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Ep. 6: Organizational Structures Defined: The Formation of Advanced Systems

40m 24s

Ep. 6: Organizational Structures Defined: The Formation of Advanced Systems

The podcast introduces a discussion on organizational structures, emphasizing their critical role in defining how a company operates. An organizational structure outlines the alignment of people and departments to facilitate productive activities, clear communication, and effective decision-making. It establishes reporting relationships, clarifies roles, and determines how information flows. The hosts stress that a well-defined and communicated structure reduces employee confusion, builds team alignment, and sets clear expectations. They recommend visually presenting the structure during onboarding and hiring to enhance transparency and comfort. Furthermore, structures are not static; they must adapt as a company grows or changes. Common types include flat structures, which are collaborative with minimal hierarchy and work best for small teams, and hierarchical structures, which have a defined chain of command and are more common in larger organizations. Hierarchical models can be functional (grouped by department like marketing or sales) or divisional (grouped by product or service line). The conversation highlights that planning an organizational structure is a strategic exercise, akin to chess, that involves considering current needs, future growth, and employee career paths to ensure long-term success.

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6868 Words, 39260 Characters

English
[MUSIC] Welcome to organizational Sherlock's, the podcast where business beats psychology and your organizational puzzles meet their match. Join us for captivating stories and practical solutions to unravel your toughest challenges. I'm Dr. Elizabeth Fleming and I'm Morgan Ashworth, your guides to prescription for business success. Let's dive in. Welcome back to our curious listeners. So this is the first episode of April and this April we're going to be talking about organizational structures. So some of you may have been exposed to organizational structures. Some of you may have not been yet, but everyone works in organizational structures. We want to discuss the types of organizational structures creating them, planning for them their purposes and like. Absolutely. Yeah. Well, and I think it's important for us to kind of think about it because organizational structures do change. The way that companies as they grow or as they change, they also sometimes will change their structures to kind of help information flow more smoothly throughout or to have a more defined chain of command, if you will. And so I think it's important for us to start off just even just defining what an organizational structure is and cannot within the context of this podcast. What are we trying to kind of help our listeners understand or what are we hoping they take away from this? So Morgan, I'm going to throw it back at you if that's okay. And just ask, when you think of organizational structure, what comes to mind? So what I think of organizational structures, I'm thinking about how people are aligned in a company to promote and create the productive activities that occur in that company. So how are activities done? What activities are done? How are people departmentally separated to support the activities of the company? Because, you know, a company, all people are working towards one end goal. Right? Whether it be a service or product that they're presenting, but you know, there's a visiting accounting team on every, in pretty much every company. And so that accounting team, they're supporting that creation of the product or they're supporting that creation of that service generation. And so you have to determine how these departments have to be separated, how these individuals have to be separated across the company to allow it to be successful, to grow, to build alignment among the team. So there's a general understanding of where are we going? What are we doing? Why are we doing it? Absolutely. Yeah. I think that's that's absolutely true. And I'm thinking about, you know, sometimes when maybe I've been frustrated or I've worked with people who are frustrated and in their roles and oftentimes it's because they don't know who to go to or where to go, right? Because that structure isn't created in a way that is is very clear for them, right? And so I do think that that that's also a part of it is, you know, who do I report to? Not just, you know, as kind of the idea of who is my boss, but who are the who are my dotted line reports, you know, the ones that maybe aren't as distinct, but people that should be included in certain decisions like finance, like sales, like HR, you know, whatever area those are or whatever areas those are, can how do those dotted line structures all work within the greater framework that's created within the organization? Yeah, who exists where? Who's reporting to who who has decision making capabilities who doesn't? That all is all created within an organizational structure and the level of decision making capabilities even. And so it's really important to have that alignment across the team for, okay, I'm reporting to this person or this person is reporting to me. At my company, we actually are I'm adjusting our organizational structure right now, funny enough, I'm kind of always doing that, I guess, you know, as we bring new team members on, as we're growing, as we're changing our plans, we're planning our organizational structure. In short, I'm probably going to start saying org structure, a lot quicker to say, but so I'm differentiating this person was in this department, but they help a lot more in this department