Platt Perspective on Business and Technology

Connecting everywhere and all the time, and its impact on structure in markets and organizations – 3: finding the right organizational complexity balance, continued

Posted in business and convergent technologies, strategy and planning by Timothy Platt on September 10, 2011

This is my third installment in a series on planning and developing the right organizational structure for your business, and with the right levels and types of organizational complexity in the right places (see Business Strategy and Operations, postings 187 and 189.) A flat, simple and direct table of organization does not always work and neither does organizational structure in depth with finely drawn lines of management and of direct communications.

My objective here is to address two questions that I posited at the end of Part 2: finding the right organizational complexity balance.

• How do you find the right balance of structural and organizational complexity, and openness and flatness?
• How do you know when your organizational systems are drifting off course?

Several general points immediately come to mind that would go into any operationally and strategically effective responses to these questions:

• Whatever decisions are made as to organizational model, this is something that any business needs to consider, and it is one that needs to be reviewed again on a regular basis.

I write that from experience in seeing and working with for-profit businesses and other organizations that have, for example, outgrown the effective range of scalability of an organizational model that may have once been effective for them, but that now simply leads them into inefficiencies and avoidable conflicts. As a specific example, I would cite a medium sized nonprofit that I have worked with as a part time consultant. Their CEO and his senior staff found themselves spending way too much time working on the wrong things because they were still operating as if a smaller startup – and the complexity of their operational and organizational needs no longer meshed with their table of organization or their basic, underlying organizational model. These people were in effect forced by their organizational model to spend so much time focusing on issues that others should handle, that they did not have adequate time or energy left to put needed effort into the areas and issues they should have been focusing on.

• The most effective organizational model and table of organization layout for your business or organization is not necessarily going to be optimal for other organizations, and even in your general marketplace and of similar size by head count and other commonly considered criteria. It is the model that best fits your operational and strategic planning, goals and priorities.

To take that a bit out of the abstract and with nonprofits in mind as I write this, major ongoing fundraising programs generally build around dedicated teams that become expert in all of the details for managing them and in making them work through successions of seasonal and annual campaign events. If you have a larger nonprofit such as The Leukemia & Lymphoma Society, this would mean ongoing national fundraising programs like their Light the Night® and their Team in Training®. Organizationally and operationally these would fit into a larger, more comprehensive development and fundraising line on the table of organization, along with other perhaps smaller events organizing teams and each of these major initiatives would have at least some people who had a primary focus on their major national program. This would be reflected in the table of organization too.

A for profit, commercial enterprise might have corresponding divisions and organizational and operational structure that is reflected in its table of organization, that meshes with and supports specific separable business lines – each in effect owning a distinct area of commercial connection to a marketplace and its potential customer base. There, that may mean groups that focus more on B to B and groups that focus on specific B to C areas though there are as many ways to divide this up as there are businesses.

• Bottom line, what is optimal and best at any given time would mean what most effectively supports the business or organization in gaining and retaining market share then, and as cost-effectively as possible.

And I will add one more point here, as a cautionary note if nothing else:

• There are always costs in updating and changing the business model or an operational model designed for carrying it out, or the table of organization for who is responsible for what in fulfilling the goals of the business and operational models. So you should only make fundamental changes when that really is necessary, and with a goal of making any change that you do try, well thought out and as smooth and easy for everyone involved as possible.

I am going to pick up on that point – transitioning through change, in my next series installment and will finish this posting with a simple but important observation related to that. Need to update your business model can and all too often does come from the outside and that can happen with little notice. A sudden and dramatic change in your core marketplace due to entry of new competition can force a scramble to catch up, or at the very least to avoid falling behind. Think of new and emergent product or service approaches that you have to meet the challenge of in order for your offerings to remain competitive. Legislated regulatory change can come upon you suddenly too, and certainly where a court decision forces everyone in a marketplace to make changes that were unanticipated when that regulatory law was initially passed. There are many other possible reasons here that I could cite instead, but these two should prove the point. You do not what to make fundamental changes in your organization simply to make changes, but when you do make changes and even significant ones on how you do things you may have to do so with a measure of alacrity.

I am going to, as stated above, continue this basic discussion in my next series installment. You can find this series and related postings in Business Strategy and Operations, and also in Ubiquitous Computing and Communications – everywhere all the time.

Before I post part four in this series though, I will publish a piece on business models and what you do, organizational models and how you organize to do that, and the table of organization and who does what in carrying all of this out, as a background piece.

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