Is Your Company Structure Helping or Hurting Your Bottom Line?

The formal organizational structure of your company is one of the most important, and often most overlooked, issues that can severely impact operations.

Let’s expand on some of the best results of having an excellently tailored organizational structure:

• Activities are well coordinated, resulting in smooth and timely completion of objectives
• Not having the reports stack up for superfluous work, duplication, and overlap
• Every person in every department, from fledgling to veteran, has a clear understanding of their tasks, function, and responsibilities
• Individual merit is more clearly notable, and paves the way toward quality promotion
• Conflict, both interpersonal and jurisdictional, is kept to a minimum
• Strong senses of working as a team and belonging result in high morale

Overview

There are two basic types of structures:

Lateral

A more open field, lateral structuring occurs most often in higher executive circles, upper government, and highly creative environments. This method boasts an expectation of competence in each of its members, as they work fluidly and synergistically toward well-defined objectives.

Horizontal

The most common by far, the horizontal structure utilizes a top-down hierarchy and often has strict lines of duties, communication, reporting, divisions and departmentation.

Reevaluating your methods of operation and revisiting your strategies is a task you’re all too familiar with, given the last major economic upset and the continual rippling effects of globalization. When an executive decides to pull the trigger and change the overall strategy of their focus from marketing, for example, and shift it towards competitors or products, she or he well knows the gravity of such a call. So before you make it, ensure that you’ve taken in the full scope, the big picture. And be well aware that the old hierarchy may well not align with new objectives.

The Takeaway

To recap the major points:

1. If the strategy changes, the structure has to change with it.
2. When your company structure is misaligned with your objectives or muddled at the bottom, a wrench is living in the cogs. No company can long operate with internal contradictions.
3.  Know your people. Your company divisions are only as good as the people running them, and personality types clashing with job descriptions is a sure recipe for inefficiency.

The clever executive knows their organization from the bottom up, and works to ensure the best possible structure for their company, their partners, and their shareholders. Executive and Organizational coaches are an excellent resource to help build and develop your knowledge of this very important business dynamic.

By Fred Coon, CEO

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