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Organization Structure

Guest post by: Robert Whipple

Article Overview: Here is a lecture I wrote for a graduate class on Management. It discusses some interesting points about organization structure and how it can impact performance.

Organization Structure

No leader operates in a vacuum. All organizations have some kind of structure. Many have abandoned the classical military hierarchy for a more participatory reporting structure. You can find just about any geometric two-dimensional form to depict relationships within an organization. The circle is often used where various groups emanate from a central hub. Ovals describe loosely linked pods of activity. The inverted triangle is an attempt to show the real power is with the people rather than the bureaucracy. This is the "servant leader" concept described by Ken Blanchardand other authors. This view holds that the leader actually reports to the underlings and supports them rather than the reverse. Gareth Morgan in his book, "Imagin-i-zation"offers many creative organizational structures, even comparing organizations to spider plants. There is always some kind of reporting relationship in play, where some are called to act as formal or informal leaders. The hierarchy may be cleverly disguised as unfocused leadership, but there are reporting relationships in every case.

Most people find themselves in the middle, reporting to someone on a higher level and having others who report to them. All but the very top and bottom have this in common. One can argue the CEO reports to a higher level - the Board of Directors - and the entry level person often has others at home who rely on their leadership. All of us are in a "sandwich," where there are slices above and below. We need to constantly juggle the needs of the other levels while trying to maintain some sanity for ourselves.

The misunderstanding between worker and management is a schism that dilutes the ability of any organization to survive. Each level has the same challenge, trying to interpret guidance from above to those below in a way that does not compromise personal integrity or the needs of the organization. The majority of stress we feel at work is a result of this tension. It is constant, it is mind numbing, and it is everywhere.

This is a great place to test your leadership capability. Outstanding leaders are expert at working the interface between levels. They clarify disconnects upward and interpret decisions downward. They recognize that there is always some tension between the layers, but find ways to keep things under control. Do this consistently and well and you will be among the elite leaders.

Tips to help you improve the interface between levels:

· Thoroughly understand the point of view of layers below you. Listen to input and test for understanding. Be careful to not let the views of the vocal few characterize the beliefs of the silent majority.

· Recognize that many of the desires of levels below you are human nature. What group would not want more pay, more personal freedom, more recognition, more time off, etc. Don't discount these needs, but realize they are universal. Try to find more specific suggestions, and be alert for ideas that can be done without major investment. Often it's the little things that can make a big difference to people.

· Interpreting these needs upward is also an art. Don't be a whiner for your team. Clarify their needs accurately and objectively.

· Internalize the impact of management actions while they are being developed. Make sure top management knows how things will be perceived at lower levels before actions are announced. Avoid sounding negative in these discussions by offering possible alternative decisions or more creative ways of describing them. Ask questions instead of making blunt statements. For example, instead of saying, "They will interpret this as another attempt by management to line their own pockets," you might offer, "Would it be better received if we coupled this announcement with the employee bonus plan?"

· Avoid being a "Chicken Little" in discussions with upper management. Ultimately, you need to support and sell these decisions downward, so work to influence your superiors. Do this from a viewpoint of "what is best for the business," rather than "how to keep the masses from revolting." Senior managers want to do what is best for the organization. They sometimes need help understanding the impact of poor decisions on their own destiny. You can be the voice of reason, but only if you maintain credibility and perspective.

Designing the Organization - Form Follows Function

Rather than just reorganize everybody into another configuration, consider what you are trying to accomplish.

For example, if a key tactic is to drive quality awareness into all production departments, you might consider eliminating a central quality staff or changing their role in the new organization. If a key strategy is to drive quality compliance so all areas have the same standards, you might strengthen the role of a central quality staff. Form follows function.

Avoid temporary or transitional structures. They are a sign of weak leadership and often lead to confusion. People working in a "temporary" mode are inefficient. Energy is siphoned off as people jockey for position in the final order. You can't be effective in that atmosphere. The leader's role is to push for clarity, fit with the strategic plan, and not wimp out with a mushy transitional structure.

