Axa insurance group is the first major Swiss company to remove titles from its organisational charts, abandoning the hierarchical structure of its employees.
Is hierarchy essential to the smooth running of a company? The pyramidal organization developed during the Taylorist era to optimize worker productivity is increasingly being questioned.
And for the 4,200 Swiss employees of Axa Assurance — whose Swiss subsidiary of the French group made a turnover of 5.6 billion Swiss francs (6.6 billion dollars) in 2022 — this model is no longer relevant. At the beginning of 2024, all titles will be removed from the organization chart and business cards of the company which insures 40% of Swiss companies, as reported by Swiss media outlet Blick on Tuesday, which spoke to Axa’s head of human resources, Daniela Fischer.
“We had already started to abolish privileges for executives. Titles and other status symbols only serve to promote outdated hierarchical structures that no longer correspond to today’s corporate culture,” Ms. Fischer explains to the Swiss media.
Levels of responsibility rather than hierarchy
The French firm’s aim is to develop a work organization in which everyone meets “as equals,” where employees can contribute to the company’s benefit at meetings, regardless of their position. The company will continue to have different requirements for each of its employees, but instead of hierarchies, there will now be “levels of responsibility.”
“The abolition of titles fits in perfectly with the rapidly changing world of work. It opens up completely new organizational possibilities, says Fischer, so responsibility is spread over more shoulders. Of course, Axa is not run democratically, but the individual teams and employees have far more decision-making power than before.”
The vast majority of employees agree with the change in culture at Axa. “Out of 4,200 employees, only four have not yet signed the new employment contract,” explains the head of human resources.
The distribution of bonuses will also be regulated in a much more transparent and comprehensible way, and will be precisely defined in the employment contract. “The amount of bonuses will be the same for all employees at the same level of responsibility,” she adds.
A coherent approach to today’s challenges
Organizational structures define the way in which work is carried out within a company. In recent years, many companies have abandoned traditional hierarchical structures in favor of flatter, more flexible models. This has been driven by a number of factors, including the need to respond quickly to market changes, the desire to encourage innovation and the need to remain competitive in a global economy.
So, is horizontal management becoming the norm? Other French companies, such as Castorama and Danone, have already taken the plunge. “Horizontal management offers a toolbox for managers and executives wishing to adapt their practices to the challenges of our time,” explains Bernard-Marie Chiquet, horizontal management specialist at Bpifrance Le Lab, an innovation research center of French public investment bank Bpifrance.
By adopting this form of organization, employees gain greater autonomy and feel freer to express themselves or show initiative. “An employee who manages their role as they see fit will be much more effective and committed than someone who works under the supervision of a manager,” says the Lab Bpifrance expert.
This type of organizational structure in companies helps to improve the well-being of teams by giving responsibility to all employees. Unlike vertical management, the horizontal system focuses on collective intelligence and develops a creative and stimulating working environment. According to Bernard-Marie Chiquet, companies that have tried this type of horizontal governance report that they have gained in innovation culture and feel that they have increased their ability to cope with change.
“The abolition of titles only has an effect if it is genuine”
But this form of management is also open to criticism and may have its limits. Adopting it can take time and destabilize employees who are used to operating within a pyramid model. “It is not possible to move seamlessly from a model where the subordinate relationship governs all relations between managers and employees, to an organization where self-management is at work,” concludes Bernard-Marie Chiquet. In addition, the horizontal structure fosters a certain idea of consensus, which makes decision-making longer.
“The hierarchy of responsibilities responds perfectly to the desire of the younger generation to get things done as quickly as possible in the company,” explains Heike Bruch, Professor of Leadership at the University of St. Gallen and a specialist in new forms of work and the attractiveness of employers, interviewed by Blick.
However, Bruch warns against the risk of experienced workers defecting: “For some people, it’s still very important to have a title. As motivation, but also as proof that they have achieved something.” She adds that the abolition of titles only has an effect if it is genuine and if the culture genuinely favors cooperation and less hierarchical leadership. “If the changes are limited to the surface, they are demotivating for everyone involved,” she concludes.
