The current debate – for example at Siemens – about the dismantling of hierarchies and titles shows that the real change is taking place in the corporate culture. Harald Smolak, Head of People Management at Atreus, explains why leadership, HR and change management are crucial – and what eight measures companies should take to successfully reduce hierarchies.
Executive Summary
Dismantling hierarchies: Why corporate culture determines success
- The challenge: The dismantling of hierarchies and titles not only changes organizational structures, but also has a deep impact on corporate culture. Without clear orientation, transparent decision-making processes and a new understanding of leadership, there is a risk of acceptance problems and resistance.
- The solution: Companies actively shape cultural change by redefining leadership, creating equivalent career paths, adapting incentive systems and professionally accompanying the change process through HR and change management.
- Your benefit: A consistently implemented transformation strengthens personal responsibility, accelerates decisions and creates the conditions for a modern, customer-oriented and efficient organization.
- Focus: Breaking down hierarchies, corporate culture, leadership, change management, HR transformation
The US company WL Gore & Associates attracted international attention in the 1980s with an unusual organizational philosophy: no classic hierarchies, no rigid rankings, and as few formal titles as possible. Instead, Gore relied on personal responsibility, entrepreneurial thinking and consistently team-oriented collaboration. The aim was to implement innovations more quickly, to make decisions closer to the customer and to understand employees culturally more as co-entrepreneurs.
It is precisely this idea that Siemens is taking up today with its strategic orientation towards becoming a “One Tech Company”. CEO Roland Busch aims to make the technology group more agile, technology-oriented and closer to customers. In times of artificial intelligence, data-driven decisions and globally networked collaboration, this development seems only logical. Decision-making processes become more transparent, analyzes become standardized and operational processes become more efficient. Individually developed departmental logics are increasingly losing importance in favor of integrated, fast and customer-oriented structures.
When titles become part of your identity
But at Siemens in particular, the abolition of hierarchies and titles touches on a sensitive cultural core. For decades, titles were much more than organizational assignments – they were an expression of status, recognition and individual career achievement. A clearly defined management career developed from non-tariff employees through group representatives to functions such as department representative, department director or director. At the same time, international titles such as Vice President and Senior Vice President were established. Expert careers were also made visible through titles such as senior engineer, speaker or main speaker.
These evolved structures have had a lasting impact on the corporate culture. Many leaders associate their titles with personal achievement, identity and influence. The emotional dimension of such a cultural change is correspondingly large. For many, giving up titles not only means organizational change, but also a loss of orientation, status and differentiation.
In addition, companies are simultaneously confronted with further transformation dynamics: artificial intelligence is changing work processes, global data platforms increase transparency and standardized systems reduce classic control and reporting efforts. Functions such as controlling, reporting or administration in particular are experiencing a massive change in their self-image. The traditional concept of centralization is increasingly being replaced by the idea of intelligently networked, transparent and customer-oriented operational excellence.
The real change lies in changing the corporate culture
The abolition of hierarchies does not only work through new organizational charts or modernized title structures. It requires a fundamentally new understanding of leadership. This is exactly where HR management plays a key role. Human resources departments become architects of cultural change.
Such a “major change” requires consistently orchestrated change management. Communication must not only be top-down, but also credible, dialogue-oriented and continuous. Managers must understand why this change is necessary, what contribution they make and what opportunities it creates.
It becomes particularly critical where areas of responsibility become smaller or traditional leadership power is lost. Not every manager will welcome this change. Many initially experience the transformation as a loss of influence, visibility and status. This is precisely why it is not enough to abolish titles – rather, new forms of recognition, responsibility and development must be created.
What companies should do specifically
In order for an organization with fewer titles and hierarchies to succeed, additional structural and cultural measures are needed:
1. Establish new career paths
In the future, careers may no longer be defined exclusively by leadership responsibility. Companies need equivalent specialist, project and expert careers with high visibility and recognition.
2. Evaluate influence instead of position
In modern organizations, leadership increasingly emerges through competence, networking skills and impact – not through hierarchical power. Performance systems must reflect this.
3. Create transparent decision logic
Without hierarchies, the need for clarity increases. Employees must be able to understand who makes decisions, how priorities are set and what responsibilities apply.
4. Requalify managers
The role of the manager is changing from a decision maker to an enabler. Coaching skills, conflict moderation, collaboration and the ability to change are becoming more important than traditional authority to give instructions.
5. Develop new symbols for recognition
When titles disappear, culture needs new forms of visibility: for example, project-related responsibility, expert status, innovation awards or company-wide communities.
6. Consistently adapt incentive systems
As long as compensation, bonuses and status mechanisms continue to be hierarchical, the transformation will remain implausible. Cultural change must be reflected throughout the entire HR system.
7. Promote small agile units
Hierarchy-free organizations work particularly well where teams can act independently. Small, interdisciplinary units increase speed and responsibility.
8. Strengthen error culture
Less hierarchy also means more personal responsibility. This requires psychological safety and a culture in which learning is more important than blame.
The biggest challenge: credibility
Whether the transformation succeeds depends less on concept papers than on the behavior of top management. Employees observe very closely whether leadership is actually being practiced in a new way or whether old power structures are simply being linguistically modernized.
If roles remain unclear, decision-making processes appear opaque or previous hierarchical patterns continue to exist informally, resistance arises. Then a silent countermovement grows in the organization that delays or blocks change.
The abolition of titles can be a huge opportunity: less bureaucracy, faster decisions, greater customer focus and a modern leadership culture. However, it can also fail if companies underestimate the emotional and cultural nature of this transformation.
Especially with a traditional company like Siemens, it becomes clear that the most difficult part of digital transformation is not technology – but cultural identity.
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