Mark E. Buckley

Organizational Structure

There is one correction that companies can make that will solve most of their problems and save them thousands or even millions of dollars. The answer is having the correct organizational structure.

When companies start out with a handful of people, no one worries about organizational charts, span of management, or work flow efficiencies. Eventually as companies expand they make a few seemingly benign decisions. The thought process might be as pedestrian as "Let's put the loud marketing guys on that side and the quiet accounting folks on the other side." With that one extemporaneous decision management has set about the permanent demarcation of company departments.

Then a few years later you will bring in someone like me. One company I worked for had a visible Mason Dixon line between their Service and Sales departments. The members of the different groups were very hostile to each other, even though it was always in a typical passive aggressive manner.

So what can you do? If you are still small do not make the fatal mistake of dividing your staff according to function. If you are alreading segregating your employees that way then blow it up as soon as possible.

I have worked for companies that have been structured along function as well as other methods. I know that functional divisions do not function.

Why is this so? Well it is not as simple as an efficiency analysis. Yes there can be bottlenecks, needless hand offs, and over zealous CYA activity. But the real issue is more psychological than technological.

Let's say you group your accounting folks together. If you performed a personality profile on the members of that group, you will find that most are the analytic or conscientious type. Also their manager will most likely be from the group and also analytic.

Now you have also grouped your marketing folks together. If you performed a personality profile on the member of that group, you will find most are expressive or influencer types. Furthermore, their manager will also be an influencer, but perhaps with a smidgen of assertive mixed in.

Now as these groups go about doing their work they will not be come less expressive or less analytic. In fact they will develop a culture where their personality type is the only acceptable way for anyone to operate. When confronting someone of a different propensity, the response will be to ridicule the offender's behavior.

If instead you intersperse your analytics, assertive, expressives, and nurturers, everyone will seek a common ground. The marketing folks will be forced to be less obnoxious and the accounting folks will be forced to be less up tight.

Everyone wins because no one wins.

Beyond the psychological issue is a goal orientation issue. By grouping workers around customer segments or products, teams will developed business relevant goals. Functional groups tend to concentrate on their own values and mores. This parochial behavior will sometimes be tangential to the strategic aims of the company.