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Organizational Chart Madness, Part 1

When making adjustments to organization structure, consider more than just the functional sensibilities, but also the personal, and especially the communication, elements.

By ALAN NICOL, Executive Member, AlanNicolSolutions

When making adjustments to organization structure, we should consider more than just the objective, functional sensibilities, but also the personal, and especially the communication, elements of our organizations.

The fourth-quarter transition into the first quarter of a new year is a naturally disruptive period for most businesses, filled with anxiety over meeting year-end and fourth-quarter objectives, as well as hopes that the final push will leave the business healthy enough to remove some constraints or otherwise enable some decisions in the first quarter. One of those decisions is often an investment in manpower or additional skills.

The fourth-to-first-quarter transition is a time when many businesses make adjustments to their organizations. Leaders change responsibilities, personnel change teams and, if we are lucky, we add personnel to our growing business.

When we make changes to our organization structures, we tend to consider the infamous org [organizational] chart like a list of resources. We consider our organization objectively. It’s the same mechanism we employ when we make difficult decisions about our personnel in difficult times. We deliberately don’t want make the decisions personal, we want them to be logical.

I’m not the CEO of a business that others seek to model, so I won’t claim to have experience building prize-winning organization charts. However, as an experienced business and process improvement professional, I have witnessed, over and over again, the challenges businesses, leaders and personnel face when the human, and particularly, the communication aspects of an organization are left out of the logic of its construction.

Our businesses are not a trophy case full of prizes, nor are they made up of buildings full of resources. Our businesses are populated with human beings that communicate, deliberate and make decisions. Those individual personalities come together, and develop common behaviors and beliefs, a culture. Therefore, a business is more than a collection of assets and resources; it is an individual organism, with its own unique personality.

The way in which we organize our businesses will enable or inhibit our businesses’ personalities, and can cause them to adjust and change. By all means, we should absolutely consider the functional sensibilities and lay out a logical structure, objectively. But, we should not stop our logical consideration there. Before we publish our org charts, we should apply the same logic to the human and communication elements of the organization.

Briefly, the human elements to which I refer include considerations of personnel growth, matching personnel with leaders for optimal performance and development, and ensuring that leaders and managers are skilled, experienced and capable of their assignments, and considerations of cross-training and future growth. These considerations can affect the performance of your business as much as, or more than, the functional elements.

It’s OK, too, once you have logically matched up personalities and skills with roles and responsibilities to give thought to how all of those personalities are going to feel about the changes and adjustments. Any change is disruptive. Organizational changes can be particularly so. It is wise to give thought to managing and minimizing that disruption.

In more detail, I’d like to discuss the communication elements of organizational structures. Some times, our organizations are built based on responsibility and “control,” but fundamentally, when we look at what a chain of command really is, it is a map of official channels of communication and decision.

Consider that carefully. Those lines on the org chart represent paths of communication, particularly paths of direction. Those lines will profoundly influence your organization’s performance and personality.

Does that seem like an obvious statement or observation? When I write it, it seems like an obvious thing to me, but I have rarely witnessed an organization arranged such that the communication structure truly matched the communicated objectives of performance and behavior.

Here is one example. I worked in an organization that was focused on accelerating product development performance, particularly the speed at which ideas were turned into profitable products. Unfortunately, the organization was structured into deep channels of functional expertise. From the engineer on a project to the leader with the directional authority or significant monetary authority communication took generally three to five steps.

Then, of course, those leaders would have to confer with their peers, who would need to communicate several levels back down to their functional team members on the same project in order to make an informed decision. As you might imagine, communications and decisions concerning important or expensive concerns were very slow. Slow was not the objective. Speed was.

The organizational structure was left over from the prior focus or priority, in my observation, which was to drive consistency of process and behavior. Deep-channel, functional structures are good for tighter control and greater consistency of decision-making and behavior, but they are slow to communicate and make decisions.

Tune into the Chemical Equipment Daily for part two of this two-part series. What’s your take? Please feel free to comment below!