Management best practice of the week: 5.2 Organization Structure

Organization structure is how you get the most from your people, individually and collaboratively.  But these structures have been stressed by furloughs, layoffs, off-site work, and the need to sell and services in new ways. When roles (“job boxes”) in organizational charts disappear or merge, linkages break, hurting delegation, reporting, getting everyone to adapt. But change your chart at your peril:  a completely new structure is only warranted when the entire business practice changes.

Definition: “The arrangement of jobs that lets everyone help each other and the organization reach their goals as efficiently as possible.”

Practice Summary

Common features

  • Leadership roles
  • Decision-making channels and accountabilities
  • Skills placement with performance measures and incentives
  • Work processes and their support systems

First pass:  Groups

  • Functional: Defined by key products and processes.  Often hierarchical
  • Geographical: For larger organization, with a Functional model in each area
  • Program: Services delivery when each has its own operations and support
  • Customer/Market: Meaning, organized by non-geographic market
  • Matrix: Each role is an intersection of geography and program

Second pass: Links (i.e., “dotted lines”)

  • Hierarchical, with typical superior-subordinate management
  • Liaisons, often for information-sharing
  • Cross-unit groups
  • Project management duties

 Common mistakes

  • Structure does not match the competitive strategy
  • Autonomy vs. control mix is incorrect
  • People in the wrong positions for their skills
  • Too many or ill-defined linkages
  • Functions with long term-accountability report to those with shorter-term accountability

Key Metrics

  • Work backlogs
  • Overdue deadlines, including new initiatives
  • Customer dissatisfaction with resolving issues

3 Good Questions (discuss in a management meeting)

  1. Should our organization chart differ from our competitors
  2. When was changing our structure a big improvement?
  3. How long should we take to make organization changes?

Criteria for resetting groups and links include flows of decision-making authority, information and ideas. Get it wrong, and your building will collapse. Get it right, and everyone will feel and see that their time, skills and passion are being used to their full potential.  And that’s the kind of energy and experience everyone wants.