Category Archives: Organization Structure

Not a Communication Problem

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Thinking about competence, we begin with individual competence. Ultimately, however, we have to think about organizational competence. It not just great output from a single performer, but the output of the organization as people work together.

Organizational structure is simply the way we define the working relationships between people. We represent this on a piece of paper called an organizational chart. We have both vertical working relationships and horizontal working relationships. How well these relationships work will determine the quantity and quality of organizational output.

And, this is where the trouble begins. On the org chart, we draw lines between people, up, down and sideways. We think we understand what those lines mean, but until we specifically define the lines, we will experience organizational friction.

Working relationships are defined by two things, accountability and authority. Most organizational friction looks like a communication problem or a personality conflict, but that’s just a symptom. Underneath, we have a structural problem where we have failed to define, in that working relationship, where and what is the accountability. And, in that working relationship, who has the authority to make what decisions.

People tell me they have a communication problem. I don’t think so. I think you have an accountability and authority problem. Because you failed to define it.

Individual Performance, Not Enough

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In the beginning, there was a Founder. Who had an idea to start a company. Perhaps it was a hobby. Perhaps it should have stayed a hobby, but, then that wouldn’t make for a very good story.

There was work to be done, and it was the Founder who was doing the work, there was no one else. And, there was work left over, so the Founder hired some people, mostly friends and family to help out. Each of these people contributed according to their own ability, work organized around each of their talents. And, there was still work left over.

At some point the Founder realized work could no longer be organized around the people. The people had to be organized around the work. Roles emerged, specialized roles for people to play. Individually there were good performers and poor performers, but individual good performance does not necessarily translate into organizational performance. Not only do people have to be effective in their individual roles, but those roles have to work together to create a competent organization.

Organizational structure is simply the way we define the working relationships between roles. Individual high performance is not enough, we have to look at the way people work together.
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Watch Tom Foster on Chris Comeaux’s Anatomy of Leadership.

Commitment to the Work

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“What do you mean, make it necessary?” Max looked confused. “We know what we were supposed to do in that handoff meeting. What more should I do, as the leader, to make it necessary?”

“Three things,” I replied. “First, what is the vision, what does that handoff meeting look like, feel like, taste like? Your vision of the paperwork is NOT a big checkmark across the page. Your vision of the paperwork is individual checkmarks on specific line items. More important is the discussion between the estimator and the project manager about each line item. So, what does good look like.

“Second. Does the team, the estimator and the project manager, have the capability to understand the decisions and problems, and the capability to make those decisions and solve those problems? Max, you are the leader. It is your judgment I depend on to assess their capability and make the necessary resources available.

“Third. Are they committed to the work? A checklist looks like compliance, but compliance isn’t good enough. You, as the leader, need commitment to the work. It is your role to create the circumstances for that commitment to exist. If you just needed compliance, you could do that with pizza. But, pizza doesn’t create commitment.”

Skip the Detail

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“We understand handoffs,” Max agreed. “That handoff between estimating and project management is so critical that we have a hard agenda, 150 boxes to check. Now, most projects only have, maybe, 50 critical items, but we go through the checklist just the same.”

“And why do you use the checklist?” I asked.

“What we found was that the output from estimating, I mean, it was a great estimate, but sometimes it wasn’t what the project manager needed. Sometimes, we estimate in one unit of measure, but install in a different unit of measure. So we mapped a checklist to make sure that the output of estimating matched the input requirements for project management. It’s all about outputs and inputs.”

“So what went wrong? You identified a problem with the handoff meeting that didn’t get discovered until you were in the field. What happened with the checklist?” I wanted to know.

“I looked at the paperwork. Both the estimator and the project manager just got lazy. Instead of checking all the items, there was just a big checkmark that covered the page. They got busy and skipped the detail. They were trying to save time.”

“And saving time turned out to cost time,” I nodded. “Why didn’t they slow down and take the time?”

“That’s the $64,000 question,” Max replied.

“No, it’s a really simple question. They didn’t examine the detail because you didn’t make it necessary to examine the detail. Often, things don’t get done, because we don’t make them necessary.”

Scale This Thing Up

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“You made it halfway through the year. You should have your numbers by now. How did it go?” I asked.

