Structuring Your Company in a Way That Will Better Inform and Communicate
Our world is more interconnected than ever. As barriers to information disappear due to technology, the velocity with which knowledge moves is quicker. An interrelated world creates more opportunities for all, and things that were never possible before are achievable today in just seconds. Though this is nothing short of miraculous in comparison to the world before it, it also makes us vulnerable. One broken link in this chain of information travel can have unforeseen repercussions.
To better handle this complexity, it helps to design an organization that responds to this new world of instant communication and information. One way to adapt to this new world is in the way you structure the company. Ideally, the information will flow inside the company similar to how information flows on the outside. A more horizontal organization, as opposed to a traditional hierarchy, will help information become more easily disseminated. Information is power, and the more the information filters to everyone, the more empowered the members of the organization will be. Structuring your company in this manner will help you proactively respond to the complexity in the world around us (read How Your Company Can Keep Up in a Complex World).
Creating a Horizontal Organization
In a complex world, a traditional command structure assumes that there is someone at the helm of the company with the answers and know-how to direct the information and supervise actions. A more vertical structure filters the information along specific lines, and sometimes the information does not flow where it needs to go. The controlled movement of data can cause mistakes because, in a shifting world, it is hard to foresee who will need what information at what time.
The problem with this structure is that data is coming into companies from all directions and assuming we can manage and control it is no longer realistic. Centralizing all decision-making in a manager, for instance, presupposes that there is an optimum way for information to flow and that not everyone in the institution can be trusted with this knowledge. Having a more horizontal structure does not mean that there is no supervision — it only means that the way the information moves across the company is different. In a way, it is an attempt to mimic the way information comes to the company.
One way to move away from a command structure is to tear down the barriers to communication. These obstacles are sometimes harder to eliminate, but it could be as simple as sharing a folder of files with every person on a team. Information tends to become compartmentalized even within teams — look for these barriers and remove them. In a company where information hasn’t flowed as smoothly, it will take time to identify the obstacles and get rid of them.
If you decide to create a more horizontal organization, beware of hierarchy that might be hidden within teams. If you remove it in upper management, but the teams themselves are hierarchical, you are still just replicating the same command structure. As management starts to become more horizontal, teams may not follow the same pattern. Try to disseminate the idea of horizontality throughout the company as a whole.
There are other ways we can learn from how the world is now behaving. Decision-making used to be the purview of a few executives in an organization. This structure, again, assumes that this group of people has all the knowledge necessary to make decisions. To better harness the wisdom in the entire organization, decision-making can occur via other committees and teams. A group of four to five people is all it takes to make important decisions. If the group is diverse, the group will make much better decisions than any one person alone. Additionally, team members can be more empowered to make their own decisions within previously established guidelines without the need for approval. Committee-based decision-making is helpful in hiring and managing teams.
A team will become more horizontal if people get to know each other inside the company. Finding ways to interact is easier said than done, especially in larger organizations, but there are different ways to help the teams integrate. For example, to ensure better communication, each team can set up different points where people come into contact with each other. These initiatives will allow people to get to know each other and work together better.
More communication can occur in company-wide meetings, where everyone comes together to discuss the future direction of the company. It can also happen in hiring committees, where a group of different people comes together to select the best candidate for a job opening. Cross-departmental projects are also rich opportunities for interactions. As people in the company get to know each other better, they can use each other as resources to solve any issues that come up.
Moving into a more collaborative structure takes time, and changes to a company’s culture are best if they are made in small increments. In this way, teams will better assimilate the changes and will become more permanent. Plus, it is impossible to find all the obstacles to the free-flow of information and demolish them at once. Finding them is not easy and weakening the current structure of the company could be a disaster. It is better to experiment and make progress in this path in parts to make sure the character of the company remains as the company moves in the desired upward direction.
Reference: McChrystal, Stanley with Collins, Tantum, Silverman, David and Fussell, Chris. Team of Teams: New Rules of Engagement for a Complex World. First Edition. Portfolio, 2015. Hardcover.
