These days, corporate structure comes in many guises, from the traditional ‘top down’ pyramid approach to leadership and business design, to the more informal non hierarchical approach. But, structure is not necessarily all about the layout of the organisational chart. By necessity, it exists in every business, however ‘relaxed’ the culture. It is the keystone underpinning organisational alignment, accountability and agility, and it is core to the performance of every business.
In this commercial era, it’s fair to say there have never been so many possibilities when it comes to business structure: from the large multi-nationals with their glass fronted HQs to the micro-businesses operating from a spare room or coffee shop; from huge international conglomerates that trade in 50 countries to local producers and suppliers that do all their trade in a 20 mile radius; from a traditional sales businesses with tangible product, to concept selling, service industries and of course the tech market with all the applications and IT engineering needs that support it.
Many modern businesses have grown phenomenally quickly, exceeding all expectations in their performance and reach; others have developed organically and perhaps gone in a different direction than originally planned. Some fail and may or may not be reborn into something new. Company leadership has also undergone transformational change. Until fairly recently, ask anyone to draw the structure of a business and it would inevitably be triangular in shape: a boss at the top, a few senior managers underneath and then the underlings. Not so anymore. In the age of entrepreneurs starting million dollar businesses in complete isolation, digital nomads operating from wherever their path may take them and business partnerships developing online in different continents, the concept of a pyramid structure seems redundant. Even in traditionally hierarchical businesses, the dawn of compliance and regulation has widened the top tier as well; there is very rarely only one person in charge because that’s just too big of a risk. There is a board, a committee, shareholders to consider. No one person makes all the decisions.
Is Structure Redundant?
So, is there still a place for structure in business or do we all just need to go with the flow a bit more? Is structure, with all its bureaucracy and hierarchy just outdated? The answer is that structure does not just mean hierarchy or standardisation. Structure means planning and as such still has a fundamentally important role in building a successful business. The truth is that it is phenomenally hard to succeed in business with no structure at all. Even businesses that claim to have little formal structure but are rather based on mutual trust and interest, still have structure even if it’s incidental. Employment law is such that structures don’t need to be written down to apply: management structure can be implied by what happens on a day to day basis; employment structure can be implied by what happens in practice (and often despite what is written down on paper – Deliveroo and Uber are just a couple of recent cases where businesses have fallen foul of this). So structure exists, even if it’s not planned or formally documented. It’s perhaps then the formality and traditional elements of structure that are now being passed over, rather than the structure itself.
How Does Structure Help Businesses To Perform?
On a very basic level, structure enables businesses to enhance their performance by providing order, process and getting everyone to do what they should be doing at the right times. It also enables businesses to measure just how well they are doing by providing accountability streams so that productivity and output can be measured and assessed. This leads to consequences, whether it’s reward or closer management. Even on a very basic level, structure goes a long way to making businesses perform more effectively. When properly planned, structure delivers much more than this. When we analyse structure more closely, we find there are three main pillars of structure which will enable the organisation to deliver its strategy: alignment, accountability and adaptability.
Firstly, alignment: how far does the organisational design align with the achievement of organisational objectives? Here we are looking at how closely individuals operating in their roles align with the vision of the company: are they truly bought into it? Do they fully understand what the organisation wants to achieve and is it important to them personally? For alignment to exist and for it to support business performance, there needs to be a clear vision as a starting point and it needs to be well communicated with the business as a whole. How can employees become personally invested in achieving business aims if they don’t know what they are? And it’s this investment that leads to employee engagement, a most valuable asset for any business. Alignment is crucial to the success of any business because it provides purpose and human beings perform at a much higher level when given purpose. This doesn’t just apply to large companies with purpose built training programs and expensive branding projects that provide them with a slick presentation of their carefully crafted values. Vision is about getting people to believe. The point is that you are on-boarding others to join in a journey to build a successful business.
Onto accountability: are there clearly defined roles and responsibilities in operation? In other words, does everyone understand what they need to do and are there clear consequences if they don’t do it? This may be written down in a job description and then re-assessed at a performance review meeting. The main point being that individuals understand what they are responsible for delivering and that they are actively assessed on how well they are doing this. They know who can help them if they have issues or need support. They are generally aware of what other people around them are responsible for too (so as not to operate in a silo mentality) and they understand what their boss does and his/her accountabilities.Again, this does not require highly sophisticated performance management systems or lengthy annual review processes. It just takes a simple investment of time to make sure that, from the outset, individuals know what is expected of them, where to get help and that someone is managing their progress – if only to reward them for doing a great job!
Agility: as we have already said, to be successful in the 21st century, businesses have to be agile and adaptable. There are new markets developing all the time (both in geographical and consumer terms). There are business niches evolving before we know we even need them. Even huge companies that have experienced sustained success in their markets still have to diversify to keep pace with change. Organisational structure therefore cannot be rigid; it needs to be agile, whether it’s to stretch or shrink according to the needs of the business, or to offer flexibility in job roles and working patterns. The structure needs to accommodate newness, be able to cope with change and grow with the business. Let’s be clear, this is not about putting everyone on zero hours contracts but about having a plan in place to cope with peaks and troughs. It’s also about being more broad minded when recruiting, whether that means remote workers, part-timers, contractors, interns, the aim is to hire with potential in mind, rather than experience.
Having examined the three pillars of structure, it’s time to decide whether your current organisational structure is enabling or disabling the achievement of your organisational aims. The crux of the matter is that businesses needs the right infrastructure to flourish and the structure needs to be relevant and suitable to the business in question. What works for one business may not transfer to another.
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