Max grimaced. “You know we have done pretty well in the past, so we wanted to see if we could scale this thing up. We had a firm target, and we were firing on most cyclinders. But we only made 75 percent of goal. I can’t put my finger on one specific thing, seems like a bunch of little things.”

“Let’s start with sales,” I said.

“Sales were good, contracts in hand, but a good portion of the projects sit in backlog. We just couldn’t get the work finished so we could bill it.”

“So, let’s look at project management,” I nodded.

“That’s where some of the problems began. There were mistakes in the handoff meeting between estimating and project management. We didn’t discover the mistakes until we were in the field. We were short some materials. Man hours were estimated too tight, so we had crews that got stuck on one job, when they were supposed to start another job. Once the schedule started piling up, we got further behind. Then a permit didn’t come through. None of this is dramatic, but it all adds up, and so here we are.”

“One of the biggest problems in a company trying to scale is handoffs,” I nodded. “You can have one or two core systems that do great, but you have to get ALL your systems in sync. Work moves sideways through the organization. First place to inspect is the handoffs, where work moves from one function to the next.”

The Distraction of Advice

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Al Ripley believed, for every management problem, there was a management consultant. As issues surfaced in meetings, Al would look down his nose, over the top rim of his glasses, and ask the inevitable. “Don’t we know a consultant that can help us with that?” Outbound Air.

Consultants may be necessary and provide helpful direction, but a consultant will never lead you to the promised land.

The lower the capability of the team, the more consultants, the more tools will be purchased to offset. Those temporary measures can only be hurdled by building the capability of the team. Success can only be achieved with the right tools and guidance in the capable hands of your team. It has less to do with the guidance and tools and more to do with the capability of the team.

Why Do Mission Statements All Sound the Same?

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If I broke in and stole all the mission, vision, value statement plaques, mixed them up and replaced them, would anybody notice?

Timespan gives us insight.

We are very good at planning. Planning is temporal, mostly short term, rarely extending out more than 12 months. And, we are good at it. We can imagine the specific requirements, resources, people, interim checkpoints, quality standards, inspections, proofing and format of the final output. All of this is tangible, concrete.

Beyond tangible concrete ideas, are intangible conceptual ideas. Measured in timespan, those ideas are further into the future. And we are not very good at thinking in those terms, much less expressing ourselves in writing.

But, we are told we must. We must think about the future. We must think about the future of our organization and we must do so in the form of organizing documents, mission, vision, values. And, we struggle

Sure, we can dream, but most dreams lack meaning, and it is meaning that drives our organizing documents. Those organizing documents are in the pursuit of meaning. A company can dictate a purpose, well laid out in a plan, but to gain enrollment from our teams, the mission of the company seeks to define its meaning. Without meaning, it all falls apart, eventually.

Meaning is seldom found in a 12 month plan. Meaning requires us to think further into the future. We are mostly ill-equipped to do this. We don’t spend much time thinking conceptually and when we do, we all sound the same. Hence most mission statements sound the same. “To be the premier provider, serving our customer with value add, providing shareholder value for their investment.”

What is meaningful about what your organization does?
What is captivating to your organization’s imagination?
What is helpful to your community?
What will sustain your organization beyond your 12 month plan?

Maslow and Timespan

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Abraham Maslow’s pyramid was a hierarchy. He called it the hierarchy of needs (not wants, not desires, not recommendations). Humans have different levels of needs. The dynamics in the hierarchy dictate that when we are threatened at a level below, we must immediately retreat to that level and cannot emerge until that level is satisfied. Pyramids start at the bottom.
V – Self Actualization
IV – Importance
III – Belonging
II – Security
I – Survival
Most people focus on the content of each level, but each is more complex based on timespan.

Survival needs are immediate. Air, water, food, protection from the elements, cold, heat, exposure.

Security needs are identical to survival, but the timespan is longer. We need air, but we need sustained clean air. We need food for today and we need food for tomorrow (enter the refrigerator). We need a blanket today, but we need a condominium for tomorrow. Important to note, if our immediate survival is threatened, we don’t think much about the condo.

Belonging to a group is a basic biologic need. Animals belong to herds or packs as a matter of longer term survival. Wise animals stay to the center of the herd as the periphery gets picked off by predators. Humans belong to conceptual herds. Membership involves rituals to remain in good standing with the conceptual herd. The timespan associated with group belonging is longer than either survival or security.

