Organization Structure

Organization Structure (4)

Motivation at work may actually have more to do with how tasks are designed and managed than with the personal dispositions of people who do them.11 Hackman and Oldham

Teams, rather than traditional structures, create the conditions that motivate people. Many organizations today have policies, structures and management styles that perpetuate a work environment out of alignment with current employee needs. Past management practices and past leadership styles are still being applied, even though they are not in touch with the needs of the employees. Teams, rather than traditional structures, create the conditions that motivate people. 14

What do I do on Monday morning?

Starting with January the 1st, What do I do on Monday morning? lays out a template for performance improvement in sequenced and practical daily actions and advice. It covers the 10 essential components and systems necessary to optimize people's performance and contribution. Each month we cover a different component and in October we are covering the component of organization structure.

The overriding feature of the modern team-based structure is that it is designed around empowered teams responsible for autonomous outputs, rather than any functional or historical considerations. This structure is also characterized by the elimination of reporting levels and the simultaneous acceptance of additional responsibility by team members. Unlike the matrix structure, the teams and the overall structure itself is permanent. 15

Organizations used to be perceived as gigantic pieces of engineering, with largely interchangeable human parts. We talked about their structures and their systems, of inputs and outputs, of control devices and of managing them, as if the whole was one large factory. Today the language is not that of engineering but of politics, with talk of cultures and networks, of teams and coalitions, of influence or power rather than control, of leadership, not management. 13 Charles Handy

Honda organizes by teams, not by functions. The team approach is used in everyday activity, not just on the production line. Each of the team members is multi-skilled. Every team has a leader. There is no gap between labor and management ... Empowerment and ownership are real, not slogans. 16 Bill Creech 

The advantages of a modern team-based structure include:

  • It is based on the sound logic of the core value-adding systems of the organization and is therefore easily understandable (eg team 1 for process 1; team 2 for process 2 – the flow follows function).
  • The flat structure eliminates managerial levels thereby facilitating communication.
  • The total number of people required is usually fewer than in traditional structures.

It is the best structure for obtaining a clear definition of outputs, performance measures and targets; and for reaching the targets. This, in turn, facilitates workforce empowerment and job satisfaction together with technical results. 17

Quality control is one thing. People control is another. The first we all need. The second nobody needs. We do need new structures and a new attitude that, I hope, will take us further toward using the talents and skills of everybody. Times have simply gotten too tough for any company to allow even the slightest amount of talent or skill or knowledge available to go to waste. 10 Kerm Campbell

True ‘freedom’ is not the absence of structure – letting the employees go off and do whatever they want – but rather a clear structure that enables people to work within established boundaries in an autonomous and creative way. 12 Rosabeth Moss Kanter

What do I do on Monday morning? has been designed as a daily reference guide for improving the organizational performance of your business using the proven Sacher Associates systems. Published in Australia and globally it is now in its third print edition.

I have written this work not to teach people what they do not know, but to remind them of what they already know and is very evident to them. You will find in most of my words only things which most people know and concerning which they have no doubts. But to the extent that they are well known and their truths revealed to all, so is forgetfulness in relation to them extremely prevalent. M.C. Luzzatto

Yet today, a great divide is evident in both the public and private sectors worldwide. Those organizations that are not creating a work environment that provides total stakeholder satisfaction are being outperformed by those that can.

In the past, organizations could survive in poor work environments and without regard to employee needs or total stakeholder satisfaction which includes the satisfaction of worker needs. Yet today, a great divide is evident in both the public and private sectors worldwide. Those organizations that are not creating a work environment that provides total stakeholder satisfaction are being out-performed by those that can. To survive and thrive in the future, organizations have to be restructured in line with a better understanding of how organizations work and redesigned to accommodate the changing values and rising expectations of employees. Organizations need to adapt to the changing values and expectations of their stakeholders. This means the successful implementation of the basic components of team performance. 7

What do I do on Monday morning?

Starting with January the 1st, What do I do on Monday morning? lays out a template for performance improvement in sequenced and practical daily actions and advice. It covers the 10 essential components and systems necessary to optimize people's performance and contribution. Each month we cover a different component and in October we are covering the component of organization structure. A diagram of the 10 essential components of team performance and the systems of which they are a part appears at the end of this article.

