- About Environment, Products, Size, and People
- Consider Specialization First...
- ...And Generalization Second
- Widen People's Job Titles
- Cultivate Informal Leadership
- Watch Team Boundaries
- The Optimal Team Size Is 5 (Maybe)
- Functional Teams versus Cross-Functional Teams
- Two Design Principles
- Choose Your Organizational Style
- Turn Each Team into a Little Value Unit
- Move Stuff out to Separate Teams
- Move Stuff up to Separate Layers
- How Many Managers Does It Take to Change an Organization?
- Create a Hybrid Organization
- The Anarchy Is Dead, Long Live the Panarchy
- Have No Secrets
- Make Everything Visible
- Connect People
- Aim for Adaptability
- Reflection and Action
In all large corporations, there is a pervasive fear that someone, somewhere is having fun with a computer on company time. Networks help alleviate that fear.
—John C. Dvorak, columnist, broadcaster (1952–)
I love structuring things. You can see it in my file folders, my blog, my financial records, and my paper archives. Everything has a place and a function. I even have a neat white box labeled "Jurgen's junk," to keep things separated from another box labeled "Raoul's junk." It's the same with organizations I work for. I want to know what the structure is and what each part is for. Including the junk.
So that's the purpose of this chapter. It gives you an overview of adaptive principles in organizational design and some ideas on the ways to grow a structure in your own organization. I believe better communication follows from better structure; therefore, this chapter focuses on structure. We see that no single structure is the definitive answer for all organizations and that managers should instead focus on an organizational ability for continuous structural change.
The Management 3.0 model specifically refers to growing a structure. In complex systems, structure emerges by itself. However, as a manager, being responsible for the direction the self-organizing system takes, you can recognize that some structures are good and others are bad. The level of steering and intervention needed depends on the maturity and competence of the people in your teams.
About Environment, Products, Size, and People
People often ask me, "How should I structure my business and my teams?" (Well, actually they don't, but I expect they might after reading the previous chapter.) Unfortunately, there's no simple answer to that question. At least not a simple answer that also happens to be right. People might as well ask, "What is the best form for a species?" The question makes no sense. One cannot claim that a starfish has a better body structure than a spider. Both species exist, and both have found a niche in which to survive. The spider can't survive in the sea. And the starfish won't survive in my cellar. It is the same with organizations. The "best" organizational structure depends on the environment in which the organization needs to survive.
Thus we see that in today's environment, no solutions can be independent of either time or context. This also applies to organizational structures. To the extent that this is true, there is not—and likely may never be—any single form of organizational structure that provides maximum overall effectiveness.1
But the structure of an organization not only depends on its environment. The second factor in organizational change is the type of products. Conway's Law 2 says:
Organizations which design systems [...] are constrained to produce designs which are copies of the communication structures of these organizations.3
Conway's interesting observation easily leads to the conclusion that an organization must be adapted to the kinds of products that are being produced [Poppendieck 2009:67]. Therefore, a second driver for organizational design is the set of products developed in the business.
The third relevant factor contributing to organizational structure is the size of the organization. While an organization grows, it regularly needs restructuring to accommodate for its new size, even when environment and product types remain unchanged.
As a rule, every time a company grows by 50 percent, you should evaluate whether organizational changes are required, and by the time growth reaches 100 percent, you should already have made changes to accommodate that growth.4
And finally, the last driver for organizational change is the people. It is no coincidence that new managers and new teams, even when all else remains constant, often result in a restructuring of an organization. Different people need different structures to work with.
Changes in the environment, changes in product types, changes in company size, and changes in people, all lead to (or should lead to) changes to the organization's structure. A business that does not change with the times creates its own bubble of reality in which a lot of effort is wasted on stuff that has no value to anyone. A famous example of this phenomenon is Parkinson's Law, which says that "work expands so as to fill the time available for its completion." When existing structures in an organization are not abandoned, they will just keep inventing new work simply because they have the capacity available for it.
The people with whom I've worked know that I don't mind regular changes to teams and departments. It's not that things must change for the sake of change. But neither do I think that a structure is better off unchanged for the sake of stability. And when I leave an organization for another job, it doesn't bother me (that much) when my legacy is overhauled again by my successor. Times change with new competitors, new products, new employees, and new managers. I would be worried if a business stopped responding to such changes.
I don't believe managers need an overview of best organizational diagrams. What they need is advice on how to achieve adaptability. Species are all different, but they have one thing in common: The principles of adaptability are built into their DNA. That is what we're looking for. We want to know how to have an adaptable business so that it is easier to let an organization morph into different structures depending on context, products, size, and people.
When researching a number of books covering business structures, I noticed that many of them have a description of the "standard" hierarchical functional organization and then go on to describe "alternative" structures that are supposed to be better [Augustine 2005]. Or they describe different organizational archetypes or "forms," where the forms emerge as a result of their environments [Mintzberg 2009:106]. I will attempt a different approach. I will focus on a number of guidelines for adaptable organizations, and you can use these guidelines to grow your own organizational structures.
I believe that, similar to the forms of species, there are a few basic successful patterns with a large number of variations. None of them are intrinsically "better" than any of the others. The starfish is not better than the spider. Though, I must admit, a poodle is better than a Chihuahua.