Mark McDonald

An enterprise tells its story in documents ranging from formal strategies to shared values embedded in the company culture.  One document in particular tells you much about a company – the organization chart.

Take a look at your org chart and you can see not only how work gets done, but also gain insight into the company’s culture, its overall efficiency and the structural risk it is looking to protect itself against.   There is truth behind the term ‘reorganization’ as a proxy for change.  Because if you change any one aspect of these things and chances are you will need to alter your organization chart.  That is the reason I bring this document to your attention as many of use will need to change our structuring in 2010 and successful change starts with knowing your current position.

An organization chart telegraphs how work gets done in terms of the names and descriptions of the organizational units.  An org chart consisting of functional groups hints as the need for strong process flows and collaboration between groups.  An organizational chart based on geography, product or major business process indicates that work is contained within unit with lower collaboration and communications needs.

The number of levels and the average ratio of leadership to associates provide clues about an organization’s efficiency.  Count the number of sub groups reporting to the next level up, or the number of groups shown at the next level of detail within a group and you get an idea of the ratio of managers to associates.  The more groups, the more management as each team needs a manager.  The more managers, the more hand-offs in company processes and the potential for greater efficiency improvements.

The names of groups within an organization and their explanation provide hints about the deep risks the company seeks to insulate itself against.  In general, functional organizations – which include most IT organization – exist to guard against a risk that they do not have enough skills.  Process or divisional oriented groups hint at concerns over local autonomy and an inability to collaborate.

Why bring all of this up?

Simple, many of us have changed the way we work, our staffing levels etc in order to meet the demands of 2009.  More of us will look to reorganize the enterprise or IT in 2010.  Consider the organizational impacts of a change whenever executives ask, how is this going to work and who is involved.  Beware changes that promise significant improvement without an organizational impact.  While both are possible, they are more difficult without coordinating operational and organizational changes.

Knowing what an org chart tells us about the company or group helps us create sustainable and successful change.  Without this understanding, we can implement point solutions – a new infrastructure management approach for example – without addressing the organizational aspects.  This creates a mismatch between how we want to work and how we are structured.  Mismatches lead to friction and inefficiency expressed in terms of higher costs, greater degrees of management and governance, turf battles, or heavy organizational staff.  When these or other symptoms arise, take a look at your org chart to understand what it says about you and your company.

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Category: Leadership Tools     Tags: 2010 planning, Business, Business Leadership, IT organization, Tools

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