Transcription
The 7 ½ Types ofOrganizational Structures
Without Order,There is ChaosLike it or not, structure brings order. As an organizationgrows, there is more risk of chaos without structure.In an organization, org structure does 2 things:playeClarifies roles & reporting relationshipsplayeSupports good communicationAnd it results in:playeEfficient and effective work process flowplayeMore productive employeesinfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
A Brief HistoryFrom where have we come?playeplayeplayeplayeplayeFirst org chart in 1855 by the New York andErie RailroadUntil the early 1950s, most U.S. companieswere functionally organizedLate 1950s- 1960s - Economic and productgrowth lead to complexities divisional/productstructures sought to control1970s brought globalization and increasedregulations which led to matrix structuresLate 1970s until today - organizations havesought to be more flexible and creative ininfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
The Science behindStructureAccording to a study by McKinsey and Gallup:playe84% of U.S. employees were matrixed to some extentplaye49% of employees serve on multiple teams some daysplayeplayeplaye18% of employees serve on multiple teams every workday but withdifferent people, though mostly reporting to the same manager17% of employees report to different managers in their work withdifferent teamsOrganizations with clear and accountable roles have a 76% probabilityof achieving top-quartile organizational healthinfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
How AreYou Organized?MYCOMPANYNot every organization isorganized the same. Exactlyhow it is organized depends on:playeplayeThe functional groupings ofwork processesMYCOMPANYThe natural groupings ofteams, work groups or unitsinfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
7 ½ Common BusinessOrganizational ACRACYCUSTOMERTRIBES & SQUADSMPANYinfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
Matrix OrganizationalStructureCEOFeatures:playe Reporting levels both horizontally as wellas vertically with cross-companyteamworkplaye Employees may be part of a functionalgroup (i.e. engineer) while serving on ateam (i.e. a specific product)Advantages:playe Employees have responsibility for theirdepartment and organizational projectsplaye Cross-team collaboration minimizesdepartmental and data silosChallenges:playe Employees may receive direction fromtwo different managersplaye It may be difficult to prioritize workresponsibilitiesCorporate StaffManagerAdmin & eringManagerMarketingProject AProject BProject CExample of a Matrix Organizationplaye Starbucksinfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
Functional OrganizationalStructureCEOProject ionalResourceFunctionalResourceFeatures:playe Individuals are grouped by specific functionsperformedplaye Common departments are organized byseparating each area and managing themindependent of the othersAdvantages:playe Functions are separated by expertiseplaye There are clear roles, responsibilities andlines of commandChallenges:Different functional areas can turn into silosthat focus only on their area of responsibilitiesplaye There can be a lack of collaboration betweendepartmentsplayeExample of a Functional Organizationplaye Microsoftinfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
Product OrganizationalStructureCEOFeatures:playe Company is organized by specificproduct typeplaye Each product has an executiveleader who oversees everythingrelated to that product lineAdvantages:playe Products are organized by categoryplaye There are clear roles, responsibilitiesand lines of commandChallenges:playe Each product division can createcompletely separate processesplaye The lack of cross-productcollaboration can result induplicative processes andinefficienciesPresidentProductGroup 1ProductionSalesProductGroup 2R&DAccountingProductionSalesProductGroup 3ProductionR&DSalesR&DAccountingAccountingExample of a Product Organizationplaye Johnson & Johnsoninfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
Customer OrganizationalStructureCEOFeatures:playe Company is organized by customer typeplaye Customer expectations are met by acustomized service approachAdvantages:playe A customer-centered structure specializesin the needs of each customer groupplaye Customers receive more consistentexperience across channels andtouchpointsChallenges:playe The needs of different customer types maybe ignoredplaye Each customer division may compete withcorporate resources, such as ITChief CustomerOfficer (CCO)RetailFinanceOnlineCustomerServiceTechnology& ITMarketingHR & LegalCustomerExperienceExample of a Customer Organizationplaye Tumiinfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
Geographic OrganizationalStructureWesternSales ManagerSales RepsGeneralSales ManagerFeatures:playe Organization is dispersed across one or moregeographic regionsplaye Typically, a central oversight person leads eachgeographic regionCentralSales ManagerAdvantages:playe Logistical demands and differences in geographiccustomer needs can be better supportedplaye Each division can focus its resources and talent to onlyits own territorySales RepsEasternSales ManagerSales RepsChallenges:playe Each region may operate with its own processes andprocedures, creating inefficienciesplaye Regions often compete with each other, establishing ahostile corporate environmentExample of a Geographic Organizationplaye Ford Motor Companyinfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
Flat StructureFeatures:playe Small number of levels and broad span ofmanagement at each levelplaye Every employee is given equal footing sodecisions are made in collaboration orautonomouslyAdvantages:playe Employees feel like they are allcontributing equally and therefore similarlyvaluedplaye It’s a simple structure for smallercompanies where often people holdmultiple roles and reporting relationshipsare sometimes unnecessaryChallenges:Without structure, decisions are made as ademocracy but often can be slowed aseveryone has a sayplaye Employees can question who isresponsible for each task so creativity ctivity can sufferExample of a Flat Organizationplaye REVOLVE Clothinginfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
HolacracyFeatures:playe Respects the creativity and openness of a flatorganization but still has some hierarchyplaye Departments and roles are blended sodecisions can be made from anyone andanywhereAdvantages:playe People are organized around Work as opposedto departments or seniorityplaye A hybrid approach appreciates both structureand autonomy so employees have authoritywithin boundariesChallenges:Without any designated middle management,decisions can be delayedplaye An open environment must balance creativityand collaboration with productivityplayeExample of a Holacratic Organizationplaye Zapposinfo@pingboard.com / 1-877-733-5157 / www.pingboard.com
Tribes & SquadsTribes & Squads is a form of a Matrix organization but instead of functional leaders managing the teams,project leaders do. The functional leaders may manage other things, such as career paths.Features:playe Development or functional teams may berenamed “Squads”, “Crews” or “Troops” who owna certain part of functionality from end to endplaye “Tribes” are a collection of squads within thesame business area, such as a product or divisionplaye A “Guild” is a community of members across theorganization who want to share knowledge, tools,and practicesAdvantages:playe Promotes team collaboration and innovationplaye Project leaders who are more familiar with theprojects are in charge rather than functionalleadersChallenges:Can take time to get used to new jargonplaye People outside of the organization may have adifficult time understanding organizational RSQUAD SQUAD SQUAD SQUADplayeExample of a Tribal Organizationplaye Spotifyinfo@pingboard.com / 1-877-733-5157 / www.pingboard.comCHAPTERSQUAD SQUAD SQUAD SQUADHenrik Kniberg & Anders Ivarsson Oct 2012
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Product Organizational Structure Features: playe Company is organized by specific product type playe Each product has an executive leader who oversees everything related to that product line Advantages: playe Products are organized by category playe There are clear roles, responsibilities and lines of command Challenges: playe Each product division can create
