Leading without the hierarchy theatre: what really holds teams back

When rank beats the argument

A meeting, ten people, one problem. The employee who knows the subject best sits at the edge of the table and says little. The managing director made up his mind in the first few minutes, and since then it has all been about agreeing with him elegantly. That is what hierarchy theatre looks like: rank determines whose opinion counts, and the corner office, the company car and the job title are a daily reminder.

Success is created by teams. Whether the people in a company get along matters more to me than any key figure, because the key figures only emerge from that. Appreciation becomes trust, and trust becomes performance. How little of this gets through is shown by the Gallup Engagement Index Germany 2025, based on 1,700 employees surveyed: only 18 per cent are enthusiastic about their company's leadership for the future, and 77 per cent feel little connection to their employer. Anyone who runs teams through rank and status gets three side effects: silence towards the top, turf wars sideways, and long routes to every decision. A company still needs clear responsibility.

Flat hierarchies in research

Flat hierarchies, meaning few levels between employee and management, have been considered modern for years. In 2018, a group of researchers led by the psychologist Lindred Greer summarised 54 studies covering 13,914 teams in a meta-analysis, an evaluation of existing research. The more pronounced the ranking order within a team, the weaker its performance and its willingness to continue working together. The effect is small, but it points in the same direction across all the studies.

The assumption that hierarchy improves coordination within a team found no support in the data. What did show up was more conflict. Three circumstances made the disadvantage worse: frequently changing members, widely differing expertise, and a ranking order that can be changed. Where positions have to be fought for, they are fought for, and the actual work waits in the meantime.

Status symbols are losing their value

The company car is the classic status symbol of German companies, and it is losing its effect. The 2019 company car monitor produced by the Hamburg remuneration consultancy Compensation Partner evaluated around 182,000 employment relationships: twelve per cent of employees drive a company car, and among managers in sales the figure is 63 per cent. At the same time, 60 per cent of employees rated the company car as unimportant.

A survey of around 1,000 working people, conducted by the Omniquest institute in May 2026 for a fleet services provider, points the same way: 79 per cent see the company car as a work tool, 21 per cent as a perk. Fewer than nine per cent care about always driving the latest model. Even so, in a good third of cases allocation depends on position or salary grade. A symbol that no longer means anything to the majority only marks the distance between those who have it and everyone else.

Titles as a substitute for pay

Where the company car no longer works, the job title moves in. The recruitment firm Robert Walters counted a good 48 per cent more job adverts in the US within a year for "Lead", "Manager" or "Vice President" roles requiring no more than two years' professional experience. An inappropriately awarded "Senior" in a title brought 39 per cent fewer applications. How employees experience this is shown by a survey of 1,000 workers in the US conducted by the application service MyPerfectResume in August 2025. 92 per cent believe that companies use inflated titles to fake career progress. 91 per cent regard titles as a means of avoiding pay rises.

The figures come from the US, but the principle behind them knows no borders. Every new "Head of" creates a level that wants to be asked. And a title that serves as a currency is treated like a currency: people collect it and defend it. That is the changeable ranking order which, in the meta-analysis, fuels conflict within the team.

Decision-making routes as a quiet brake

The most expensive piece of hierarchy theatre is invisible: the sign-off. Every level that has to countersign lengthens the route from problem to decision. The New Work Barometer 2026 from SRH University in Berlin, for which 734 people were surveyed, roughly half of them managers, puts a price on it: almost 40 per cent of working time goes into bureaucratic processes. 70 per cent of respondents had seen an increase over the past two years. Managing directors and executives perceive considerably less bureaucracy than their employees, presumably because they trigger the loops and rarely wait in them themselves.

The study separates external requirements, such as laws and auditing obligations, from home-made rules such as internal policies and controls. Only home-made bureaucracy was associated with poorer organisational performance. The German Economic Institute reaches a similar picture in its 2025 employee survey with around 5,000 participants: one in two spends a day a week or more on reporting and documentation duties, and managers spend 30 per cent of their working time on average.

Where a clear ranking order helps

The opposing view deserves to be taken seriously, because hierarchy can save coordination. In 2015, researchers at Columbia Business School and the business school INSEAD evaluated data from 5,104 Himalayan expeditions involving more than 30,000 climbers from 56 countries. Teams from countries with a hierarchical culture reached the summit more often. But those teams also lost more people, because concerns from below got through less often. Among solo climbers, neither effect occurred. The meta-analysis also found one case in which hierarchy helps: when it is unclear what needs to be done at all.

For me, that leads to a simple distinction. Clear responsibility is useful: someone decides in the end and answers for the result. That is how I handle it as a founder, and decisions under uncertainty are part of it. Harmful is everything that translates that responsibility into rank. In my companies, lawyers and developers worked hand in hand, and I lead such specialists rather than merely mediating between them. That works because I understand their work: the legal core as a lawyer, the technology as a programmer, the commercial side as a founder. Authority based on understanding needs no corner office. And change only succeeds with people, not against them: anyone introducing something new has to listen, explain and create acceptance. That applies to software as it does to any other decision.