As an alternative to a hierarchical organization that can hinder employee freedom, collaboration and innovation, some companies are choosing to adopt a lattice organizational structure. This is a type of flat structure, meaning it lacks layers of management who provide supervision and instead gives employees the responsibility of governing themselves and making decisions.

The open communication, cost savings and efficiency of this type of structure can appeal to your small business. At the same time, you should prepare for challenges that come with less-defined roles, control and business growth.

What's a Lattice Organizational Structure?

When a business has a lattice organizational structure, it doesn't have a traditional hierarchy that establishes a chain of command with an organizational chart. While traditional organizations would have managers who directly oversee employees and make decisions, a lattice-structure organization lets employees direct themselves and make decisions as a team. At the same time, information shared in the company flows freely among employees instead of downward and upward like it would in a business with a formal structure.

This organizational structure originated from the ideas of Bill Gore, an engineer who had worked for the DuPont Company through the late 1950s. He sought a business structure that allowed for more open communication, creativity, innovation and team accountability. Gore also wanted to create a type of business where employees didn't have to worry about being told they had to do a specific task or do it a certain way. In the end, he felt that employee motivation and recognition should come from the results of helping the whole team succeed.

Lattice Structure Business Example

When you look at a business with a lattice organizational structure, you'll notice that employees don't have actual job titles. Instead, you'll probably see them sorted by functional area, like information technology and accounting. This means that employees often perform several roles in the company and participate in ongoing training as needed. This also means you won't see regular promotions since all employees will be seen as equal.

When it comes to getting work done, rather than having a manager assign projects to workers and oversee them, teams get together to accept projects, manage themselves and make collective decisions. Workers aren't tied to one department and don't need to go through red tape to get things done. It's common for them to seek input and advice from any other co-worker who can help complete the task.

Benefits of a Lattice Structure

Choosing a lattice structure for an organization comes with the following benefits:

  • Cost savings: Adopting a lattice structure in an organization saves money since businesses don't have to hire multiple managers to oversee teams. Since this structure requires highly skilled workers who can perform without supervision, a business can also save on turnover costs since there's a more selective hiring process. Reduced human resources costs can ultimately boost the company's bottom line.
  • Clearer workplace communication: Allowing employees to communicate directly cuts down on misunderstandings that can cause conflict and affect work productivity and quality. Employees end up with a better understanding of their responsibilities and can easily get clarification and help as needed.
  • Improved employee morale: Giving employees more autonomy usually boosts morale since workers feel happier when they have control over decisions and the work they perform. Some employers also feel more satisfied when they don't have the pressure of a boss watching them constantly. Employees may also feel happier since they can engage in a wider range of skills without the limits of formal job titles or positions.
  • Higher creativity and innovation: The open communication you see with lattice organizations promotes the sharing of ideas and can boost innovation. Allowing teams to manage themselves and make decisions can bring more creativity to their work.
  • More efficient decision making: Traditional hierarchies lead to more time to make decisions since there are multiple levels of managers and employees to go through. A lattice structure makes the process happen more quickly since teams can make their own decisions without having to run them past managers.

Disadvantages of a Lattice Structure

While a lattice organizational structure can offer your business several advantages, you can also face these challenges:

  • Harder to control: The lack of hierarchy and the overall freedom of employees can make a lattice organization harder to control. While there aren't formal managers, these businesses still require someone to oversee operations and make sure that employees make good decisions and avoid poor behaviors. The larger the company, the harder it is to keep a lattice organization in check.
  • Trickier hiring process: For this organizational structure to work, the company will need exceptional employees who can motivate themselves, handle the responsibilities and be flexible enough to take on different roles. At the same time, these employees need to feel comfortable with not having traditional promotional opportunities. This adds complexity to the hiring process and can make it harder to fill spots.
  • Potential retention issues: While the autonomy offered in lattice companies can make employees more satisfied, the company can still have workers who end up not satisfied with traditional opportunities to advance. This places even more importance on a hiring process that honestly communicates expectations.
  • Possible power struggles: Natural leadership arises within teams, and this can cause power struggles between employees who feel they should have that responsibility. This can cause a distraction that makes it harder for projects to get done on time.
  • Challenges with implementation: While any size of business can implement this flat type of organizational structure, it tends to work more easily for small businessesand nonprofit organizations than for large, multinational corporations.At the same time, a lattice organizational structure is easier toimplement from the start than to try to transition to one once a company has grown and seasoned.
  • Potential role confusion: Not having formal job titles can leave employees confused about their responsibilities or even dissatisfied if they have to take on work for which they don't feel qualified. This can waste time when employees need to ask for clarification often, and employees may not perform well when they feel uncertain about how they should do their jobs.

Making a Lattice Organization Work

Now that you understand common flat organizational structure advantages and disadvantages, you can consider whether a lattice organizational structure will work well for your small business. Along with assessing your business needs, you should get input from current employees if you're making a transition from another structure. Also consider whether you expect to scale your company since a lattice structure could become a hindrance.

If you do decide to implement a lattice structure, it also helps to take some steps that will make it easier to maintain high work performance, avoid workplace conflict, prevent turnover issues and maintain control of the organization. Consider these tips:

  • To keep your workforce productive, you'll need to clarify employee roles from the start, keep staff informed on how they should communicate and help develop strong teams that can handle important projects.

  • Keeping employees satisfied will mean teaching conflict-resolution techniques and providing any necessary training as roles evolve.

  • To prevent retention issues, consider offering opportunities outside of traditional promotion that can grow employees' skills and offer incentives for learning.