Organization Structure is a leadership tool

When we think of organizational structure we often think of the org chart—boxes containing title and names joined by straight lines. Organization Structure isn’t an org chart, it is so much more.

Organization structure is the backbone of work systems in any business. It is the basis upon which work is distributed into roles, and a mechanism for distributing accountability and authority to get work done. Accountability and authority for work are delegated from the most senior role and cascaded to roles that make up the organization.

When the business is not performing  well, you may not be able to see how the organization is broken, but you can see the symptoms: The organization can’t deliver the strategy or do it on a timely basis, the organization is sluggish and slow to get things done, operational performance is poor or below expectation, costs are too high, opportunities are being missed, growth is below expectation, innovation is lacking, turnover is high and engagement is not high enough, and you are being asked to make decisions that should be made by others.

When implemented effectively, the structure is an organizing mechanism that brings logic and clarity to the work of hundreds of thousands of people. It provides a map of where work is nested. Titles give information about the nature, level, and complexity of the work, and managers ensure the right interactions occur to ensure the work gets done.

As the most senior leader, organization design is the tool by which you create the conditions to deliver the strategy and ensure value is created at every level. It enables you to manage complexity; it establishes the boundaries within which to harness, support, and grow talent; it is a lever to increase speed and reliability and accelerate growth and innovation. So, getting it right is important to your success.

Effective organization design eliminates the guesswork involved in building a working organization. It is your lever to ensure that the business will deliver on its strategy. For employees, it creates roles with clear accountabilities, providing interesting, challenging work and opportunities for development and advancement. For shareholders, it reduces risk by providing a reliable management system where management can deliver on its promises.

One of the most important questions a CEO can ask is:

Do I have confidence that this organization can deliver the strategy?

When the structure is right, decisions flow, accountability is clear, and teams move faster. When the structure is wrong, even the best people struggle. Doing it right will ensure you get the results you seek. You won’t have to deal with organizational issues, so you can focus on business growth and delivering your plan.

If you would like to learn more about how organization structure can create the conditions to deliver the strategy in your organization, I’m excited to share that my new book, STRUCTURE THAT WORKS: The CEO’s Practical Guide to Organization Design, is now published and available on Amazon.