now, so we're moving them or are they interling between two departments and communicating that to the team? As you discuss Elizabeth, it is important to communicate so people know who their resources are and where those resources exist in the team. I feel especially if you like you bring a leader in, for example, you bring a leader in, that's maybe mid-tier, the lower tier individuals, they might have a hard time accepting that person unless this organizational structure is shown to them even. So presenting those org structures, it's also important not just developing them, but communicating. Absolutely, yeah, I really think it all kind of falls down and this is maybe my bias or my, just my opinion, but I really think it all kind of flows down to this idea of information and how information is translated and moved across an organization. That's really in my mind what it is, whether that's verbal communication, whether that's decision-making, again, chain of command, performance reviews, whatever it is, it really relates to the foundation is really that information. And how does the company want that information to kind of flow? So that's usually what I kind of think about and I talk about with my clients, right? I've worked in, I know we'll get into the different types, but I've worked in very flat organizations where kind of that information flows just kind of through everyone and there's not necessarily a clear decision maker. Yeah, I know it also worked in more hierarchical organizations where there's a very clear, again, chain of command where I know who I need to talk to about a certain thing, who the decision makers are, who we need to influence, and all of those pieces. And I think it's important, like you said, to not just have a conversation about what that structure is, but to really have a visual so people can refer back when they need to from time to time. Yeah, circling back, what you're saying about communication, it's communicating the activities. So communicating activities like performance evaluations, communicating activities like who is responsible for what job, who is the manager, who is customer service oriented, who's logistics individual, who's in shipping and receiving. That's all very important in creating that visual structure. We actually incorporate our visual or structure into our onboarding program so that they understand who am I reporting to, who might pull me and who could I also potentially report to later down the road. What are my growth opportunities at the company even? Create a career ladder, not just a communication of the present day, but a career ladder for individuals. And again, it's the where are we going? How are all of these activities combining and which where are we going with that? And so really org structures, while they seem to an extent, I don't know, how to say it, I don't know, like it seems like it doesn't have to be communicated in a way. It is important to communicate because it's going to help build that alignment. It's going to help build expectations. It's going to create this understanding, global understanding of a company that really doesn't exist without the communication of it. It's building from bottom up or top down in a sense. So rather than verbally communicating it, physically showing it, well, it seems less important to do than actually getting this person involved in their position. It actually is going to create long-term expectations and improvement for that person. Absolutely. I think what you're saying is that it really creates a level of clarity and understanding. And I like what you said about global understanding, right? Where everyone in the organization just kind of knows, right? And you know, you brought up onboarding. And I agree. I've been responsible for building out onboarding structures, in onboarding plans for different folks. And one of the things that I've always found to be really important is not only to show what the organizational structure looks like on paper, but also to bring some of those leaders in those different functions into the onboarding process. So they can understand, again, kind of multifaceted what it looks like on paper, but they can understand from the leaders what they're trying to do in their function and how that relates to the larger strategy. And that has been, in my experience, really effective. Not only do people new folks to an organization get to know the leaders of the organization, but they also really start to understand how everything comes together. Kind of what is the greater puzzle look like? And what are the pieces within that puzzle? So I like what you said about connecting that to onboarding. And I think that's a perfect time to do that if not before when somebody's in a recruiting process, you know, so that they can understand what they're walking into. I think that can be really powerful. And also offers a level of transparency that, you know, if a company is really going for that and being transparent, that kind of shows and shows that they're willing to do that on the front end. So. Yeah, it shows that there's a level of clarity, like you said, in the company. There's a level of, you know, this is the direction we're going. This is I'm communicating to you how we function. And in a sense, it creates a sense of comfort for new hires. And I've worked with a variety of small companies that have developing hierarchies or different org structures. A lot of them are a hierarchical base that I have worked with. And we. sometimes are bringing in a manager. So they're coming as like third tier, they're coming above supervisors even. And so how do we build that buy-in? But we're not just communicating to that manager where they exist, but now we're communicating to the individuals that are now reporting to them