Many of our clients have recently undergone or are now undergoing a series of organizational structure changes, and despite the best of intentions, all too often they find it's time to reorganize again just as soon as the new structure is in place.
This leads to a fundamental point: changing boxes on an org chart seldom changes anything.
We say this because, in the time it takes to vet, announce and implement a whole new structure, the initial impetus for change very often loses its relevance. So organizations repeat the cycle. This can lead to reorg after reorg and change initiative after change initiative... and a stalled organization unable to put down the mirror and look away from itself.
The dynamic of "organizational narcissism" is most problematic when it leads to a lack of external market focus and, ultimately, lack of connection to the customer.
Additionally, internal fixation often creates highly competitive environments in which leaders at all levels come to see success as getting a new position on the org chart rather than producing meaningful business results. It can become something of a game of musical chairs where getting a seat becomes a fierce battle. With each reorg, the frictions grow and become all the more debilitating.
We believe the traditional view of organization structure is at the root of the problem.
Specifically, traditional, hierarchical organization structures -- which are functionally based, geographically based, and/or product based -- have inherent limitations. Most companies have recognized this and created matrixed structures of some kind to overcome the limitations, but in doing so they've found matrix decision-making accountabilities are foggy and things only work when goals are closely aligned and teamwork is at its absolute best.
So what's a better fix? Lately we've been actively discussing the need to build more agile, networked organizations -- organizations in which different empowered nodes share a mission, philosophy and set of high-level beliefs, and then each operates and thrives independent of deep, rigid hierarchy in a manner that brings critical knowledge in from the edges. This is about mindset and capability, not about structure.
Of course, creating a networked organization is easier said than done, so here are 3 "No Regrets" actions to enable flexibility without restructuring:
1. Unbalance the matrix structure. Nearly all large organizations today have some version of a matrix structure because there's a natural need to coordinate functional activities with product or geographic priorities. This creates natural and often unresolvable tensions between centralized and decentralized authority, between functional and geographic authority, and so on. Often, the tension manifests in paralysis or acrimony. The answer is to make the tough call of deciding what one dimension of the structure should be fundamentally dominant and then to grant authority accordingly. Teamwork is great, but when difficult decisions need to be made quickly, it is important that there be clear ultimate accountability -- this is the same reason there is generally just one CEO in a company. Unbalancing the matrix will not please everyone, but will do far more good than yet another reorganization.
2.Create more "soft" structures. Org charts naturally speak to hierarchy. So any time you move boxes on an org chart, you create complexity and emotional reaction. The same goes for moving lots of people amongst the boxes. But there's another, easier way to shift resources and accountabilities in times of change:
