Picture your company a year from now. Then five years. Then ten. What will your organization look like? Will it be structured the way it needs to be for success? A clear understanding of how the work needs to be done and how communication needs to flow creates the foundation for good work force planning and the creation of strong decision-making structures.
Often the organic growth of a company naturally creates a structure that works. But the unchecked morphing of departments and hiring practices can also result in disjointed responsibilities within positions or departments. When these stress points become obvious and painful, someone inevitably shouts, “We need to reorganize!” But knee-jerk reactions can cause drastic shocks to the organization. By slowing down and thoughtfully evaluating the following structural elements, you’ll make valuable improvements methodically and without drama.
Who’s in charge?
People often take the structure of an organization for granted — until things start falling apart. Before breakdowns happen, take a critical look at the authority relationships in the hierarchy.
- Do they support the best communication and decision-making?
- Does the chain of command support local autonomy?
- Do distant authority figures hinder productivity?
For example, if the team at an oil drilling site needs to make a quick decision in the field, communicating with and waiting for approval from a distant boss can jeopardize operations. But if the chain of command supports them, the team members can proceed based on their expertise and knowledge of the local conditions without a loss of productivity. In this decentralized organizational design, the team structure and a clear understanding of who is whose boss can create a very diverse group of job responsibilities.
In departments like corporate accounting, a centralized chain of command connects experts and those doing similar functions regardless of the geographic location of the individuals or the lines of business they support, providing standardization and efficiencies.
Too flat vs. too tall
Another potential pitfall in a company’s structure is how flat or how tall the hierarchy has become. A clear visualization of your structure can help you spot overtaxed managers or single-branch “stacked” levels of organizational chart boxes with too little distribution of management.
In a “flat” organization, potential issues include:
- Too many direct reports for managers, often of very diverse work responsibilities, which stretch the managers too thin.
- Not enough opportunities for career development and upward mobility.
- Too wide a gulf between the planning and communication requirements of each level in the organization.
On the flip side, a too-tall a hierarchy can waste the flow of communication or decision-making with authority that is sliced too thin — think of bureaucratic organizations that have lots of red tape.
Analyze the flow
If you look at the organizational chart on both a macro and a micro level, you can evaluate whether the structure of the organization as a whole and the structure for each position make sense for the right flow of information and style of decision-making.
- Are there isolated positions duplicated throughout the organization without bosses that can understand their needs — such as software help desk people reporting to nontechnical managers — just so that they can be stationed in the departments they support?
- If decisions are made along the lines of client or product divisions, are teams grouped in reporting relationships due to their geographic location just so that a local boss can watch them work?
Visualization illuminates problems
Making work force data visible and easy to understand facilitates structural discussions. An organizational chart that doesn’t match the reality of decision-making helps pinpoint the choke points in your chain of command. Your organizational chart should not look like modern art that you have to squint at to interpret. Instead, it should be a realistic depiction of the authority structure.
By visualizing how the company is structured and evaluating its current design compared to the ideal, you can pinpoint barriers to positive interactions between departments and positions. Then you are ready to design your organization for a successful future.
Lois Melbourne is co-founder and CEO of Aquire, a work force planning and analytics solutions company based in Irving, Texas. Visit www.aquire.com for more information.