Technology Killed the Org Chart

Are remote teams and ninja-ish job titles chipping away at the multidivisional structure? I hope so.

In the early 20’s, General Motor’s developed the multidivisional organizational structure that most companies still use today. This structure was considered highly effective and efficient and was quickly adopted as the norm in the business world. You have probably seen the standard organization chart in most large-scale organizations that divide people by functions. The theory was that by allowing all the engineers to be together in one department they became more efficient at their jobs.

If we look at some companies today — specifically startups and software development companies but not limited to them — we see a very different structure.

One of my all time favourite tools is Basecamp. The company develops software — wonderfully designed software that is easy to use and has become this Project Manager’s best friend. From early start-up days the owners decided that, in order to get the best and most qualified people working for them, they couldn’t limit hiring people in their immediate geographical location. In order words, they started hiring the right people who just happened to live in another country or even another continent. This worked so well for Basecamp that they now have a fully remote team and have written a best-selling book about their experiences. One of the founders, Jason Fried, speaks highly of their decision to work with a remote team and attributes much of the company’s success to not having a traditional model:

Say you spend thirty minutes driving in rush hour every morning and another fifteen getting to your and into the office. That’s 1.5 hours a day, 7.5 hours per week, or somewhere between 300 and 400 hours per year, give or take holidays and vacation. Four hundred hours is exactly the amount of programmer time we spend building Basecamp, our most popular product. Imagine what you could do with 400 extra hours a year. Commuting isn’t just bad for you, your relationships and the environment — it’s bad for business. ~ Remote: Office Not Required

Some non-IT companies are using a new organizational model as their competitive edge. Method makes cleaning products. Not the sexiest industry. For a long time the cleaning product industry was highly commoditized with everyone offering basically the same thing with a few big players holding the market share. Cleaning was just boring.

Then Method was born and this small start-up took full take advantage of its size and adapted quickly to earn its place against the giants like Proctor and Gamble and Clorox. Today, Method is eating up more market share and retains a very grassroots structure with employees making-up ninja like job titles (Suds Slinger is their Sales Director) and has a culture where everyone does a bit of everything. Even the VP gets in on the action and takes turns answering the front desk phone. The founders of the company support this culture and structure because they believe that this keeps them connected to their customers and evolving. This structure, as common sense as it seems, is not standard in the industry and differentiates them from their competitors.

With so many things in life being so unnecessarily complicated it’s refreshing to see a trend go to the other side of the spectrum and focus on the basics — like people (imagine that!).

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