that they exist here and that they're supported in that level of the position. So for example, a sales team, we had a sales manager come on and you have to build buy-in within the team. And some team members, they were hesitant because maybe they wanted the role, but they weren't the right fit at the time. Maybe they will be down the road, but communicating that she is supported in the role that she's in and she is higher up on the hierarchy. We see her as higher up on the hierarchy versus someone that's coming in more of a lower tier level. Maybe this is a brand new position to the company. And they're just a, for example, production worker. And but there's these tiers that they can grow into an operator assistant, to an operator, to a supervisor or a team lead to a manager. Like I said, that career ladder. So it's that it is that clarity, that communication that's super important. And it starts with the hiring process, the onboarding process, and evolves. And these people can evolve with the company. I mean, one of the companies I'm working with currently, they have their small team, but they're growing right now. And something I've been communicating as I help with the hiring is a great line to use is the people who are hiring today are our leaders of tomorrow. It is true because you need to make sure you have a strong base so that you can grow that base up rather than bring managers above everyone of that are at that level. Maybe you can grow this bottom level person to be in five years the supervisor or the manager instead. And so having planned org structures that aren't yet in process, that's also helpful. Oh, absolutely. Yeah, kind of identifying those skill sets that your folks have and then being able to kind of place them. I think there's a lot of power. And I know today we're not talking about career trajectories or career pathing. And I think that can be another topic for another day. But it does play a role here because you look to what is the current org structure. And what do you want it to be in three years, five years, 10 years, right? All of those, you have to also kind of know. And I guess I'm going to liken it to the game of chess, right? You have to know where you're going to move your king and your queen and your pawn and all of these things. Also, I'm not a chess player for what it's worth. So I actually don't know how to play chess. I just know what the pieces are called. But that's OK. Maybe someday I'll learn it. I'll teach you. It's really about moving those pieces and being very strategic about how you do that. And then also developing those folks early on and identifying both aspirations for them but also future within the organization. So yeah, I think there's a lot at play here. It's not just a clear-- we are choosing a cyclical structure. And this is how it's going to be. There are so many other factors at play, just with-- and anything we talk about. There's so many other factors to consider. But I think for today, just to kind of set the stage for our guests, that's going to be joining us on our next podcast, I think it's important for us to kind of talk about what are some of the more common organizational structures? And what do they look like? So if you're cool with it, I think that maybe we take it in that direction now. Yeah, certainly. I mean, the aptitudes and the skills that you're going to need in each of the positions is going to depend on the organizational structures. So Elizabeth, I know you've worked in some more flat structures. Also known as a flat-arkey, fun enough. So tell me a little bit about some of these flat structures you've worked in and the purposes you see behind them. Yeah, I think that being in a kind of more of a flat organization, there really is-- it's not as clear who you report to or who your boss is. It really is more just cross-departmental. People make decisions together. And I would say it's very collaborative. Oftentimes you're reporting to more than one person. Now that definitely brings some challenges at times, especially when maybe the people you report to have different ideas about how something should be done. However, what I will say is that I think the benefit there is that it's, in my experience, generally relatively easy to pull people together to kind of create that shared understanding again. I've only worked in flat structures that are very small in nature. And so it's easy to do that when I have been in larger organizations or have worked with clients in larger organizations. I think there's a tendency to go towards more of a hierarchy or kind of to have a little bit more-- a few more layers, if you will. But in a lot of consulting firms that I know of and where I work now, it is very flat. And so again, it's nice because we can clearly define the responsibilities that we have that they're still shared if that makes sense. I definitely see a lot more flat arches in those really small companies. It's really hard to have a flat arki of 100 people. Because that means you have 100 decision makers. It's a full on democracy. It's back in the Greek times, full democracy. Everyone's a decision maker. So because of that 51 versus 49 votes, it's going to create a lot of conflict in the company. So once you get to a certain size, a flat arki is usually really hard to continue persisting. You got to develop some sort of hierarchical structure, whether that be functional or divisional. We'll get into those a little bit later. But I know that flat arki is maybe it's not-- you don't have a company that's a flat arki, but maybe you have a departmental flat arki too. So these organizational structures might also exist within the departments that exist. So you might have a, for example, a divisional structure. So divisional structure is based on-- is a hierarchical