Against Vertical Structures That Destruct Your Company: A New Organization Theory for the Century

How Should We Build Up an Organization?


“How should I improve our organization which doesn’t seem working well?”
It is a question that troubles many managers and leaders.


How about installing a “Teal Organization” structure that gets rid of hierarchical relationships and management?
It seems to be on trend; although it seems very far from our current organization.


Or contrarily, how about “Hierarchical Organization” where managers do not take care of the motivation of employees and where the president should not talk with the employees.

Will it really make everyone motivated?


Although ISAO manages the organization with “Super Flat Organization” which is relatively close to that of Teal organization, we didn’t, actually, start designing our organization with the intent that “let’s make an organization with a flat structure.”

Starting from Outside Could Be a Mistake


In my opinion, changes made focusing on the outside will not result in a good consequence.


“What should I do then?”


I believe what is important is not the outside; it is the purpose that you want to achieve through building your organization.


Needless to say, an organization is made up of people.

Just as a person has his/her own characteristics, an organization made up of people also has its own characteristics.

Therefore, there’s no organization management theory with which you can say “This is the best answer for all the organizations!”


Seeking for a New Organization Management Theory


If I end this talk here, there’s no fruit for anybody, so I want to deliver my thoughts on “organization management in the future” taking ISAO as an example.

Although my ideas are based on ISAO situations, I believe they’re applicable for many other companies.


Especially, if the “Objectives” I will describe below matches with your company’s, I recommend using the following “Targets” and “Means” for your reference in your own organization management.

Let’s divide organization management into three stages and take a look at each.


Objectives: Events or status you want to achieve as a result.
Targets: To-do things need to be done in order to achieve the Objectives.
Means: Actual deeds to bring the Targets into reality.


Objectives, Targets, Means in ISAO Organization Management



  1. As a Company: To become a company which thoroughly seeks for the fulfillment of its missions and visions.
  2. For the employees: To provide and maintain an environment in which they grow.
  3. Toward the Society: To show reformation in organization building and become a reference for organization building in the world.



  1. To build up new ideas and values
  2. To get rid of unwanted stress created by hierarchical relationship, which is supported by authority, and create an environment in which people work with desirable strictness
  3. To run the organization work with speed



  1. Nurture new values
  2. Bring Openness in to embody desirable strictness
  3. Install Super Flat Organization to embody the management with speed

Now, finally at this point, the words ‘Open’ and ‘Flat’ came out.


“Means” Vary According to the Time


Among the Objectives, Targets, and Goals listed above, I consider Objectives and Targets to be the ones do not change in mid-to-long-term perspective.

On the other hand, Means, in order to achieve the Objectives and Targets, can be changed according to the situations.


It is just for current ISAO, the best strategy to get our Objectives done was ‘Open and Flat.

If you’re interested in more about ‘Open and Flat’, check out the previous articles in this blog here.


Why Vertical and Hierarchical Structuring Could Be Critically Harmful


Now, I will talk about why “Vertical Structuring Could Destruct Your Company” in the coming age.


In the previous century, especially in the rapid growth period, the organizations as such were highly effective.
That’s because what-to-do was decided.


The 20th century was a century of ‘Products.

Every product was seeking for better quality and further improvement, and so are the consumers. Therefore, the targets are on the extension of what they were in the past.

So, seniors with practical experiences can be at the top of the hierarchy and his/her knowledge could lead the projects to success. Besides, each department could contribute to the project’s improvement just by doing their own roles steadily.


That’s what it was then.


How about now in the 21st century?

Objectives and strategies cannot be decided based on what was successful once.


That also means that the person with experience in the past is not necessarily the best at making good objectives and strategies.


Moreover, youngsters without experiences is more likely to be able to make successful strategies in the future market.

Besides, comparing to 20th century, the changing speed of the market today is said to be 10 times faster than it was.

Therefore, the horrible situation we now face is that “if we took a wrong strategy, the company will shrink at a breakneck speed.”


For vertical and hierarchical organizations, overcoming the today’s challenges is almost impossible.

Why, Then, Organizations Cannot Escape From Vertical and Hierarchical Structure


This is actually because of the very simple reasons.

They are “it is frightening to change what they’ve been doing,” and “those with positions do not want to lay their vested interests down.


When an organization is Open and Flat, in-company tasks such as “managing people” will be minimized.
Those with positions, who have mainly been managing people, will lost their work in the company.


That’s why they object.
Objections aren’t usually obvious.


The reasons on the surface are probably such as “Making information transparent will weaken the controls in the company”, “Flat organization will make who’s responsible unclear”.

By nurturing desirable values and making a team in which everyone is responsible for their own work, nominal managers will no longer be needed.

There is a way to do that.

At least, ISAO did that.


I will explain in other opportunity how we nurture values and making responsible teams consist of responsible individuals.

Next: Nurturing Values That Will Create a “Successful Company Culture (Coming soon).”