Every organization is made up of unique individuals who want to express themselves and make their voices heard. They don’t want to be put in a box, or a category, or work in an organization that is so structured it stifles their ability to grow. However, the idea that employees can’t thrive in a structured organization is inherently flawed.
A strong organizational structure is what makes the grouping of individuals greater than the sum of its parts. Just as a super star team of athletes with their own diverse talents, can’t take the field and win without a specific playbook, coach and organized lineup, a team in the business world has to be organized in the right formation to succeed. You need to find a way to organize your team so that each individual is able to focus on their craft while also having the support they need from their team to get things done. We often feel like organizations are too regimented. But if properly done, it’s the only way to move mountains.
Ultimately, you need to organize your teams as simply as possible, and maximize accountability, communication, and overall quality of the end deliverables. But it is never as simple as the classic “org chart” would have you think. No team works in a silo. Teams are responsible to each other vertically as well as horizontally. How do we minimize these complexities so we can keep teams focused on the larger goals?
Designing an Organization to Win
In my experience I’ve found two concepts particularly helpful in designing effective organizations – :
1. Develop Cross-Functional teams: Start by organizing your teams by function, then organize “out”. Teams should be grouped first by their core craft. In the software development world this might mean by deep domain specialty like Program Management, Development, Test or Operations. If you take a broader view of an organization, this means IT, Engineering, Marketing, Sales, HR and other departments. People are able to work with others in their same expertise, and then form cross-functional teams as necessary so that each functional team can contribute to the finished product. These cross organization formations can be organic and temporal per the needs of the project and the company strategy. In a software development setting these are the atomic units of work or feature teams.
2. Get in Shape: The shape of an organization can speak volumes about its effectiveness. An ideal shape is one that maximizes for individual contributors and high velocity. The shape should also optimize for a broad base in which new entrants to the workforce form the foundation. The ideal geometry of this shape is an acute angle triangle. In some organizations “flat” is a concept that means individual contributors are empowered and accountable but in reality, a flat structure leads to teams spreading out until they are no longer effective. I’ve seen too many teams grow their manager levels as a consequence , creating organizational shapes that resemble a multi layered isosceles triangle or sometimes even worse, an inverted trapezoid with more mid-level managers than entry-level employees. The acute angle triangular shape is what’s most effective in fostering a broad base of new entrants with the fewest layers between the bottom and the top.
Once you’ve identified how your team is currently structured, here are some steps to successfully redesign and manage the new right organizational shape:
1. Clarify the Playbook: Define the new organizational geometry, and ensure everyone understands why it’s important to readjust. In my experience, the benefits include clarity on vision and roles (fewer layers mean less obfuscation of the core strategy), cleaner lines of communication and accountability, and more efficient workgroups and operations.
2. Game Plan: To get to an ideal organizational shape quickly, focus on moving two metrics: the Span of Control and Number of Layers. These are the two more important elements of changing organizational geometry.
- Span of Control is the average number of direct reports that managers have on a team (this metric should be high, somewhere between 6-10 depending on your organization)
- Number of layers is the total number of management strata. This number should be as low as possible
- Target 85-90% of the team to be Individual Contributors
- As you scale-up the team, focus on making excellent entry level hires and build a strong base – an imperative for a strong team. This base strata should be the largest population in any organization. Without this organizations can decay in effectiveness over time.
3. Recruiting New Talent: Each new addition to the team impacts the overall geometry. Be smart about making hires that meet the needs of your new structure.
4. Analyze Constantly: After hiring the best, keep an eye on how your team is performing on a monthly or quarterly basis. I always look at early indicators like trend and % of regretted attrition (exit rate of top performers). A lower number and a reduction in slope of the curve is a good sign.
5. Communicate: As changes begin to filter through organizations, the best rule of thumb is to communicate more than you think necessary – don’t leave anyone on the sidelines! Lessons learned should be shared broadly with the group.
6. Ongoing Coaching: Just as important as setting an initial goal and vision, leaders need to course correct as the team evolves.
At the end of the day, the biggest wins will be driven by organizations that work together flawlessly and focus relentlessly on execution. The most effective structure will ensure your team is able to operate effectively over time and that everyone feels they are able to contribute to the organization’s overall success.