structure where this department. But that department is based off of the purpose. So the service, the end goal service, the end goal product. So maybe you have a divisional structure where in the hierarchy where you have a certain product line. And in developing that product line, so in servicing the client, whether that be accounting logistics and sales-wise, they're all in one department. And so divisionally in the company, there's multiple divisions for multiple different products. But that division of the company, they might be a flat arki. So the sales person is at equal level as a logistics person who's at equal level as the bookkeeper, for example. So you can have flat arki within an organization, but the organization overall might be divisional. Yeah. And I think another way to say-- I mean, I know you're using the term divisional, the way that-- and maybe this is just a geographical difference. I don't know. The way I've always thought about it, similar or very same description. But thinking about it more as a functional or a role-based structure. So that's another structure, actually, what it's going to talk about. I was also-- You're ahead of me. But yeah, so same mindset. There is also the functional of-- there's a sales department. There's a logistics department, the bookkeeping department. Maybe there's a department combined. So I know one of the companies I work with, we have the accounting team, which is purchasing, logistics, and bookkeeping, and HR all in one. And so we have a flat arkiical structure there within that functional department, but there's still a hierarchy. So keep going about your function. Yeah. No, no. I think that's absolutely right. And a lot of the companies that I work with are very similar in this structure, right? Where-- and it's hard to do this on a podcast, because I am like a digital whiteboard and draw thing. So I'm very-- I'm sure you're talking about. So maybe we can throw some visuals up there on what some of these things look like. But the way that I'm thinking about is, take marketing, for example, right? And I think what you're saying-- and correct me if I'm wrong-- but there's the overarching leadership, and then there's the marketing, right? And within marketing, they may have a leader. But then there's like its own little hierarchy, or its own little structure within just that simple marketing area. That's the marketing is simple, because I know it's super complex. But I'm saying within that one area, it has its own structure. And the way that that functions compared to HR or finance may look a little bit different. And I think a lot of that simply is due to leadership. It's due to priorities. It's due to personalities in the realm. I think there's a lot of reasons that that happens. But in general, yeah, kind of setting it up and then having those different roles or divisions is something I see quite a bit. Yeah, so to break down those hierarchical structures, the functional one that you're talking about, let's say, versus the divisional, and I was talking about-- so in hierarchical one, maybe where it's functional, we have the CEO. And then with the CEO, we then have multiple VPs. There's a VP or a CMO, Chief Marketing Officer, and they oversee the marketing department. Maybe there's a marketing team lead in there. So there's already three levels in that hierarchy, and then you have your marketing team. But within that marketing team, there are multiple individuals that do all the same thing. They have a flat-arkey between them, but really they have this functional hierarchy in the overarching company. And there's still hierarchy, because there's still team lead. There's still chief marketing officer. But it's a little different depending on the company. same thing for the sales department. You have CEO, then you have maybe chief revenue officer, and then you have a sales manager, and then maybe you have customer service versus, you have like the actual sales development type of individuals. And so there's a functional hierarchical structure there as well, but within the sales development group and the customer service group, those are both flat arcies. And potentially the sales development to the customer services also flat arcie. Sales development doesn't have any further decision making capabilities, then the customer service team does. They all have one vote each. They don't have two votes to the one vote, like the sales manager may have. So that's kind of the functional aspect of, you have sales, you have marketing, you have HR, you have maybe production, or some other sort of department in there. Then you get to the divisional side. So on the divisional type of hierarchy, you have CEO and your VP's, yes, you might have VP's of the various areas, but you might have a chief marketing officer who sees overseas five different departments, because there's a marketing professional, each of those departments, because that marketing professional is specialized in marketing one product line. So maybe you have, maybe you're selling cutlery. So one focuses on the cutlery of general forks, butter knives and spoons, one focuses on, you know, higher level kitchen cutlery. So butcher based knives, one might focus on like the spatula is the grilling based type of information or products that you have. And so you have the chief marketing officer who's overseeing all these marketing individuals, but they're divisionally separated based off of the product. Same thing, you have a sales team within each of those divisions. And the sales versus the bookkeeper versus the logistics person versus the marketing person, in that divisional department, they are, they are a flat-arkey. They all have a shared responsibility to create the product, promote the product, sell the product, get the product