Ask a retired executive what they miss and few say the budget meetings. They miss being the person the room reorganizes around. That is worth naming precisely, because organizations experimenting with flatter structures are not mainly fighting incentives or org charts. They are fighting a status system in which a whole generation's self-respect is denominated, like a currency nobody will exchange.
The first honest step is admitting how much of that currency was minted by attribution rather than earned by causation. In a classic series of studies, Meindl, Ehrlich and Dukerich named the “romance of leadership”: the tendency to over-credit leaders for organizational outcomes. In their experiments, the same executive was judged far more charismatic when the company happened to perform well. Charisma turned out to be something followers award retroactively, not something leaders possess. A corner office, on this evidence, is partly a scoreboard for luck.
What actually disappears in flat organizations (and what doesn't)
The second honest step runs the other way. Hierarchy's critics promise its abolition; the evidence says it mostly goes underground. Foss and Klein document that many self-described bossless firms retain real bosses informally, renamed rather than removed, and that flat structures strain in fast-moving environments. At Valve, the poster child of bosslessness, employees by 2013 were calling the firm's creative state “The Wilderness.” Informal hierarchy is in some ways worse for the status question than formal hierarchy: influence still exists, but there is no legitimate ladder to climb down.
So the real design problem is not eliminating status. It is separating the two things the corner office fused: standing (being valued, heard, consulted) and control (owning other people's days). Organizations fail at flatness when they abolish the titles but leave standing hostage to informal control. They succeed when standing has other sources: craft, judgment, teaching.
The company that built a down staircase
Semco's contribution to this problem was unusually concrete. Everyone evaluated their boss anonymously twice a year, and a low score twice running meant losing the role, Ricardo Semler included; separately, a team could veto a manager outright. As Semler has told it, the first year was uncomfortable, and then something interesting happened: managers who used to shout began to ask. But the detail that matters most for the status question is what happened to the ones who did not make it. Returning to technical work, at the same salary, was a legitimate exit. Some of the vetoed managers went back to doing excellent technical work, unhumiliated and unpoor.
That one design choice, decoupling pay and dignity from the possession of subordinates, is the whole argument in miniature. Where stepping down means financial and social demotion, every manager will fight to the last memo to keep a role they may be bad at, and every flattening initiative becomes a war. Where the down staircase is carpeted, authority becomes a job rather than an identity, held while deserved.
The underlying principle, as Semler framed it, was that whoever controls other people's days has to keep deserving it. Control, uniquely among workplace goods, was rented, never owned.
Status after hierarchy, for the person who had it
For the senior leader personally, the exchange on offer is better than it looks from above. What flat and flatter organizations starve for is not authority; the research on their failure modes shows coordination and judgment are exactly what they lack. A person with thirty years of pattern recognition, who no longer needs to win, is the scarcest resource such systems have, provided the advice arrives without a command attached.
The old status was positional: it existed because others were below. It also demanded constant defense, since any reorganization, merger, or ambitious subordinate could take it, which is why so much executive energy went into holding ground rather than using it. The available status is reputational: it exists because others come back. The first evaporates at the retirement party, which is why the party feels like a funeral. The second compounds, because it lives in other people's improved decisions rather than in a door with a name on it.
The corner office was never the asset. It was the packaging. The asset was always the judgment inside, and judgment, unlike the office, does not have to be surrendered to the next occupant.
Sources
- Meindl, J., Ehrlich, S. & Dukerich, J., Administrative Science Quarterly (1985). The Romance of Leadership. Observers over-attribute outcomes to leaders; the same executive is rated far more charismatic when the firm performs well. https://doi.org/10.2307/2392813
- Foss, N. & Klein, P., Journal of Organization Design (2022). Who's the boss? The persistence of entrepreneurial hierarchy in flat organizations. Bossless firms retain informal hierarchy; Valve's flat structure produced creative inertia employees called 'The Wilderness'. https://link.springer.com/article/10.1007/s41469-022-00132-8