Avoiding Org Structure Pitfalls

There is no perfect org structure. Until you can accept that truth, you will forever be subject to the pitfalls of every attempt to optimize the structure of your team, group, division or enterprise. Building a great culture of collaboration beats org structure every day of the week. That said, you still have to figure it out.

Let’s just get on the table the various ways people try to optimize an org structure. I’m going to list them in the order of priority:

• By Team Size — keep teams to groups of about 3–7 people
• By People — find the best leaders and build teams around them
• By Business — group teams of people working on the same top level organizational goals
• By Function — group teams of people who do a similar kind of job
• By Hierarchy — subtract layers for a flatter org with more individual independence or add layers for more manager oversight

It is possible to have a bad org structure, but never possible to have a perfect org structure. The best org structures balance these methods in a way that is right for the organization’s goals and culture.

In general, I like to prioritize Team Size and People. You have to start with a plan to have good leaders in place, and teams that can work as a collaborative unit.

Next, much debate goes into the battle between alignment by Business vs. Function. Large, purely functional teams have issues building expertise in the business (or organizational objectives). On the other hand, organizations with a million general managers suffer from mediocrity, as there is no specialization of skills to drive teams to a top level of performance for their craft. A layered approach can work well, where you have an overall business unit, with large functional teams, but within those functions you have teams divided or focused on certain product lines or sub-businesses. Some leaders periodically re-org and alternate org structure between functional orgs and business units as they try to optimize on both over time (or just suffer because everyone is always confused).

Overly hierarchical organizations are often derided as stifling to creativity and productivity. The antidote being a magical hierarchy-free organizations where everyone has goals and just knows what to focus on to be productive. While no doubt some organizations have a culture and objectives that lend themselves to making this work, I do not think it is something to overly be concerned about. It is far more important to have an organization with well-sized teams. The problem of having “too many layers” is usually more of a problem of team size in disguise. An organization of 5 layers with 5 people at each layer will have more empowerment and better leadership for individuals at each layer than a flatter org of 3 layers with 2 people at each layer. Team size matters more than number of layers.

But how much of this matters? How much is it worth optimizing your org structure? You need an org structure that is conducive to productivity, leadership and collaboration. But you don’t automatically get these things with the right org structure. And, I’ll take an imperfect org structure any day if I can drive a good culture of not letting org structure get in the way of doing the right things and working across boundaries to meet objectives. Org structure should never be an excuse to not give someone feedback, or seek someone’s guidance or expertise, or bring together the right set of people for a particular project.

Org structure gives you a default path. It guides the default day to day interactions. In many organizations today, that default path might only cover 1/2 the goals of a team. The other 1/2 will always require people to work around an org structure to get things done. This is particularly true in a highly cross-functional role like Product Marketing.

Overall, I say give your org structure some good thought. Keep people top of mind. But don’t over-engineer it. Focus instead on empowering people to not let org structure get in the way.