out the door. But you have the chief officers or the VP's of the different areas that oversee each of the individual people in those divisions. That makes sense. So it's definitely a more complicated version of the hierarchy. Most people think of the functional hierarchy. They think less often of the divisional one, but once a company gets to a certain size, usually you have to move that route if you're going to separate the product lines. Absolutely, yeah, it's differentiation, right? So I say that in a lot of ways, right? Yeah, no, I completely agree. I know I work with a client that has really historically for many, many, many years, over 100 years, been in the healthcare space, right? And not offering healthcare, but kind of creating the rooms when you go to the hospital and the clinic and that kind of stuff. And for them, they have differentiated. And so they've gone not just into a, not just creating the room itself and what that all looks like, but also how do we communicate? And what does that technology look like? And so for them, taking the marketing example, yes, there's a chief marketing officer, but within that there are marketing vps for kind of their traditional product line. There's a VP in the technology side of the world. There's a VP in kind of even innovation and marketing innovation. And so yeah, it's as they've grown and evolved, they've recognized that, you know, they can't have one person be the master of all, right? They need, they need people to have certain expertise in these certain areas and really have that deep dive and deep understanding of that product or of that solution. And so it shifted from more of your traditional structure, traditional hierarchical structure into more of this divisional way, not to say they don't all work together because they do when they talk about, you know, how are you helping each other and how does this, you know, achieve what we're trying to do from a larger enterprise mission and vision. And they are focused kind of in their areas as well. And so yeah, I've definitely seen it experienced it witnessed it. It's complicated, but it's really powerful at this. Yeah, it's also a very fascinating way to do business because you're recognizing the deeper psychology behind how certain product lines, certain services, depending on the company, if you have multiple, it attracts different people. It attracts different people in different ways as well. So you really have to specialize sometimes in those services or in those products. I know with one company, the I work with, it's the recognition products company. And, you know, we can also do promotional products. So we're altering, you know, the way in which we promote these. Yeah, it's not yet divisional. We're still a very functional hierarchy, but you have to take into the divisional side, you know, sorry, I'm still up there, but you have to take into the divisional side of it into like how you're doing things. You have to apply it. And so when you're applying this divisional mindset, you can still do it in a functional and the hierarchy, but overall, as you become larger, you might have to become divisional instead of functional. I mean, I see, I know of some other companies locally that an electrical company, for example, they have divisions. Yes, there are very much functional environment in which they have, you know, this is management, this is like office staff, this is this, this is sales, this is quoting. But then this is like our electrician team. And then you have, you know, your journeyman, you have your apprentices, you have the very rare, we have master's electricians, because usually master's electricians will go and make their own company unless they're higher up in the company. So once they get to that final functional level of, you know, this is our journeyman and these are our apprentices, then you get the two divisions. You get the division that works with the phone companies and then you get the division that works with the commercial types of companies, your work worth versus maybe the residential. So then you get to the division. So there's usually a combination between functional and divisional in the end. Absolutely. Yeah, I would agree. I think it's pretty common in construction companies, very large, large construction companies that it kind of ends up in this way, right? If they're, if they're building, you know, to government buildings or they're building residential or healthcare or whatever it may be, I've definitely seen and worked with several construction companies and all of them can have folks that are responsible for different divisions. Yeah. And, you know, and again, the people that are responsible for those divisions know it like the back of their hand. I mean, they know what they're talking about, they know what they're looking at. And I think that the trickle down effect of that to kind of the rest of the company and the people within their division is really powerful, right? Because they know and trust the people who are helping to lead that division. Yeah, and I'll be honest, I feel like sometimes when I see a company going from that functional hierarchy to the divisional hierarchy, we see a lot of matrixes occurring and matrix is its own type of org structure. So there's a matrix because there's not necessarily enough people or enough products being sold of that type to separate fully divisionally, but there has to be. And so to support that, support the growth, you do a matrix structure. So Elizabeth, tell me a little bit about some of the matrix structures you've had experience with or that you've observed. Yeah, yeah. No, definitely seen a few. I think that the benefits from it, I'll start there kind of of what I've seen with the matrix structures. It really, it's very flexible and