When you change organization structure, the old order will be shaken up. Layers may be eliminated, jobs redesigned. Typically, it is possible to remove about half the layers while simultaneously improving productivity, quality, and delivery. This has a double positive impact, as there are fewer people and each one is more efficient. In addition, many problems associated with communicating down a long organizational chain are reduced. There is less confusion and more clarity of purpose. Although layers are eliminated, there is still need for good people who will perform different functions.

Handled well, reorganization can be an energizing experience, but too often it becomes one of the most traumatic times in the change process. Organizational surgery must be handled delicately because it deals with people's careers. Most managers become defensive if they suspect their level will be eliminated. This natural reaction is a major hurdle, and it has undermined many efforts. Transitions of leadership are particularly sensitive and must be made with care. The trick is to continually involve impacted layers, so leaders can make whatever changes are necessary, and yet keep the environment of trust.

A good example occurred in a small, isolated work group in John's Department. He had done some cost benchmarking and needed to make a significant shift to be competitive. He was considering a consolidation of this group with another in a different building. He bounced the idea off the workers and, of course, it was pretty unpopular. Calling all 19 people in the group together, he gave them two weeks to come up with an alternate plan or be consolidated.

John provided a facilitator so the team could meet efficiently to work on the problem. They worked for two weeks while keeping up with production. Finally, they called John and me in at 6 AM one day to report progress. They revealed a plan that, in three months, would improve quality and delivery while reducing the crew size from 19 down to 9 people. They wanted to know if they had our "permission" to do it. I told them it felt like I had just caught the winning touchdown pass in the Management Super Bowl!

They had removed an organization layer and eliminated some straight-day jobs. Everyone had to get additional training and give up some perks they were previously enjoying. In the end, they got down to 10 people rather than 9, but you never saw a more energized and dedicated bunch of people. They owned the change.

One key was that John guaranteed people upfront that we would find good jobs for anybody freed up by the exercise. Without that, the result would have been tepid rather than red-hot. Also, without a trained facilitator to help steer them along, things would have degenerated into a kind of an organizational food fight. This is an excellent use of a consultant: to keep people on task. This example demonstrates the power of another vital tool for change: job redesign. In order to remove 9 people, the group had to change the way all jobs were being done.

Redesign Jobs

An empowered team works differently from a conventional workforce. It is important to recast job functions to work well in an empowered state. This means examining the actual work and flow to be consistent with new capabilities.

Job Redesign must be done with care to cash in on the benefit of higher capabilities. The effort is complex because the organization needs to maintain productivity in the old system while new jobs are developed. The key to success is careful planning and execution. Significant retraining will be necessary as people take on new roles.

Having job redesign become part of teambuilding is a good way to ensure proper alignment. This was evident in the above example. If it occurs as a separate exercise, some later retooling is often necessary.

Design Caution: Avoid the BIG REORGANIZATION

The leader can reduce confusion and inappropriate behavior by not making a huge production of a reorganization. This is costly to the organization in lost momentum and needs to be managed as a part of the change process. Too often we see managers advertise a big reorganization as a thing that will save us, and it will be happening over the next 6 months. People don't see the connection between this and the organization goals, so they resist and play all sorts of games, undermining current performance. G. Richard Thoman, President of Xerox Corporation made that mistake in 1998 when he reorganized the field sales force. Not only did it confuse and demoralize the sales people, it also thoroughly alienated Xerox customers. It led to a nearly complete collapse of the corporation and the speedy ouster of Thoman.

The antidote is to view restructuring as a natural part of a process and not a singular event in a vacuum that will sweep in and fix all the problems. When you see people roll their eyes back and say "we're going through another reorganization," it is a good clue the leader is handling it poorly.

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Article Tags: Leadership, Levels, Moralle, Motivation, Organization, Structure, Trust



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