A case against hierarchy

Re-reading Mastering the Art of War, I came across an excerpt from The Masters of Huainan:

In it, a lord asks his minister about the fate of another nation, and learns that it was destroyed through repeated victories in repeated wars. He voices his surprise, for victories are a good thing, thus prompting the minister to remind him:

"Where there are repeated wars, the people are weakened; when they score repeated victories, rulers become haughty. Let haughty rulers command weakened people, and rare is the nation that will not perish as a result."

Once again, there is striking similarity between the martial domain and that of business.
Think of a manager in a hierarchical organisation, successfully delivering project after project; yet without time for reflection and calibration.
Soon, he will rise to heroic status within his company and with growing responsibility grow estranged from those who work with him.

At the same time, his project teams won't have time to re-build their mind, their spirit and their tools - pressure is too high to take time for that, and slowly, they start to believe that there actually are more important things to do.
Over time, they will even come to believe in the manager's (and by extension, their own) invincibility.

They won't stand in for their needs, instead voicing their oppositon only among themselves - if at all, and even if they do, nobody will listen to those arguing against success.

With no one to correct or support him, the manager will fail at last, and - by definition - in his most important project yet.

In this, I see a strong point for eschewing hierarchy. Leadership should emerge ad-hoc, from the person, not the position. Thus, all are constantly reminded that everyone contributes equally to a shared success, that thinking, planning and action are parts of the same.
As a team, people grow together, fail together, learn together, with no room to grow haughty, to grow estranged or weak.

Did you see examples for this in your work? Did the contrary happen? How did you handle it?