adaptable. And I think there's a lot of collaboration, a lot of opportunities for collaboration, which I really appreciate. So I think in essence, I'll maybe use it as a little bit of an example. Even though, let's say we take a marketing specialist, for instance, right? Who is working in the marketing team, they may have reporting obligations both to the marketing leader, but also to the product teams, right? Because the product teams need marketing in order for them to get out there and sell the product, right? And to create that content and those resources. And so I think this is really, I had said before, kind of the dotted line, you know, there are kind of the solid lines. This is my boss or this is my supervisor or whatever it is, but there are these dotted lines, whereas, but yes, I also have to report to maybe this other division, or I have to report to this other leader. And I think that that that's, it's worked really well in situations where there is clear communication. Yeah, I think where it breaks down from my experience is, is when there's the communication isn't there. Maybe the product use in the same example, the product team isn't talking with the marketing team, but they're expecting the marketing specialist to do what they need them to do. That's when it starts to break down, at least from my, from my experience. And what I know about it. Yeah, the breakdown of communication can certainly happen if you don't, you know, have that clear communication of this is the org structure. This is like, this is how you are connected to both of these departments, just like we talked about, it really determines and creates clarity among the activities that occur within the company. So, the marketing personnel is responsible for the marketing team and the product development team, perhaps, or the products team in general. And I'm sorry, I honestly, I feel like I see Matrix most often when it comes to marketing, 27. to some companies, it seems like an afterthought funny enough, especially small companies. You don't want to still have the bandwidth to support marketing or to finance it. And just because you're putting that money in all these other areas, so it's very important to have a budgetary breakdown of our extractors to an extent. And so that's something we're going to get into today. But I know a lot of times I see marketing matrixes when you have a sales and an art team. So you work with the sales and art team together, the art team works with the products team, but then the sales team is obviously doing sales. You need to understand sales, to understand marketing, you need to understand art and the products to understand marketing. And so we most often see matrixes there. Obviously matrixes exist more than just when it comes to marketing, but that is one area I oftentimes see. I would agree. I think that when I think about the functional nature of organizations, and I know I'm just using traditional departments, if you will, or the traditional functional areas, that there's a lot of variation, but just keeping it semi-simple. When I think about the support functions within an organization, things like marketing, HR, finance, often those are the groups that I see. Having more of the matrix structure, because HR for a lot of companies, and not all, because again, we can go back to divisional, there are some companies that have divisional HR groups, where HR is specifically focused on one area, and those are the only people that they work with. However, when you have kind of, say, more mid-size organizations, that tends to happen. HR supports all functions. Right? And so there are a lot of experience that. That's who I am before the company. I'm exporting everything. So because of that, I adopt that matrix side. Definitely. I mean, I'm working on safety and OSHA compliance, but I'm also working on, to an extent, applying psychology and HR to marketing. And then I fall into filling in for managers if they're out, because they need a manager overseeing the department. Yes, we have that separation. But supporting that initiative, supporting the hiring initiative, supporting just general filing initiatives that have to occur. And then just the overall organizational element as well. So I definitely experience that. I have people that sometimes work under me there, but being a chief people officer, that's where I see myself as I am that matrix. And one thing I like to bring up is matrix structure may also exist because services like marketing, finance, HR, a lot of times for smaller companies, they're also outsourced. So you might have one internal person, but they might not be as specialized in it as they need to be. And so you see a matrix in which there's partner organizations you're working with. And that partner organization create, you know, it lengthens the size of the company, but it exists as a matrix because they're not part of the company. The company is paying them for the services, but they're not paying the actual individual they work with, but they usually have some sort of like account manager advisor they work with consistently. And so you tend to mention those in the org structure through the matrix type of mindset. Absolutely. Yeah, no, I would totally agree. I think, you know, one of the most, I'm going to bring up a different one if that's okay. The one of the most interesting structures that I've ever worked in and worked with is more of a geographical structure. And I will tell you it was, it went that direction and then became more centralized again afterwards. But generally speaking, I think a lot of international companies do have more of this geographical structure, right? And for a lot of different reasons, you know, maybe they need to be very close to their customers. And so it makes sense to have