The Steward and the Satrap

I haven't been through many organizations, but it seems to me that there are a few broad strokes when it comes to structuring an organization, and one of the first strokes is whether it is flat or hierarchical. (This can change over the course of an organization, but I think a founder's choice drives this up to a point).

Structurally, these are not that different. They're both trees, only the height of the tree and the thickness of the branches differs. In general, a flat organization has fewer layers, and a hierarchical one has more. There's no avoiding some kind of hierarchy; the question is how that is structured.

Organizational Structure Drives Ownership

The difference in structure matters mostly with regard to decision-making power.

Consider that an organization—as a single entity—has full decision-making power at the very top. The owner, founder, CEO, board, powers-that-be can decide every tiny little detail they want. Their company, their money, their rules. The base case of an organization is an organization of 1, where the Owner has 100% of the decision-making power. Naturally as work grows, they hire (hopefully) competent people, and delegate this decision-making power downward (sometimes along with equity in the organization).

As a consequence, decision-making power is diluted with every layer introduced (at the top as well as the bottom). A flat organization has fewer layers, and therefore tends to have more decision-making power - and therefore ownership - per person.

Ownership is a weird word in most organizations. Even with equity, most employees - even the CEO - can be unilaterally fired. And in most organizations, no one gets equity, and are literally 'hired hands'; the company's success or failure doesn't matter as long as they get their paycheck.

For the purpose of this article, let's describe Ownership as 'the ability to make decisions and share in the consequences (good and bad) of those decisions'.

A Flat organization structurally enables higher Ownership per individual than a Hierarchical organization. With this in mind, the obvious next question is: shouldn't we just aim for an organization where every individual operates at their best within the scope they own, and then we can just give everyone ownership and let them run with it?

The reality is necessarily different. Individuals are motivated by very different things, and not everyone can—or should—be given ownership without oversight.

Flat structures work well in organizations where the culture and people are genuinely oriented toward ownership — where there's enough structure to support both autonomy and accountability.

Hierarchical structures are better suited to organizations where no single individual can be accountable for an outcome, or where the organization is so distributed that sharing context efficiently and transparently is simply not possible.

The right structure depends on the work, the people, and the constraints you're operating within.

Ownership → Leadership

In a sense, ownership and leadership are overlapping concepts. A leader - as a steward - necessarily sees themselves as an extension of the owner, and are trusted as such with authority to make decisions and share in the outcomes.

There's a huge difference between leadership in a flat organization and leadership in a hierarchical one.

Flat organizations have many 'owners' who need alignment, who are also the doers. If they're aligned and communicating well, they can move organically and efficiently toward organizational goals.

Hierarchical organizations have few 'owners' who need alignment, and many doers who need instruction. Often there's a layer of management 'between' the owners and doers, who act as 'pseudo-owners' of a sort.

Leadership in a flat organization relies on transparency, trust, and a common vision that motivates and guides organic action.

Leadership in a hierarchical organization relies on a clear chain of command, boundaries, and effective management of tasks.

To be clear, both types of leadership and organization are necessary. A military unit is not the same as a startup, and their organizational structure and leadership styles will reflect that.

Crossing Over Has Asymmetrical Impact

The problem arises when a leader from one kind of organization lands in the other. My hypothesis is that a leader from a flat organization going to a hierarchical one will just be frustrated. But a leader from a hierarchical organization going to a flat one can destroy the flat organization's momentum and culture. The difference in damage is worth examining.

The Frustrated Steward

When a leader who thrives on stewardship, direct accountability, and removing roadblocks lands in a deeply layered hierarchy, the outcome is predictable: they leave.

The friction of the hierarchy acts like an immune response. The slow pace, the endless alignment meetings, the rigid rules—it all adds up to a swamp that drowns the steward's energy. They value impact over optics, and they quickly realize they can't deliver real change in such a system. So they exit early, and the hierarchy remains unchanged.

This is unfortunate, but it's not catastrophic. The hierarchy absorbs the loss and moves on.

The Satrap

But when a leader whose primary skill is political maneuvering, optics management, and "managing up" lands in a flat organization, the outcome is far more dangerous. They thrive.

In a flat organization, people generally assume good intent. They value autonomy. They expect others to be as intellectually honest as they are. This environment is a vacuum of formal power, and to someone used to hierarchical games, a vacuum is an invitation.

The Satrap doesn't leave. Instead, they start building a Shadow Hierarchy — an informal power structure that's harder to detect and more corrosive than any formal one.

The Colonization of Trust

Because there are no formal checkpoints or rigid layers to stop them, the Satrap uses their political savvy to:

1. Manufacture Optics — They ensure that the founder and key peers only see a version of reality that looks perfect on paper. Problems get smoothed over. Metrics get massaged. The surface looks clean while the rot sets in underneath.

2. Squeeze Autonomy — They start demanding compliance over capability, pulling decisions back up to themselves. Slowly, the team's motivation erodes. The people who thrived on autonomy start feeling suffocated. The energy that made the flat organization work begins to dissipate.

3. Entrench — They are experts at survival. By the time the organization feels the slap in the face of a failing culture, the Satrap has already built a web of relationships and managed perceptions that make them incredibly difficult to oust.

The damage isn't just cultural. By drawing decisions upward and slowing them down, the Satrap effectively removes ownership from the lower layers — the very thing that made the flat organization work in the first place. The organization becomes slower, more cautious, and less trusting, all while the surface looks fine.

Flat organizations are an ecosystem

If leaders in the flat organization are unaware, they'll be taken by surprise and often suffer as a result, rather than isolating the Satrap and limiting the damage.

The tragedy of the Satrap is that they're often only identified after the best people - the autonomous high-performers - have already left.

If you're leading a flat organization, I think your primary job isn't just to set the vision. It's to guard the field. A flat organization is a vacuum of formal power, and the Guardian's job is to make sure something healthy fills that space before something else does.

Boundaries as a Defense

I think one way to limit the Satrap's reach is to make the rules of the game explicit. If everyone knows who decides what, how decisions get escalated, and where the guardrails are, then there's less room for a shadow hierarchy to operate. The Satrap can't quietly pull decisions upward if the boundaries are visible to everyone.

This is the idea behind something like holacracy. Instead of a rigid hierarchy, you get distributed authority through self-organising teams and clear meeting formats. The intent is to flatten the organisation without creating a vacuum — power is handed out intentionally rather than left for whoever is most politically savvy to grab.

But I don't think boundaries alone are enough. Studies on holacratic organisations have found that shadow hierarchies can still emerge, sometimes even more harmful than the ones they replaced. I suspect the reason is that formal rules only address formal power — who gets to decide what. They don't fully account for informal power: status, expertise, relationships, the quiet influence that builds up over time. You might just trade visible power for invisible power.

That doesn't mean it's pointless. It means structure alone won't save you. Whether you run a flat organization, a holacracy, or something in between, guarding against shadow hierarchies is ongoing work. It takes vigilance, a willingness to name informal power when you see it, and the courage to step in before the Satrap's court is fully built.