This week I am covering what to do on Monday morning the 3rd of October to the 9th of October.

4th October

Perhaps the most important principle on which the economy of a manufacturer depends is the division of labor amongst the people who perform the work. 1 Charles Babbage

5th October
You better be lean before you play these games. 3 Jack Welch

The purpose of the organizational structure is to provide a framework for achieving the predetermined long-term goals or strategy of the organization. Many organizations are structured in a way that no longer supports the business strategy. The structure often does not accommodate opportunities or deal with threats arising from the internal or external environment, nor does it adequately provide for the achievement of the organization’s outputs and targets. There is no doubt that organization structure affects the levels of performance that an organization can achieve in pursuit of its strategy. 2

6th October

Traditional organization structures, characterized by strict rules and procedures and repetitive and alienating work, do not meet the needs of today’s employees. Today’s employees need a unified sense of direction, autonomy, variety, feedback on performance, mutual support, respect and scope to develop. 4

7th October

Traditional command-and-control forms of organization that have predominated in the twentieth-century industry are unable to respond quickly and creatively enough to meet the developing demands of consumers and emerging market opportunities: intelligent, networked forms of organization are needed. 5 Thomas Clarke and Stewart Clegg

8th October

There have been warnings of the many problems with the centralized, functionalized, matrixed approach – but they have gone unheeded in even the most astute management circles. 6 Bill Creech

9th October

The competitive advantage

Organizations that can provide a better working life for employees as well as be producing a better quality product for external customers are holding a competitive advantage. The divide is evident in productivity, performance and, in the end, survival. 8

What do I do on Monday morning? has been designed as a daily reference guide for improving the organizational performance of your business using the proven Sacher Associates systems. Published in Australia and globally it is now in its third print edition.

I have written this work not to teach people what they do not know, but to remind them of what they already know and is very evident to them. You will find in most of my words only things which most people know and concerning which they have no doubts. But to the extent that they are well known and their truths revealed to all, so is forgetfulness in relation to them extremely prevalent. M.C. Luzzatto

You better be lean before you play these games. Jack Welch

In our experience, and without any shadow of a doubt, the number one pitfall in organization design is changing organizational structure before the four golden guidelines I cover in this blog have been addressed. The processes contained in the guidelines need to be comprehensively completed before any restructuring takes place.

Golden guideline number one: Verify the capacity of the leader before restructuring.

Determine the capacity of the leader in the area to be restructured before any restructuring takes place. A strong leader capable of supporting and directing a unified team is essential if an organization is to be successfully restructured. The best theoretical organization design in the world will not compensate for a leader who is incapable of delivering the goods, for whatever reason. A good leader with a bad organization design is better than a bad leader with good organization design. Unfortunately, the first refuge of the bad leader is to redesign the organization prematurely, and at an enormous cost in terms of time, resources, lost opportunities, the goodwill of the people directly involved and their capacity to change.

Golden guideline number two: Ensure a unified sense of direction and organization strategy is in place before restructuring.

Implement a unified sense of direction and an organizational strategy that is comprehensive. The optimal structure for the organization would need to be closely aligned with the strategy. This alignment between the strategy, or long-term goals, and the organization structure is essential because as organizational strategies change so too will the organizational structure. The determination of the optimal organization structure will depend directly on its capacity to achieve the organization’s strategy. Therefore it is essential that the organization’s direction and long-term goals or strategies are defined so that the logic of the new structure is clear for all to see.

Golden guideline number three: Ensure outputs, measures, and targets are set before restructuring.

Determine outputs, measures, and targets that are comprehensive. If this step is not completed prior to restructuring, there are no criteria against which the optimal organization structure can be determined. This is especially important if the organization is to be redesigned to optimize teamwork. The overriding feature of the modern team-based structure is that it is designed around empowered teams responsible for autonomous outputs, rather than any functional or historical considerations. Therefore the clear definition of outputs prior to restructuring is essential.

Golden guideline number four: Ensure technical competence before restructuring.

All competence is based on technical competence. The basic skills and knowledge necessary to achieve and survive any structural change need to be determined, developed, planned and controlled before any restructuring takes place.

