At the Effectiveness lab, we are acutely aware that organizational architecture (read: structure) impacts the efficiency, effectiveness and ultimately, the overall efficacy of organizations that purport to be in the business of value-creation.
Whether you are in business for money or charitable cause – paying attention to matters ‘value-chain’ is non-negotiable. If the value-chain of your business is sub-optimal – your organization will either not make or leak money. For the not-for-profit entity, there won’t be sufficient positive-impact from programmes.
So, suffice it to say that this blog is relevant reading for all organizations, whatever the purpose
We discuss below one aspect of the effective-organization vitals that has a significant influence on value-creation and ultimately, the effectiveness of organizations – design (architecture)
Organization structure dynamics:
We always ask the question – why does organization ‘A’ choose to organize itself in a manner different from ‘B’? And why does organization ‘C’ choose the same organizing model as ‘A’?
Well, like house plans, organizational architecture concepts are varied and influenced by many factors. For purposes of this blog, we generalize corporate architecture philosophy under three main buckets:
- The lean and mean and more likely, flat structured – the ‘keep it simple stupid’ DNA type
- The in-between with a bit of fat on them but not too much to appear thick (fat) and multi-tiered
- And on the far end of the continuum, the dense and multi-tiered entity – the typical bureaucratic configuration that more often than not manifests via layers of organization and authority.
What influences organizations to choose a specific type of architecture?
Recent management trends, almost without question, assume that small or simple structures are ideal for the modern progressive organization.
Lean and mean or in modern OD. speak – agile, is considered the thing. What is big and complex is not good and a sign of trouble now or ahead
However, matters OD. aren’t like a linear game. Indeed, the question has to be: ‘if lean and mean is the magic bullet, why don’t we see leaner and mean entities?’ How come the monster bureaucracy continues to survive the onslaught? It’s the same thing as asking why we don’t see thinner human beings if obesity is a danger to people’s lives
Now, just like a person’s obesity or spindly build is driven by certain factors – environmental, personal and biological, the same is valid for the organization. Multiple factors influence the choice of organizational architecture and ultimately, efficacy at value creation.
We compare the rigidities of altering, for good or worse, the configuration of an organization to a house plan change. If the house is a multi-storied design, it’s hard-work changing it into a bungalow. It’s even more torturous transforming a bungalow into a multi-storied unit.
A house design chosen for its simplicity portrays simplicity while that chosen for its sophistication delivers such perception and usage – both designs serve a simple (zen-like) and sophisticated lifestyle and outcomes respectively.
It’s a style issue that we are discussing here. Style is a human thing, curved out of the many situations elaborated above. Style also emerges from a culture eco-system influenced by specific persona. It’s the spaghetti of human beliefs, preferences and how we want to affect situational outcomes
So – as we conclude, we return to the question, why do organizations choose to organize themselves the way they do?
The simple answer is:
- It’s the what works around here thing; for example, building a bureaucracy that meets the complexity and power-play needs of those in charge of the organization
- It’s a situational thing – most startups chose to go ‘lite’ on the structure; sometimes, organizations can’t remain viable with a flat structure; they require complexity.
- Time and growth of a particular business entity, bring about cause and effect dynamics that directly and indirectly influence architecture choice. Organization structure is a ‘thing in time.’
At the end of the day – whether an organization is flat or bureaucratic is not the issue. Ultimately, – it’s about keeping the structure agile enough to derive the appropriate decision-velocity and value creation.
It’s a matter of context