How are we organized to get the work done? The work system is about what we do; the structural system is about who does what. Not uncommonly organizational structure is seen as a hierarchy represented by org charts, and a reorganization/restructuring is but a matter of reshuffling the org charts. Problems with performance? Here are your new org charts; that ought to fix it. We would advocate a more holistic approach that addresses all organizational systems, certainly including structure, but definitely not excluding all else.
Three levels of roles and responsibilities are necessary in any organization: operating, coordinating, and strategic. Not long ago downsizing was viewed as the smart thing to do; flattening the organization so the operating folks could hear directly from the strategic folks without having to play the old party game, "Telephone". Many of the downsizing enthusiasts learned the value of the coordinating level the hard way. Even the smallest of organizations have roles and responsibilities at all three structural levels, where a single individual may juggle all three roles. As organizations grow a rough correlation develops between strategic and executive level, coordinating and middle management level, and operating and the front-line level.
The operating level produces the product and/or delivers the service to the customer. They perform the core process; therefore, the customer cares about and responds to the operating level. People at the operating level are closest to the work and closest to the customer. They have insight into issues that interfere with their work and interfere with their ability to please the customer. Input from the operating level should feed strategic planning. Operators should be responsible, not only for doing their work, but also for improving their work. A recent HBR article, "The Secrets to Successful Strategy Execution" by Neilson, et. al. described the keys to execution as decision rights and information flow, and we would add: to the operating level!
Coordinating-level employees are hierarchically positioned above operators, but ideally they serve in support of the operating level. Individual contributors who get promoted to management positions are expected to amplify their contribution by distributing their know-how to subordinates. Unfortunately, a skilled individual will often find it much easier to do the job herself that to teach someone else how. Managers must be encouraged to teach, mentor, coach, and facilitate the work at the operating level. In addition, the coordinating level has the critical role of eliminating barriers by managing across organizational boundaries.
At the strategic level attention is on the external environment and on the future of the organization. Monitoring requirements and influences in the complex and ever-changing external environment is challenging; adapting to those evolving requirements and influences is even more challenging. This probably explains why so few companies remain at the top of the heap for extended stretches of time. As noted above, strategic monitoring includes open dialogue with the operating level of the organization. We are all familiar with the maxim: bad news does not flow upstream. That cannot hold in a high-performing organization.
In addition to the three levels of roles and responsibilities, structure deals with organizational boundaries. As the business grows there is a need to divide into manageable parts, so boundaries are drawn around geographic segments, customer segments, or product segments most likely. Boundaries also exist around functions, e.g. HR, Finance, IT, etc. Every boundary creates the potential for an us vs. them phenomenon; it is human nature. Therefore, it is incumbent on the high-performing organization to exert effort and expend resources on an effective coordinating level that manages across boundaries. In the words of a past client who was part of a very high-performing organization, "We have boundaries, but they are very low walls."
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