CXO

Face it: Organizational charts don't work

Can something as simple as your organizational chart impact the company's performance? Executive leadership coach says definitely. In this blog, he explains why.

Recently, I was asked to take a look at a client company's organization chart. It was to be a part of a review on performance and morale. Company management wanted me to review and make suggestions that would help ensure they were accurately depicting their business. After reviewing the first page, I declined.

From experience, I knew it would have been a frustrating exercise (talking to a lot of people and hearing their opinions and recommendations). More importantly, I knew it wouldn't have resulted in any effective changes within the place. By declining, I chose to look after the client's expenses. And my sanity.

The company used a traditional pyramidal structure, i.e. boss at the top, next in command on the line below, their underlings on the next level. As far as I can tell, this structure probably started about 5,000 BC with the Sumerian civilization. After they crashed, it was picked up by subsequent generations of leaders — next being the Egyptians about 2,000 BC. It has existed, more or less, in the same style since then.

Given how successful this reporting and management structure was for all the past civilizations, I am not inclined to recommend it to anyone.

There are tons of management studies that support the reasons for not using a structure like this. Key issues include

- they're always out of date,

- they don't deal with how things "really" get done, and

- they distance company leadership from the important work of the organization.

I like flat organizations: They work when the boss is involved. And, if he or she isn't involved, they show that the leader is not up to the task and should be replaced.

It's not simply for small companies. The critical factor — that the boss is never more than one step away from the person who's doing things — can be modified for even the biggest companies. Apple's structure proves it can work. In that organization, virtually every key area's leader reports directly to Steve Jobs. Nobody "in charge" of a key area is more than one step away from the boss. Consequently:

- decisions are made faster,

- money is spent according to the priorities of the company, and

- there's less culture clash internally with fiefdoms being created by each department head.

If you oversee an organization, reduce the levels between you and those "on the bottom." Challenge yourself to get involved, and you'll be surprised (maybe amazed) at how fast things start moving.

For anyone who really enjoys his or her job, reducing the number of levels will make it more fun — and successful.

About

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

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