Designing An Effective And Flexible Organization Structure – It’s More Than The Structure Itself

A key element in organization (and work units within an organization) success is its structure – how its work activities are organized; and how responsibility and authority are identified. Structure affects how employees – even at the very top of the organization – execute their responsibilities and authority, coordinate and work with others and achieve organization goals and objectives. Poorly designed structures, including those that do not change as the organization’s work evolves, will negatively affect its operational and financial viability.

The type of structure that works best for one type of organization will not necessarily work for another. Also, as organization strategy and objectives change there should be an appropriate change in structure to align with work efforts to efficiently and effectively achieve your strategy.

As you consider the best structure for your organization – or work unit/division/department – consider the following principles.

• Change Occurs. All organizations, particularly those that are the most successful, viable and vibrant, continually change and evolve. Never look at your organization structure as static and subject to minimal change. Design a structure that can accommodate a substantial amount of change; and when necessary also change the structure.

• Alignment. Your organization’s structure should align with, and support the achievement of, your organization strategy, goals, and operating objectives. The nature of the service or product you deliver, along with related business processes, is also important in determining the best structure.

• Each sub-entity within your organization, e.g. operating units such as finance, service delivery, product manufacturing, and sales, should also be organized with the same principles.
• Levels of responsibility, authority and accountability for work performed should be identified within the structure. These levels can take the form of directors, managers, supervisors, partnership levels, associates, analysts, clerks, etc.

• Grouping of Similar Activities. Activities should be grouped into similar and closely related activities. This facilitates teamwork and sharing of similar and/or related expertise among workers.

• Position and Location Flexibility. The structure may take the form of a pyramid (with your departments, divisions and work units shown as apparently self-contained entities) but that should not prevent the use of human resources horizontally across the organization. Operating policies and procedures, and culture, should support flexibility in applying talent where it’s needed, without significantly compromising operational effectiveness and efficiency in a prior area of assignment. How this horizontal use of resources is managed via an organizational support culture, policies, procedures and incentives is very important to your success. Any decision about where to allocate talent requires an analysis of pros and cons.

• Match Authority to Responsibility. The responsibility assigned to a position should have a level of authority that matches the responsibilities. Many organizations assign responsibility to positions without establishing adequate authority to make the necessary decisions to fulfill that responsibility.
  • The results will be avoidance of accountability, inefficient processes, job dissatisfaction and frustrated employees, to name a few symptoms.

• Direct Reports. The number of employees reporting directly to any one managerial position will depend on the nature of the work performed to a great extent. Routine and repetitive work normally allows for more direct reports than work requiring a substantial amount of analysis which must address may variables.

• Position Description Specificity. Specify as little as possible as to how tasks combine into positions (jobs) and work units; and how people are to interact within and between work units.
  • In a dynamic and viable organization technologies and processes continually change, requiring employees to learn, adapt and change. If position descriptions are too detailed there will be rigidity in cooperation and communication, as well as employee ability to change.
  • The focus of position descriptions should be on expected output, i.e. what is to be delivered internally and externally.

• Organization Home. All employees should have an organization home base such as a work group or division/department. The home base should have a position (sometimes more than one position, but hopefully no than two) at a higher level than the employee who is knowledgeable of the work performed by the employee so that there is effective performance evaluations and professional development guidance; also someone to whom the employee can go if there are work place challenges to be addressed.

• Work Unit Focus. Clearly define that which is expected of work units in terms of performance goals and objectives, and then support flexible adaptations toward the best means by which the work unit can achieve the performance objectives. (Do not over specify.) High performance teams will normally constantly tweak and modify the means by which they achieve their results. They seldom settle on one best way, and only that best way.

• Role of Managers and Supervisors. Managers and supervisors should be resources for an organization work unit, in the forefront of changes that occur and a coordinator across work unit boundaries. A focus should also be to ensure that the work unit has adequate resources.

What Top Management Has To Do. Regardless of your structure or organization it’s important that top management set the tone and lead the organization. It needs to make sure there is cooperation and open communication between work units, divisions, etc., vertically and horizontally; and that there is an overall sense among all employees that they “belong” to the organization regardless of their location in the organization.

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