leadership and folks working in all of these different regions. And also, you know, it may be kind of a language, you know, language is a part of that, you know, if they're working in Canada, they, and they need to speak French or they're working in, you know, in Germany, and you just speak German, right? It makes sense to have kind of more of a geographical division. And so while there may be one marketing team, let's say, it's then maybe broken down into these different geographical regions. And that has been from my perspective, probably the most interesting and also complicated at times. Structure that I've ever worked in, I loved it. It was great. But ultimately after COVID, the decision was to kind of re-centralize because of many different factors. And I think that was fine. I will be curious to see how these geographical structures do continue to evolve though, given the more, given that there's more comfort with technology and with virtual work, if we will see the geographical structures change and maybe choose kind of a different way of working. I think it'll be interesting to see. I don't know. I guess I could make a prediction. I think it'll probably go, I think it'll decrease a little. I think more folks may centralize, but we'll have to see time with them. Yeah, and kind of just to add on top of that, the geographical to an extent, it sounds kind of divisional, but it's divisional based off of geographic regions. But I feel as the world goes to this more diversity-focused type of environment, people have an understanding of other cultures. And I think that allows that geographical type of structure, maybe it's divisional, maybe it's not, but a lot of them I do see are divisional. It helps that geographical structure go more centralized because you have a better understanding of the other cultures. I mean, I get, so I'm a huge stone beller. I love stone belling and so I ride a skidoo. So any of those players are cat riders. Sorry, I don't ride yours, but skidoo's. And skidoo, I actually get emails from them in French. But I also get emails from them in English, but it depends on how I connected with this specific skidoo company or the specific one. And so I get most of them in French because I've written in Canada before in Quebec and it's funny to see because there's definitely this marketing environment where there's still a French and an English goes back and forth. But in the end, so it's geographical right now, but will it go centralized? So that'll be interesting to see. We'll have to come back to it at some point because I'll be, I'm curious on how a lot of these companies will navigate all of this as we kind of find our new norm. And I know we're in the midst of that, but I think there's everything changes all the time. So who knows? Yeah, who knows? I mean, that's why you need a plan. I mean, I'm planning org structures from two, three years out, sometimes I'm planning five years out with different companies. Sometimes I'm only able to plan one year. It depends on how large that company at that point in time, how advanced is that company or where's that company going? So really org structures overall, it's really important to plan in our next podcast with Terrence Dunn from talent acquisitions. He's coming on to help us talk about org structures and we're really going to filter it towards leadership because leadership aptitude does depend on the different org structures. And this April, we actually will have three podcasts focused on that, which we're excited. And so we're actually going to pull you guys in and start to really develop an org structure using a case study as well. That'll come a little bit later this month as well. Yeah, I think it'll be fun. I mean, there's a lot of different ways and we've talked about a lot of them. And I think that it's important just to say that there's no one right way. There may be to develop an org structure. And so if our listeners are working in a structure and you're trying to determine what that is, ask your leader. Or if you are the leader, ask people who've been there longer or whatever it is, talk to them and say, why was it decided to be this way? And what does the future look like? Try to be curious about it because there's oftentimes a reason behind it. A lot of times related to maybe the strategic plan, the current roles or teams within a company could be related to feedback that they've gotten for stakeholders or leadership or employees. And then lastly, my favorite word, of course, it's about alignment, right? So what structure is going to really best support any of the feedback that you've received and best support the strategic plans? So I'm going to encourage everyone and challenge you all to be curious to ask those questions. And if you do know the answer, maybe ask how else? And just kind of see how it all comes together. I think that's how we continue to grow and evolve. And so that's my challenge to everyone today. Yeah, and keep your eyes out this month for some visual versions of the structures we've talked about because I know I'm very visual. It helps me. So really keep your eyes open on our socials for those. It'll help you understand some of the conversation we've had today. And don't be afraid to do some research of your own. But for now, we'll see you guys soon. And looking forward to next time when we talk about leadership within org structures. See you next time. This concludes another intriguing episode of organizational Sherlocks. I'm Elizabeth Fleming and I'm Morgan Ashworth reminding you that the journey to success is an ongoing investigation. Stay curious, stay strategic and keep utilizing insights to decode your business mysteries. Join us every other Tuesday for your next who died. This is organizational Sherlock's closing today's case.

