Here’s What Is Missing From Your Organizational Structure
Remember when your organizational structure used to be something we hardly thought about. They were clear. We reported to someone (my boss) and often someone reported to us (my team). But things change. Now we have matrix structures, project teams that pull people into hidden conference rooms (that suck life and time from our schedules), leaders come and go and the boxes on the organization chart get shuffled around with little input. And that is just for the folks in your building. What about in different regions, nationally, globally? Sound familiar?
It is a mess.
Ever ask for the most current organizational chart? They just don’t exist. Oh, don’t ask HR for a copy. They are probably three years out of date (sitting next to the obsolete job descriptions), with lots of names of folks who don’t even work at the company anymore.
Having an updated organization chart is nice. But the real issue is how to get work done. Who is ‘really’ responsible? And most importantly, who is ‘accountable’? Who makes the decisions when things go wrong? What about when a change or something happens that no one thought of?
Sound familiar?
Organizations today are wrapped up in transforming themselves. Digital and business practices are changing wholesale around us. But what about how people work together. The underlying structure?
Ask yourself, when was the last time your organization evaluated the effectiveness of its overall structure? How confident are you that the way your organization is structured is the most efficient to drive your strategy? Does the way work it’s structured make it easy and logical for new people or does it slow down ‘ramp-up’ time?
Many companies have recently restructured, reorganized, or shifted the organizational design. And almost 100% of organizations regularly invest in improving their processes, customer experience, and products or services. Funds seem to be poured into technology and digital transformation every day, yet many company’s organization designs are stuck in the 1950’s.
- Do you suspect that your organization design is holding you back?
- Do silos and complex matrix structures deliver the results you need?
- Are departments fighting for resources?
- Do functions collaborate to solve problems across political boundaries?
- Do leaders compete with one another, rather than focusing on the competition?
Often, organization structure is a blind spot resulting from a collective focus on technology and transformation. We tend to focus on changing HOW the underlying activities and work is accomplished while rarely asking foundational questions like … “Is the business even structured to leverage the digital investments and optimize the contributions of the employees?”
The reality is that organizations are perfectly designed to achieve their current results. If your business is missing its growth goals… Costs are still too high… Competition is grabbing share… The latest ‘transformation’ effort is eating resources at an increasing rate…
…There is something missing!
Any change in your business requires you to re-evaluate the organizational structure and confirm that what is in place will work after all the change has been implemented. Here are two most common responses when looking at structure:
- Human Resources and several members of the executive team huddle in a closed conference room, sometimes for days or weeks. A ‘plan’ is created, communicated (mandated), and people are told the new box they will inhabit on the organizational chart. PERIOD. Good luck!
- Hire a BIG consulting firm to do an assessment and ‘benchmarking’ of your competition. After 4-6 months and high six and even seven figure costs, you implement. Only to spend the next year ironing out the resulting chaos. Time that should be spent serving the customer, engaging your employees, and growing your business is spent trying to figure out which end is up.
Imagine a different approach.
Fundamental to all business and digital transformation are shifts in the business and customer experience paradigms. This change is evident, accepted, and embraced. A similar approach is needed for organizational design. We need to evaluate and put in place structures that allow paradigms to change not just once, but continuously as transformation keeps evolving all around us.
This is called ‘adaptive organization design’. It is a leap forward in how organizations are designed. While the 1950s-2000s focused on efficient structures, adaptive design recognizes that ‘work’ is and continues to be automated. Cost is no longer a primary concern as it was in the last century. Cost is being automated and is becoming less and less a strategic differentiator. As a result, the ‘old’ structures focused on cost efficiently are no longer relevant. It’s not that cost is no longer relevant, but today it is a ticket to entry. The primary focus must be on growth. Without growth and market share, being the most cost-efficient player is irrelevant.
Adaptive structures take organizations to the next level by focusing on designing your structure around the business ‘capabilities’ that are needed to deliver your business strategy. A strategy based on profitable growth, differentiation, and customer experience. Adaptive design addresses and eliminates ineffective structures by addressing:
| Old Paradigm | Adaptive Organization Structure |
|---|---|
| Hidden and competing agendas | Focus leaders and managers around a common set of metrics that drive both individual as well as customer delivery goals |
| Lack of leadership and organizational alignment (leaders are not clear, nor are the employees in their role to deliver the strategy) | Get everyone in the organization on the same page, at the same time to leverage resources to achieve the strategy, not sub-optimized goals |
| Competition for internal resources | Resources are invested in building and closing capability gaps needed to deliver strategy. everyone gets and supports this … growth, differentiation and market share |
| Non-strategic leaders in critical roles | Leaders are equipped to think strategically and operate tactically |
| Inability to leverage synergies | With alignment comes the ability to extract synergies, naturally. Not as a forcing function |
| Transformation of processes, experiences do not yield the desired value | Transformation requires internal adaptability to shift with the current and next set of inevitable change |
Would you like to figure out how being intentional about organization design can improve the results of every existing change and transformation initiative and ensure that the investments you are ALREADY making drive your strategy? Call us. It’s what we do. And it takes weeks, not months.