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Memory Nguwi
People say structure follows strategy, and that is true.
You should leverage on your organisational structure to deliver on your strategy. In practice, though strategies change more frequently, structures are rarely structured to mirror the business’s strategic priorities.
Most structures in practice are meant to serve the personal interests of executives, instead of serving the interests of the business.
So why worry about structures? You should worry about structures because they are used to structure authority, accountability, and decisions in your business. Structures establish a transparent chain of command. Organisational structures help establish a clear chain of command and dictate reporting lines. On coming up with your structures, you need to deal with certain issues to make your structure more efficient.
One-on-one Reporting – Try to avoid one-on-one reporting relationships. For example, you have chief executive officer and assistant chief executive officer. In most cases, one of them is not needed. Such roles are created for political reasons than serving the interest of the business. The trend now is to avoid such a relationship at all. For example, the Harvard Business Review says that the trend of having a COO (one reporting relationship with CE) is no longer popular, as exemplified by the number of organisations removing this role from their structures. The reason is that where such a role exists, there is likely to be a conflict with the CE. The fight is generally over territory and decision-making.
How deep should your structure be? That is, how many reporting levels from top to bottom. Nowadays, there are no more than five reporting levels from the bottom to the CE. That way, you ensure the decisions are not delayed unnecessarily. Such flattened structures ensure that people are empowered to make decisions. When you reduce the number of reporting levels, you are increasing the number of people reporting to a manager.
I have heard other people complain that increasing the number of people reporting to the manager or CE makes it difficult to supervise them. That is not true, because structure should never be taken as a tool for supervising people. The structure should be used to empower people to do their jobs without too much interference.
Your business will benefit when you genuinely empower people to make decisions through your structure. When empowered, people make decisions quickly, and your customers and other stakeholders are served faster than in a hierarchical structure. The assumption I am making here is that you have the right and capable people in each role. Structures are constrained when you do not have capable people manning roles. In some instances, we institute restructuring of structures when the problem is not the structure, but lack of capacity in the people manning your roles.
Others have argued against flattening the structures, especially at the top, because they fear diluting their powers. It has nothing to do with the business, but power preservation. You can have over 10 direct reports to the CE or even more. It is reported that Tim Cook, the CEO of Apple, has 17 direct reports.
Remember that the people reporting to the CE have nothing to do with levels. You can have a middle manager who is not a director reporting to the CE because they are handling a crucial area in line with your strategy for that period. Do not equate reporting to grading as seen in grading structures. It is also wrong to assume that because you are reporting to a senior person, you must have a grade closer to the grade of the senior person.
Suitable structures allow you to clean up all areas where there is unnecessary duplication of work by different roles. Duplication of work by various people costs you money and time. You lose value when people duplicate tasks. You also pay people for no extra value being created.
To some people, structure signifies an opportunity to build a power base, hence the need to look out for such people. Distinguish between operational managers and specialists who may be essential, but not true managers (because they do not have subordinates). You also need to check what percentage of your staff are in support functions versus those in the core business or operation functions. A wrong mix is an indicator of faulty structures. Achieve the best balance between functional support and operational jobs.
One of the reasons organisations end up with overblown structures is that most managers think that business problems can be solved by adding more people. With a careful review of your structures, you may find that you are served well by having a lean structure that is not heavy on costs.
Give accountability to the people close to the action. The issue of accountability in organisation structures is critical. Traditional and rigid structures give accountability to people very far away from the action – people who rarely understand or are poorly informed about what is happening on the ground.
*Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant- Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm. https://www.thehumancapitalhub.com Email: [email protected] or visit our website at www.ipcconsultants.com
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