can try new things and adjust as necessary.

That said, the idea that an organisation can be non-hierarchical and self-organising can seem incompatible with the corporate world. So how does such a company create a thriving workplace and attract new people?

Working towards the Teal standard of organisation

The Teal organisational model was coined in 2014. It describes a way of working that is based on trust, autonomy, self-management and an absence of hierarchy based on power. Moving from a hierarchical to a non-hierarchical structure can be difficult so organisations can work towards the Teal standard as a starting point.

Autonomy, trust, and self-management are key principles for Teal organisations. When people aren't given defined roles, the expectation is that chaos ensues but that is not the case. People are more likely to take more responsibility for a wider range of activities because they are not pigeonholed. People must be trusted to be able to move across the business, develop new skills, and play to their strengths. For some that may mean only working on one part of the business, for others, it may mean working across multiple parts of the business. The flexibility is there to allow individuals to do what feels comfortable to them.

For any workplace to work, the team must be more important than the individual, and that requires immense collaboration and communication. Autonomy does not come at the cost of the team. Instead, everyone should work for the benefit and progress of the group rather than just their own promotion.

Celebrating individuality and embracing change

While the team has primacy, individuality should not be neglected. In spaces with less hierarchy, people can be more authentic and bring their full selves to work.

Using myself as an example, I have a background in psychology, and I've always been interested in human behaviour. I work in a tech company with software engineers, but I work mostly with people, so I call myself a "human engineer". I use some of the skills I learned as a psychologist in my current role to ensure my team and I are working harmoniously.

Appreciating the individuality of colleagues means being open to new ideas, perspectives, and change. In contrast, hierarchical organisations can make people feel like they have to conform to a set structure, which can limit innovation.

Hiring and making tech more diverse

Hiring by its nature ushers in some level of change, as new people can affect the culture. For an organisation to be successful, prospective workers must have the necessary skills and align values. However, it is also important to hire people from a range of backgrounds.

A diverse pool of people gives organisations a wider range of cultural perspectives, which is vital for an industry that influences people around the world. While the tech industry has improved its diversity in the last few years, there is still room for improvement. A report by TechTalent Charter shows that 28% of people in tech are gender minorities and ethnic minorities only make up 13% of senior roles.

With such a lack of diversity across levels, hierarchical organisations can have blind spots that can stifle innovation and lead to poor products and services. In contrast, organisations with less hierarchy, are better able to integrate ideas from a range of people.

At Mindera, we run several schemes to improve diversity and access to the tech industry. Our Code Academy and school enables people from different professional backgrounds to get into technology, and 120 people have already passed our courses.

Final thoughts

Unlike technology, people are not machines, they are autonomous and unique. Organisations with hierarchies can create environments that are stale, slow to innovate, and where its people don't feel valued.

Instead, companies should be open to working collaboratively. Ultimately, when putting people first and allowing them to be able to work in ways that best suit them will make them happier and it can also unlock new opportunities for the company.

Pedro Teixeira is Human Engineer at Mindera