What Gen Z Gets Right About Organizational Hierarchy

The effectiveness of a business is centered around its ability to make decisions. Individuals and the organization as a whole need to make accurate decisions quickly. Decision velocity is the speed and direction (or accuracy) of decisions.

According to Jeff Bezos, founder and CEO of Amazon, "You have to somehow make high-quality, high-velocity decisions. It’s easy for startups and very challenging for large organizations…Speed matters in business — plus a high-velocity decision-making environment is more fun too."

One key element of effective organizational decision-making is how the organization is structured: organizational hierarchy.

Organizational structures may seem like an executive decision, but adapting to employee expectations can increase both decision velocity and employee recruitment.

InsideOut Development Survey: Gen Z’s Ideal Organizational Structure

Generation Z (Gen Z) is the newest generation to enter the workforce, and while they have a lot in common with Millennials, they also have some key differences. In an attempt to better understand these differences, InsideOut Development surveyed over 1,000 members of Gen Z across the United States about their workplace, boss, and overall career expectations.

We wanted to know what this up-and-coming generation is looking for in terms of organizational structure. We asked them point-blank: “In your opinion, what type of organizational hierarchy works best?”

Types of Organizational Hierarchies

While there are many types of organizational hierarchies, we summed them up into four categories:

• Traditional hierarchy: Decisions are made by company leaders, making it a top-down style
  
  
• Horizontal/flat: Decisions can be proposed by anyone and are reviewed by the whole company
  
  
• Divisional: Each function in the company has a leader making decisions for their function
  
  
• Team-based/network: Teams collaborate to decide priorities

Survey Results: Collaboration Is Key

We noticed a trend that helped us analyze more thoroughly what Gen Z is looking for in an organization — they want to be close to the action. Gen Zers are used to collaborating and being involved in making decisions, and they clearly want this trend to continue in the workplace.

They prefer to be directly involved by having teams collaborate to decide priorities, but a close second-best is to have a leader for each smaller unit of the business. This structure allows them to be closer to the leader (the person making the decisions). It enables them to contribute to and learn from the decision-making process.

While the idea of everyone having an equal voice in making decisions sounds great to some Gen Zers, 87% recognize this is probably not the most effective strategy. Even though they crave being a part of the decision-making process, they understand that i an organization has too many people contributing to every single decision then decision velocity suffers.

Gen Z believes that just as having too many people involved in decision-making — a horizontal structure — can hurt the speed of decision-making, having too few people involved affects the directional accuracy of the decisions.

This style of top-down management with clear chains of command is Gen Z’s least preferred organizational hierarchy because it severely limits their ability to collaborate and be involved.

Vanita Bellen, founder of True North Coaching and Consulting, adds additional insight:

“Gen Z values diversity. Businesses should foster diversity by creating organizational structures that promote interdependence between functions. Give individuals and groups opportunities to voice differing opinions and engage in collaborative problem-solving, and design ‘third spaces’ that allow interactions outside departmental boundaries to promote dialogue, create identity, and build community.”

Wrapping Up

Children of a fast-moving digital age, Gen Zers instinctively consider decision velocity in their quest for improvement.

While it isn’t necessary to change your whole organization’s structural hierarchy just to accommodate Gen Z preferences, understanding why Gen Z feels the way they do will help you better set them up for success in the workplace. And it may even improve your decision velocity.

Want to understand more about Gen Z’s preferences in the workplace? Check out our eBook “The Ultimate Guide to Generation Z in the Workplace” for the full survey findings and other relevant research you should know.