Why Flat Organizations Must Be Full of Leaders
Landing somewhere new always brings back echoes of the last time I was there.
As I step into Shanghai again, I’m taken back to my previous visit, when I met Zhang Ruimin, founder of Haier.
During our conversation about the role of leadership, he handed me a small book.
“Read this,” he said, offering me his favorite version of Lao Tzu’s Tao Te Ching.
By coincidence, a few days ago one of our Masterclass alumni posted something striking in our community:
These principles are more than interesting. They’re timeless.
Lao Tzu, the legendary Chinese philosopher, wrote in his magnum opus:
The need for leadership
I’m in China this weekend to attend a Q&A session at the China Organization Evolution Forum.
And while arriving here, in the land of Lao Tzu, I couldn’t stop thinking about that ancient wisdom.
Because this weekend’s conversations will go to the heart of what flat organizations really are.
Not just companies without bosses, but companies that depend on people who lead themselves.
But leading yourself is hard. It demands awareness, discipline, and courage.
It’s also, however, the foundation of every successful flat organization.
The real measure of leadership
The best flat companies (of which many are part of our Rebel Cell network) know that real power doesn’t come from controlling others.
It comes from mastering yourself.
That’s nothing new. It’s precisely what Lao Tzu taught 2,500 years ago.
He showed us that the true measure of leadership isn’t personal excellence, but collective success.
This invites us to reconsider what true leadership means.
It’s not about standing above others but standing firmly within yourself.
It’s not measured by how many people follow you, but by how many people you help stand on their own.
That means that the best leaders aren’t those who shine brightest.
They’re the ones who help others shine at all.
From "leader-led" to "leader-ful"
Despite this ancient wisdom, most organizations still reward those who command and control.
The traditional leadership system runs on dependency: people waiting for direction, approval, or rescue.
These organizations are leader-led. A few lead, the rest follow.
In a flat organization, that system no longer works. Simply because leadership is no longer handed out by title.
These companies don’t run on “follow the manager.” They run on “be your own manager.”
As Lisa Gill beautifully puts it, flat organizations must be leader-ful.
Everyone is expected to step up: to facilitate, to create, to improve.
That is, everyone must practice leadership in their own domain.
It is not easy, but when done well, flat leadership systems become abundant, shared, and alive.
The paradox of great leadership
Lao Tzu captured this shift perfectly in another chapter of the Tao Te Ching:
Lao Tzu understood that the highest form of leadership is invisible service.
The kind of leadership that leaves others stronger, freer, and more capable.
It creates capability in others. It multiplies leadership.
It leaves behind more leaders than it started with.
That’s the paradox of great leadership: the better you are at it, the less people need you.
Lao Tzu wasn’t talking about flat companies, but he might as well have been.
Because that’s exactly what great flat companies strive for: to be full of people who act with initiative, confidence, and accountability.
To be full of people capable of leading themselves.
And to help others do the same.
The future of leadership
When I asked Zhang Ruimin about his own leadership role, he told me:
Lao Tzu would have smiled.
Flat organizations aren’t leaderless. They’re leader-ful.
Full of people who lead themselves, their peers, and their organization.
Flat organizations are not the end of leadership.
They are the future of leadership.
P.S. Want to learn how to build organizations that are truly leader-ful?
Join our Corporate Rebels Masterclass: a six-week deep dive into progressive organizational design and self-management in practice.