Podcast Summary

Key Points:

  1. Organizational structures define how a company arranges its people, departments, and activities to achieve its goals, impacting communication, decision-making, and workflow.
  2. Clear structures provide clarity on roles, reporting lines, and decision-making authority, which reduces frustration and builds team alignment and expectations.
  3. Structures should be visually communicated and integrated into processes like hiring and onboarding to foster transparency, understanding, and long-term growth planning.
  4. Common structures include flat (collaborative, less hierarchy, suited for small teams) and hierarchical (clear chain of command, often functional or divisional, better for larger organizations).
  5. Structures are dynamic and should evolve with company growth, requiring strategic planning to support future scaling and internal career development.

Summary:

The podcast introduces a discussion on organizational structures, emphasizing their critical role in defining how a company operates. An organizational structure outlines the alignment of people and departments to facilitate productive activities, clear communication, and effective decision-making. It establishes reporting relationships, clarifies roles, and determines how information flows. The hosts stress that a well-defined and communicated structure reduces employee confusion, builds team alignment, and sets clear expectations. They recommend visually presenting the structure during onboarding and hiring to enhance transparency and comfort.

Furthermore, structures are not static; they must adapt as a company grows or changes. Common types include flat structures, which are collaborative with minimal hierarchy and work best for small teams, and hierarchical structures, which have a defined chain of command and are more common in larger organizations. Hierarchical models can be functional (grouped by department like marketing or sales) or divisional (grouped by product or service line). The conversation highlights that planning an organizational structure is a strategic exercise, akin to chess, that involves considering current needs, future growth, and employee career paths to ensure long-term success.

FAQs

An organizational structure defines how people and departments are aligned within a company to support its activities, goals, and information flow, including reporting relationships and decision-making authority.

Communicating the structure builds clarity, alignment, and expectations, helping employees understand roles, resources, and growth opportunities, which enhances comfort and productivity.

Structures often evolve as companies grow or shift strategies, adapting to improve information flow, define chains of command, or accommodate new roles and departments.

A flat structure minimizes hierarchy, promoting collaboration and shared decision-making across departments, but it is typically more feasible in smaller organizations.

A hierarchical structure features clear levels of authority and reporting lines, such as functional or divisional setups, which help define roles and decision-making processes.

Including the org structure in onboarding helps new hires understand reporting lines, team dynamics, and company direction, fostering transparency and integration from the start.

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