Perilous pitfall number one.

Attempting to implement structural change before the four guidelines described above are followed will lead to costly errors. The quote by Gaius Arbiter back in 65 AD is apt and universal:

We trained hard, but it seemed every time we were beginning to form teams we would be reorganized. I was to learn later in life that we tend to meet every situation by reorganizing, and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralisation.

I conclude with a quote from Winston Churchill:

First we shape our structure, and then our structures shape us.

Detailed references and additional information can be provided on request, and questions are welcome. This email address is being protected from spambots. You need JavaScript enabled to view it.

 

You better be lean before you play these games. Jack Welch

First, we shape our structure, then our structures shape us. Winston Churchill.
The purpose of the organizational structure is to provide a framework for achieving the predetermined long-term goals or strategy of the organization.

Many organizations are structured in a way that no longer supports the business strategy. The structure often does not accommodate opportunities or deal with threats arising from the internal or external environment, nor does it adequately provide for the achievement of the organization’s outputs and targets. There is no doubt that organizational structure affects the levels of performance that an organization can achieve in pursuit of its strategy.

In the past, organizations could survive in poor work environments and without regard to employee needs or total stakeholder satisfaction which includes the satisfaction of worker needs. Yet today, a great divide is evident in both the public and private sectors worldwide. Those organizations that are not creating a work environment that provides total stakeholder satisfaction are being out-performed by those that can. To survive and thrive in the future, organizations have to be restructured in line with a better understanding of how organizations work and redesigned to accommodate the changing values and rising expectations of a new generation of employees.

Organizations need to adapt to the changing values and expectations of their stakeholders. This means the successful implementation of the essential components of team performance. This month we are talking about organization structure - as Bill Creech said: There have been warnings of the many problems with the centralized, functionalized, matrix approach – but they have gone unheeded in even the most astute management circles.

Organizations that can provide a better working life for employees as well as produce a better quality product for external customers are holding a competitive advantage. The divide is evident in productivity, performance and, in the end, survival.

Many organizations today have policies, structures and management styles that perpetuate a work environment out of alignment with current employee needs. Past management practices and past leadership styles are still being applied, even though they are not in touch with the needs of the employees. Teams, rather than traditional structures, create the conditions that motivate people.

The overriding feature of the modern team-based structure is that it is designed around empowered teams responsible for autonomous outputs, rather than any functional or historical considerations. This structure is also characterized by the elimination of reporting levels and the simultaneous acceptance of additional responsibility by team members. Unlike the matrix structure, the teams and the overall structure itself is permanent.

The advantages of a modern team-based structure include:
  • It is based on the sound logic of the core value-adding systems of the organization and is therefore easily understandable (for example, team 1 for process 1; team 2 for process 2 – the flow follows function).
  • The flat structure eliminates managerial levels thereby facilitating communication.
  • The total number of people required is usually fewer than in traditional structures.
  • It is the best structure for obtaining a clear definition of outputs, performance measures and targets; and for reaching the targets. This, in turn, facilitates workforce empowerment and job satisfaction together with technical results.

Achieving the optimal organization structure begins with a question: Given a blank piece of paper and all
the developments in technology, information systems, increased understanding of human resources,
quality principles and the importance of the customer, how would we change our structure today to best achieve total stakeholder satisfaction?

The ideal structure would best suit the goals of long-term productivity gains and the needs of all employees in view of their changing values. The focus must shift to the creation of an environment where employees want to deliver results. This can be achieved by giving people what they need. And what people need is a sense of belonging; a unified sense of direction; meaningful work; challenge and goals; feedback on the results of their work; and an environment where contribution and excellence are encouraged. In short, the essential components of team performance must be embedded in the organization.
It is our contention that there is no one organization structure that is best. The best approach is a contingency approach; one which, ignoring dogma, determines the best structure in terms of the following criteria.

What structure is:
  • best able to support or continue to support the overall business strategy;
  • best able to accommodate the opportunities and deals with the threats arising from the internal and external environment;
  • best able to achieve autonomous outputs, measures, and targets;
  • best able to satisfy the current needs and values of all employees?

Detailed references and additional information can be provided on request, and questions are welcome. This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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