A Circular Organizational Structure is a form of hierarchical structure where senior-level employees occupy the inner rings of a circle and lower-level employees the outer rings. Unlike a traditional hierarchical structure where directives are sent down a linear chain of command, leaders in a circular structure are not considered to sit at the top of the organization.

Understanding circular organizational structures

Instead, they radiate their vision outward from the center of the circle in all directions to every level of management. 

Since the circular Organizational Structure is rather similar in functionality to a traditional hierarchy, the main difference lies in the psychological effect that the former has on the company.

Instead of an authoritarian leaders who shout orders from the top of a pyramid, the circular structure with each level clustered around the leader fosters a sense of inclusivity, collaboration, creativity, and accessibility. 

To that end, the circular structure strives to promote the free flow of information between the various parts of the company.

It does not consider different departments or divisions to be semi-autonomous entities, instead seeing them as part of the same whole.

How the circular structure is embodied in practice

Creating a diagram of a circular organizational structure is the easy part. Embodying the style is more difficult, so here are a few best practices:

Develop onboarding, training, and development programs

New employees should be onboarded with a program that outlines the organization’s values and vision so that the purpose behind their role can be understood.

Training and development should also be available throughout the company without being restricted to particular departments or those with a certain skill set or number of years of service.

To create a culture of collaboration and continuous improvement, employee education should be offered regularly from internal and external sources.

Hire based on skills

The circular structure considers that employees should be recruited for their emotional intelligence and soft skills such as attitude, communication, and teamwork. 

These individuals make superb leaders of collaborative, self-managing teams and if required, training can be provided to address a lack of any technical skills.

Establish an open-door policy

Open-door policies promote the free flow of information around the organization and enable employees to go directly to the source for clarification.

To support this critical component of a circular organizational structure, enterprise social network software such as Salesforce Chatter, Zoho Cliq, or Google Workspace can be used.

These platforms allow teams to assemble in one place and make communication, collaboration, and connection easier and more personalized.

It is important that businesses do not restrict these platforms to work-related content only. Granted, certain rules should be in place to ensure conversations remain appropriate and productive. 

But since the circular structure also considers camaraderie to be important, why not create a channel where employees can chew the fat and discuss fun or interesting topics?

Key takeaways:

• A circular organizational structure is a form of hierarchical structure where senior-level employees occupy the inner rings of a circle and lower-level employees the outer rings. 
• The main difference between a circular organizational structure and others lies in the psychological effect that a circle has on employee purpose, collaboration, creativity, and accessibility to senior-level staff.
• To embody aspects of the circular organizational structure, the company should establish an open-door policy of communication, hire based on soft skills with less emphasis on technical prowess, and establish routine employee training and development.

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