"We really do need to get organized around here!"

Thoughts on Organization

Imagine a meeting of all the employees in an organization. Their task is to describe the current, published, formal organization structure for the company. They do the task, the result of which is a straightforward, standard "boxes and lines" organizational chart.

With this typical hierarchical structure mounted with push pins on the wall of the conference room, the group is asked to accomplish another task - using red yarn, depict - by 'connecting the dots' - the functions, positions, and individuals with whom you work most of the time in order to get your job done.
The result: a confusing mess!

My experience suggests that the formal structure of most organizations has little, if anything, to do with the way work actually gets done in the organization. Whether it is the traditional hierarchical structure or a functional structure or a product-based structure, strategic business units, matrix, or whatever - the people within the organization figure out how to get their work done in spite of the formal organizational structure

Criteria for an effective organizational structure

  • Purpose of any structure
    Getting the right people together to do the right work and to do that work right -costs, timing, quality, design, delivery, etc.
  • The "customer flow" concept
    Every employee has a "supplier", someone who provides something to them - a part, a report, data - with which they do something - assembly, review, edit, decide - and then transmit to their "customer". [The "customer" may be an internal customer - someone else in the chain of events - or the external customer, the person who acquires the product or service of the enterprise.]
  • Personal responsibility
    The organizational structure and process ensures that each individual employee is expected to demonstrate personal responsibility and accountability. "You are expected to do your job without 'mommy' and 'daddy' making sure that you do so!"
  • Core processes of the business
    Every organization has a small number of core processes, which must take place effectively in order for the enterprise to be successful. What are those core processes for your organization?
  • Governance
    The realities of competing in a warp speed changing global marketplace suggest that organizations must function in an interdependent manner. Appropriate processes of governance -problem solving, strategic planning, decision-making, authority, etc. - as well as supporting interdependence and personal responsibility
    and accountability must be in place. "Silos", "fiefdoms", independent/non-integrated units, "it's not my job", etc. just will not get the job done!
    Summing up

    Right, right, right-----------
    Customer flow --------------------
    Personal responsibility-------------
    Core processes ---------------------
    Interdependence ------------
    Appropriate structure
An example of an "appropriate structure"

Using the five criteria outlined above, one might want to examine the concept of "natural work groups".

Teams can become one of the most rigid forms of organization ever conceived. In addition, all 'authorities' on teams suggest that executives in top leadership and management position cannot be expected to function as a 'team'.

A really well functioning team has - consciously or unconsciously - a single driving force which is to stay together as a team! What happens when the demands of the customer of the team change (and they will change) and that change requires that the size and/or composition of the team change?

It the demands of the customer suggest the team reduce its size; the members of the team will be reluctant to "down-size". What happens when a team - a well-knit, tight group, needs to add one or more new members? How long will it take for the new members - outsiders - to become fully functioning members of the team?

In 'natural work groups' people know from the outset that the composition - in size and 'mix' of capabilities - will change as the needs of their customer change! When the needs of the customer change - and they will - the group is expected to and will change!

Fences' are the boundaries or limitations upon the autonomy of natural work groups. Every job, including the CEO, has a set of boundaries or limits within which one must operate. Every natural work group must have a realistic set of 'fences', which provide them the autonomy needed to do their job.

A recent study of middle school children provides excellent insight into the value of and empowering nature of 'fences'. The behavior of students in two middle schools - one with a fence around the campus and the other without a fence around the campus - was studied.

At the school without fences, the children huddled close to the school building prior to classes beginning and during their recess period. At the school with the fence around the grounds, the students played away from the school building, almost as far out as the fence!

CAVEAT: When setting 'fences' for groups, start tight and loosen up as the group demonstrates its ability to take on and responsibly handle more responsibility.

Not the other way around. If we start "loose" and have to tighten up because the group is not yet prepared for the responsibility, people will feel that they have been "set up"!


