The bossless company is one of the most seductive ideas in modern management, and one of the most misunderstood. The seduction is the image of authority dissolving into a room of equals. The misunderstanding is believing that is what actually happens when you delete the org chart.
Power does not vanish, it goes underground
The sharpest correction comes from scholars who are sympathetic to neither hype nor nostalgia. Nicolai Foss and Peter Klein (2022) argue that flat or bossless organizations can work under stable conditions but tend to struggle with innovation, scale, and longevity in dynamic, time-sensitive environments. More pointedly, they observe that many firms which call themselves flat still retain real bosses and hierarchies, only informal or renamed. Formal hierarchy is not eliminated so much as replaced by an informal one, which is often worse because it is unaccountable. In the popular write-up of their work, the claim is blunt: near-bossless firms with self-managing teams do not show demonstrably superior overall performance, and there are few of them (strategy and business, 2022).
This is not an argument for command and control. It is an argument for honesty about where authority lives. When you strip the titles without designing what replaces them, influence flows to whoever is loudest, longest-tenured, or closest to the founder. The chart said equality. The lunchroom knew better.
The cautionary case the movement stopped citing
Zappos was for years the flagship of radical flatness, the largest company to adopt holacracy in full. The ending is instructive. In March 2015 the chief executive gave employees an ultimatum to embrace holacracy or leave, and about 18 percent took a buyout (Groth, 2020). The company then quietly retreated: it dropped the system's bureaucratic meetings, brought managers back, and by 2017 had moved to a market-based structure. The lesson is not that self-management fails. It is that self-management imposed as an ideology, without the structures and the consent to sustain it, collapses back toward conventional hierarchy under its own weight.
What actually holds a flat structure up
The firms that sustain low hierarchy do it with deliberate substitutes for the boss, not with slogans. The academic definition helps here: Michael Lee and Amy Edmondson (2017) describe a self-managing organization as one that radically and systematically decentralizes authority, and they are careful that hierarchy has genuine uses. It executes known tasks reliably in stable conditions, and it is non-routine, cross-boundary problem-solving where it fails. Flatness is a tool for the second job, not a moral upgrade for all jobs.
The durable examples build institutions in place of managers. W. L. Gore has run for decades as a lattice with no designated bosses, where associates form and disband project teams and the chief executive is chosen through a process of internal recognition rather than appointment (Gronning, 2016). Semco, the case that anchors this entire tradition, did not simply remove managers. Ricardo Semler documented three concrete mechanisms in its shift to workplace democracy: employees setting their own hours, profit sharing, and open books that let workers read the monthly accounts (Semler, 1989). Note what these have in common. They are not the absence of structure. They are structures that distribute information and authority on purpose, which is the opposite of a vacuum.
The question is accountability, not the number of layers
The real design choice is not flat versus hierarchical. It is visible, accountable authority versus hidden, unaccountable authority. A traditional hierarchy at least names who decides. A poorly designed flat structure hides that person while pretending they do not exist, which removes the one thing that makes power tolerable: the ability to see it and to challenge it. Foss and Klein's warning and Zappos's retreat point the same way. Power abhors a vacuum, and an undesigned flat organization is a vacuum with good intentions.
The practical read
Before flattening, decide what will carry the authority the layers were carrying, and make it explicit. The evidence supports low hierarchy for non-routine, knowledge-intensive work in reasonably stable conditions (Lee and Edmondson, 2017), and it warns that flatness struggles where speed and scale dominate and that it quietly regrows informal bosses when left undesigned (Foss and Klein, 2022). The organizations that make it work, Gore, Semco, install visible substitutes: open information, elected or recognized leadership, and clear ways to distribute decisions (Gronning, 2016; Semler, 1989). Do not sell your people an office with no power in it. Sell them one where the power is on the table, where they can see it and reach it.
Sources
- Foss and Klein (2022). Who's the boss? The persistence of entrepreneurial hierarchy in flat organizations. Flat firms struggle in dynamic environments and often replace formal hierarchy with informal, unaccountable hierarchy. https://link.springer.com/article/10.1007/s41469-022-00132-8
- strategy and business (2022). Can bossless management work? Reports Foss and Klein's finding that near-bossless firms are few and not demonstrably superior in performance. https://www.strategy-business.com/article/Can-bossless-management-work
- Groth (2020). Zappos has quietly backed away from holacracy. Documents the 2015 ultimatum, an 18 percent buyout, and the retreat toward managers and a market-based structure. https://qz.com/work/1776841/zappos-has-quietly-backed-away-from-holacracy
- Lee and Edmondson (2017). Self-managing organizations. Defines the self-managing organization and clarifies where hierarchy genuinely helps and where it fails. https://www.sciencedirect.com/science/article/abs/pii/S0191308517300059
- Gronning (2016). Working Without a Boss: Lattice Organization at W. L. Gore. Documents a durable no-boss lattice where teams self-form and the CEO is chosen by internal recognition. https://sk.sagepub.com/cases/download/person-to-person-communication-at-wl-gore-associates-inc
- Semler (1989). Managing Without Managers. First-person account of Semco's shift to workplace democracy via self-set hours, profit sharing, and open books. https://hbr.org/1989/09/managing-without-managers