Sooner or later every organizational leader considers changing the structure of their organization. By structure we mean the hierarchical structure, which defines how the work is split up (usually into functional departments) and who reports to whom (this generally defines who your boss is i.e. they have significant control over your hiring, firing and career advancement).

In my experience 99% of the experts who advise on structural changes do not understand the fundamental roles and rationales for structural design. This lack of understanding is surfaced when structural changes are made for the wrong reasons and driven by the wrong criteria. These include:

• Changing the structural to primarily address past (or current) problems in the organization. In this case the new structure is not strategic or future oriented. Structure is seen as a way of cleaning things up, but not as a major way of implementing and driving the organization's vision, mission, objectives and strategies. This failure is one of the primary reasons that organizations fail to fully implement their plans-because their structure undermines the plan.

• Changing the structure to address personnel issues. These usually fall into two types two or more people who do not get along well or an under performing individual. In either case structural changes may remove the symptoms, but fail to address the causes.

The generally agreed upon learning from research on organizational effectiveness are:

1. Strategy should drive the design of structure. Why? All structures are not equal in implementing a particular strategy and to achieve your selected goals. Therefore if the organization's purpose is to achieve its goals, structure must fit and support goals and their strategies. When structural design is not driven and tested by goal achievement and strategy, then having a particular structure is based on whim, comfort, convention, or addressing historical issues. These then become the goal of the organization: comfort and the removal of current problems. This invariably ages the organization and drives its disconnection from its public or audience or customer base.
2. If the structure is not adjusted to support new plans (goals and strategies), then the new plans will not be fully effective and inefficiency and waste increase.

Some Guidelines For Redesigning Structures

1. Begin with a clear plan for the future. A vision which describes were you want to be in 5-10 years, a clear mission describing your market(s), their needs and how you will serve them, your goals for specific measures of achievement, and your strategies which explain how you will do all this in a way that creates real and unique value for your markets.

2. Structure is now designed and assessed on its ability to support, enhance, and drive the above plan. Such a structure is called a strategic structure. This means it is designed like the plan to be future oriented.

3. Simultaneously to 1 and 2 the organization should involve a broad set of people in assessing the pros and cons of the current structure. This input can now be used to help design the future structure. How do we drive the plan (1) while reducing the cons and keeping the desired pros of the current structure?

4. Design la new structure to support the Vision, Mission, Objectives and strategies of the organization. Consider designing the structure that will be needed 5 years in the future when much of your vision and objectives will be accomplished.

5. Design structure to nurture productive conflict. Avoid mixing functions with conflicting dynamics (i.e. PAEI style under the same roof as P kills A kills E kills I.

6. When you have settled on the best new structure, compare it with the current one. Have a deep, honest dialogue on the pros and cons of each. Eventually one of three outcomes will emerge: [insert list}-The new one is a lot better. In which case adopt it.-The old one is a lot better. In which case keep it.-It is not clear which is better. In which case keep the old one. The trauma of changing the structure without clear cut benefits is not worth the effort. Or go back to the design room and create a better, new structure.

7. Describe each role in the structure: [insertlist]What results is that functional leader responsible for?What managerial style is preferred i.e. PAEI style.

8. Assess each current manager's style, performance and potential.

9. Cross match and staff the structure.

Bibliography:

For the strategy drives structure research begin with Strategy Implementation: The Role of Structure and Process by Jay Galbraith and Daniel Nathanson: Wharton School, Univ. Of Penna. Wepst Publishing Co. 1978.

For some modern views on why and how to reduce structure see:
Thriving on Chaos pages 354-365 by Tom Peters, Alfred Knoff, 1987
The Boundryless Organizations which describes how structure undermines the modern organization especially the service organization.