In business, decentralization and organizational flattening typically involve eliminating several layers of management, often leaving managers overwhelmed with as many as a dozen direct subordinates. The U.S. Marines, on the other hand, have pushed decision-making authority down the line while retaining a simple hierarchical structure. The Marines' "rule of three" states that each Marine has three, and only three, things to worry about. In terms of organizational structure, the "rule of three" means each corporal has a three-person fire team; each sergeant has a squad of three fire teams; each lieutenant and a staff sergeant have a platoon of three squads; and so on, up to generals.

From a functional viewpoint, the rule of three dictates that each Marine should limit his or her attention to three tasks or goals. When strategizing, each Marine should boil an infinite world of possibilities down to three alternative courses of action; anything more might lead to confusion. The rule of three results in an organizational hierarchy that might seem extremely narrow and tall since there are typically six full layers of management in between an infantry private and the colonel commanding his or her regiment. However, when the action starts, the layers collapse on an as-needed basis. Marines at all levels begin making decisions in responses to fast-changing situations—without so much as consulting the chain of command. Even privates are expected to take whatever initiative is necessary to complete a mission. Major General John Admire, commander of an infantry division at Camp Pendleton, sums up the Marines' view, "If your decision-making loop is more streamlined than your enemy's, then you set the pace and course of the battle."

The Marines believe that the key to making their organizational structure work is recruiting effective decision makers for lower levels. The lowest ranks are consistently told that their performance not only contributes to the bottom line but rather it is the bottom line. The higher the level of a Marine officer, the quicker he or she is to give credit to the lower ranks. Few organizations make hiring and training of managers as high a priority as the Marines.

Source: David H. Freedman, "Grunts Rule," Across the Board, March–April 2001, p. 13; and David H. Freedman, "Corps Values," Inc., April 1998, pp. 54–56.