Work with each natural work group helping them understand how they will ultimately function - expectations, fences, etc. For each natural work group, help them develop their own plan that will enable them, over time, to migrate to where they are intended to be. Help the group members understand the ultimate objective and ask them to develop their proposed plan and timeline for achieving that objective

Since, ultimately, most of the duties/roles carried out by a traditional supervisor or manager will be carried out by the group, the natural work groups must take upon themselves the accomplishment of those duties.

The concept of "operation support roles", or OSR's, seems to be effective. OSR roles might include:
  • accountability
  • scheduling
  • quality
  • safety
  • information, communication
  • training and education.
OSR roles are rotated among the members of the natural work group. In other words, every member of the group will have her/his "turn in the barrel" in one or more of the OSR roles. Rotation of the OSR roles has three major advantages:
  • precludes the emergence of a "closet" supervisor. Appointing permanent' team leaders' eventually leads to behavior on the part of the team leader that "looks like a supervisor". In addition, permanent team leaders relieves individual group members of personal responsibility.
  • Creates understanding of the whole of the enterprise among all group members - not just the 'boss"
  • encourages more cooperation and understanding among group members and less "static" to incumbent OSR's since "my turn is coming".
  • Providing group members with what they need to function - information, knowledge, support, procedures, 'fences' - requires constant attention and energy. A "one time" training program is not enough.
  • Teach people how to form and re-form themselves as a fully functioning group quickly!
  • Group members require the skills to deal with the inevitable interpersonal conflict that will occur without the ability to go to the boss to solve the issue.

Interestingly, the concept of natural work groups grew out of discussions at the top of an organization. Working as a coach and adviser to the CEO and a few other top executives, we were discussing the growing pressure from the rest of the organization to "do something about the organization structure which is getting in the way".

This FORTUNE 500 Company was in the midst of a major transformation with dramatic change taking place throughout the organization. The leaders, wisely, had concluded that they would lead the process of change by addressing, as needed, what those who had to do the work identified as barriers to progress.

As we began the discussion about "what to do about the organization", the criteria discussed earlier emerged. I then asked these executives to tell me the core processes required for the corporation to be successful. The quickly identified only three: creating demand for products and services, producing those products and services, and supporting those who were creating demand and producing products.
Trying to sketch what had been discussed without doing so in traditional 'boxes and lines', three circles were drawn.
  • Sales, marketing, customer service, etc
  • Manufacturing, engineering, materials/logistics, etc.
  • Legal, finance, human resources, etc.
Each of these circles became a 'natural work group' charged with fulfilling the needs of their respective customers. Each circle would be 'team led' and individually 'managed'.

'Team led' meant that overall goals, strategic direction, annual plans, manpower allocation, budgets, etc. would be determined by the group by consensus. Once these decisions were made, each member of the group was then charged with the responsibility of 'managing' their effective execution of those goals and plans within his/her specific plant, department, or function.

That work addressed a major portion of the goal. But what about interdependence? The three 'circles' were then formed into a figure not only symbolizing interdependency but also demanding it.

Interdependency, long term strategy, integration, overall corporate goals and budget, etc. were 'team led' by what became known as the "leadership and strategy council". The leadership and strategy council of LSC is composed of seven members: five representatives, elected by their peers, the CEO, and Chief Financial Officer.

The entire organization is organized around the concept of 'natural work groups' with clear responsibilities and 'fences'. This concept is still in place with minor modifications, to take into account the dramatic growth of the company, since its inception ten years ago!

Returning to the criteria for an effective organizational structure
Right, right, right
Customer flow
Personal responsibility
Core processes

the example described emerged as the 'right' thing to do for that corporation. Was it easy? Of course not. Is it working? Yes!

It is successful because it:
  • is based upon mutually agreed-upon criteria
  • involved those who have to make it work in its development
  • is responsive to the ever-changing global marketplace.
In my experience almost any form of organization can be made to work.
" Making it work" takes a lot more energy, time and resources if the form of organization is, in its 'real world' application, inconsistent with how the work of the organization actually gets done.

Experience lesson: if we go about 'reorganizing' in the right way, leaders won't have to make it work!