Dilemmas in the Construction of Hierarchy

With a group of competent people assembled in the same room at the same time, now what? Why organize, how to organize?

Without a why, there will be no coordinated effort toward anything. Most organization founders begin with a personal why, a defined mission and that’s the beginning. The mission may shift over time based on market conditions, maturation of the CEO or maturation of the organization.

How to Organize?
With a defined mission, someone still has to decide what to do, sequence of what to do and resources required to do. In the beginning, it’s the founder. As the organization grows, decisions are distributed from the founder to others. But to whom? And with what authority? We now have a hierarchy, intentionally or by default, based on some value. The nature of that value will determine the nature of the hierarchy and determine its energy flow. Organizations get to pick that value. If the value is power, we create a power hierarchy, not sustainable.

If we create a competence hierarchy, decisions made about what to do, sequence and resources can now be based on competence. The proper distribution of decision making and problem solving goes to those roles the organization identifies as requiring the most competence.

Degrees of competence determine which roles make which decisions. If we draw this on a piece of paper, this is organizational structure. But, what is the design criteria for competence? How do we determine, or consider who may be more competent than another? In a competence hierarchy, we certainly contemplate that we are going to have more than one competent person, so who gets which decision?

These questions determine how we divide up the work, who will have the authority for which decisions and who will be accountable for the outcome of those decisions. At some point, we run into conflict. The conflict may be about the priority of a resource, priority in a sequence or if a task needs to be completed at all. If there are layers of decisions, how many layers? Who decides?

This seems like a ton of questions to answer, and the questions keep coming. How do we define the working relationships between people and keep it all straight? What is the framework to guide us? What are the metrics in that framework?

We started with chaos and order. How do we examine the chaos to find the lynchpin that brings order to the organization? I am a structure guy. If you get your structure right, your issues related to motivation and management largely go away. What’s the lynchpin?

4 thoughts on “Dilemmas in the Construction of Hierarchy

  1. Andre

    And who decides the structure? Those with the most skin in the game? Those with the longest job title? Those who have the highest level of competence? Those who are most persuasive? Those who are two levels above the area of interest? I think it is the latter.

    1. Tom Foster Post author

      Andre, you are on the right track. In the beginning, it is usually the founder, who has little skills at organizational structure. Fast learners have an intuitive sense for this, but honing in on some of the counterintuitive principles may be elusive. Your questions flow through the minds of those in charge. Indeed, who decides? is a profound question.

  2. Ed Burke

    I am on the edge of my seat on who is the lynch pin!!
    As i read the hierarchy of competence I think about the Accountability Chart in the EOS system. This is based on the competency to do the work as defined in each function of the business. Am I thinking correctly? Ed

  3. Dave

    My thoughts went directly to the EOS Accountability Chart too. This is a very timely topic for my company to consider right now, I’m anxious to see this story play out.

    “In the beginning…”
    “As the organization grows…”

    It’s fascinating to see a company grow from a big, small company into a small, big company. At least it’s fascinating from the outside. From the inside, sometimes it feels like a day at the amusement park after eating one too many corn dogs. 😎


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