Importance raises the level of complexity. Passing a membership ritual may allow a person to remain with the conceptual herd, but to cement that relationship requires meaningful contribution. It is a human need to make important contribution to a group that individual holds as meaningful.

Self-actualization is the most complex human need, some never reach this level. The timespan associated with self-actualization is well into the aspirational future. Indeed, some legacies contemplate behavioral impacts beyond death. While the other levels in Maslow’s hierarchy are self-centered, or selfish, this level is selfless, concern for contribution to community, as defined by the individual. Elon Musk wants to go to Mars.

Timespan as a Measure of Capability

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There is a famous psychology experiment using marshmallows and children to illustrate delayed gratification. Walter Mischel’s study collected data about participants and their choice to eat one marshmallow now OR wait fifteen minutes for the promise of a second marshmallow. Participants were then assessed years later where stark differences were observed related to academic achievement, health, obesity and SAT scores.

While the study seems to indicate a subject’s willpower or self-control, it can also be seen to illustrate an individuals timespan framework. What sacrifice can be made now for an improved future outcome?

Why organize for a better future outcome? Why not eat the marshmallow, or all the marshmallows now? If the problem is hunger, it certainly seems like a proper solution. Except, at some point, we might get full. And, we might even have some marshmallows left over for later. Boom. Delayed gratification becomes a concept in the scenario “Be kind to your future self.”

It also opens up the possibility of being kind to other people with our leftover marshmallows. In children, we see this as sharing. In adults, we see this as trade. Sharing is not a one-sided transaction, it is sharing now with the promise (at least hope) that at some time in the future, when we are out of marshmallows, that a friend would reciprocate.

This example illustrates short timespan options, but what if the organizational sacrifice is larger? Can we organize more complex sacrifices to solve more complex problems? Can we commit our time in research and study with no near-term payoff to create a technology in the future that will solve more complex problems?

What sacrifice can be made now for an improved future outcome? A bag of marshmallows might satiate immediate hunger, but what about our hunger for tomorrow? And what about next week? It has been said that man cannot live by marshmallows alone, so what of the health impact of a diet of sugar treats? Enlarging the problem of feeding an individual to feeding a family, to feeding a community, to feeding a nation-state, it is not just detail complexity, but complexity defined by the uncertainty of the future.

Would you agree there are some problems in the world that most people can solve?  But, as the complexity of the problem increases, some of those people will struggle. We can measure that complexity in timespan.

Timespan becomes a proxy for problem complexity with a concomitant proxy as a measure of human capability.

Horizontal Accountability and Authority

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Organizational structure is the way we define the working relationship between two people with respect to accountability and authority. Vertical relationships are managerial, assumptive in nature, it’s the manager who has both the authority and the accountability for output.

Horizontal relationships, however, are tricky. Two people are required to work together but neither is each other’s manager. Notice the word is required, not recommended, not suggested, but required. In that working relationship, who is accountable and who has the authority? This is the dotted line dilemma.

And this is a dilemma, because most companies fail to define the accountability and authority in horizontal working relationships. Most companies hope the two people will just figure it out and get along. But, they don’t. The trouble presents as a communication problem or a personality conflict, when it is in fact, a structural issue.

My favorite example is the marketing director and the sales director. Neither is each other’s manager, but they are required to coordinate together. We hope they would be able to figure it out, but they don’t, because we failed to define the accountability and the authority in that horizontal working relationship.

The marketing director and the sales director are both accountable to construct their respective annual budgets prior to December of each year. They are also required to meet and coordinate where things require coordination. The marketing director may plan and budget for trade shows, but must coordinate with the sales director to allocate sales people to participate in the trade show booth. The sales director may plan and budget to add additional sales people to the sales team, but must coordinate with the marketing director to add more lead flow from the marketing system.

So, if the marketing director calls a meeting with the sales director, is the sales director obligated to go? Yes, why?  Because we have established an accountability for respective annual budgets and required that they coordinate.

Of course they have to schedule the coordination meeting at a suitable time, but they are required to do so.

Defining the accountability and the authority in these horizontal working relationships is what makes them tick.