Category Archives: Organization Structure

Doesn’t This Look Like a Hierarchy?

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From Outbound Air –

“You know, this is beginning to look like a hierarchy,” Johnny said. “Do you remember Preston Pratney? If there is one thing he railed about, it’s that hierarchy is bad. It goes against all the tenants of Tribal Leadership. Having layers inside the company makes it too bureaucratic, too much red tape. If there is a decision to be made, why should someone have to check with their manager?”

Mary stepped in. “You’re talking about Preston Pratney? The problem with Preston is that he read too many books on leadership. He never understood the purpose of hierarchy. He got it confused with command and control. Hierarchy is necessary, to create this value stream for decision making and problem solving.”

Who Appointed You to Make That Decision?

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From Outbound Air –

“It’s not their role to make a decision like that?” Javier replied.

“Says who?” Catherine baited.

An awkward twenty seconds ticked by on the clock. “Says me,” Javier finally relented. “That is not a decision that my shift supervisors are capable of making.”

“And, who appointed you to make that decision?” Catherine continued to press.

“You did,” Javier replied without hesitation. “My shift supervisors are perfectly capable of handling the day to day uncertainty of running an airline, but the problem of an unprofitable route likely has nothing to do with operations. It could be a marketing problem, a pricing problem. It could be a new competitor. It could be a spike in fuel costs. It could be the discovery of a new oil field in North Dakota, or government throttling of fracking activity. All of those issues could impact passenger load factors and are beyond the level of work of my shift supervisors.”

What Do We Need a Manager For?

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From Outbound Air –

“Right then, if your teams can carry on the same way tomorrow, then what do I need you for?” Catherine stared sternly in the eyes of her executive team.

Peter looked around to see if someone else might fill the void of silence. It was Mary’s turn. “You are absolutely right. My team can carry on the same way, day after day. And they can make decisions and they can solve problems, as long as those decisions and problems are the same as yesterday. But, here’s the rub. Something is going to change. It might be a weather system, a mechanical delay, or a broken flight connection. Something is going to change and that’s when they will need me.”

“Exactly,” Catherine beamed. “As long as nothing changes, your teams do not need you. They can handle all the routine decisions and problems. But, you know that something will change, something always changes.
___
Back to the central question, how do we define the word -manager? What is the role of a manager?

How Big is Job? How Big is the Person?

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“I don’t know,” replied Eduardo. “I just hope he snaps out of it. Ron was our poster boy. For the past couple of weeks, he has seemed distant, removed from his crew, removed from the work.”

“You ruled out alcohol or drugs. Is it a matter of skill, something he can learn, or is it a matter of capability?” I repeated. “You can hope this will fix itself. How much patience do you have?”

“What do you mean?” Eduardo had a new sense of curiosity. “Ron has to snap out of it fast.”

“Tell me again, what has changed with Ron’s role?”

“Well, a year ago, he was supervising a couple of people, making sure the work got done. Now, he has to manage other people who are supervising that work.”

“Is the job bigger, now?” I asked.

Eduardo looked at me, puzzled. “Well, yeah. He has more people, I guess it is more complicated.”

“So the job is bigger now. How do you measure, how much bigger the job is?”

“Measure?” Eduardo had never been asked to measure the size of a job before. “I don’t know,” he continued. “It’s just more complicated, I guess.”

“So, how do you measure the complexity of Ron’s new job?”

Outbound Air – Levels of Work in Organizational Structure now available on Amazon.

Outbound Air

Onward Thru the Fog

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Eduardo was hanging up the phone when I arrived. I could tell he was puzzled.

“It’s funny,” he said. “This is the third time I have explained things to my Ron, but it just doesn’t sink in. For two years, he was doing great, but now, he seems to be in a fog.”

“You are Ron’s manager?” I asked. Eduardo shook his head.

“Yes, in fact, he was a good hire. We started him in a little office with only two people. He grew it to six, now he is at twelve. Somewhere along the line, he lost it.”

“Alcohol, or drugs?”

“No, I don’t think so. He is too conscientious for that,” Eduardo observed.

“But he seems to be in a fog? Tell me what has changed in the past year, going from six people to twelve people.”

Eduardo looked to the far corner of the room, picturing the changes before he described them. “It’s like Ron was supervising the work pretty well, but now he is one step removed. He is now managing a couple of supervisors. Maybe that’s the problem. He is too far away from the what he knows how to do?”

“Is it a matter of skill, something he can learn, or is it a matter of capability?”

Outbound Air, Levels of Work in Organizational Structure, by Tom Foster, is now available for Kindle, soon to be released in softcover.

Outbound Air

The Go-Go Stage

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“That which does not kill you, makes you stronger,” Jim Dunbar grinned. “Our momentum told us we were not likely to die, at least not in that fiscal year,” he said. “We were invincible. So, I signed a lease on the second plane.

“Passenger loads picked up, and I had to hire more people. And that led to a predictable stumble. There was no rhyme or reason for the way we did things. We survived on our tenacity, but our tenacity began to fail us. My wife described our behavior as improvisation. Invincibility and improvisation make for a toxic cocktail. We over-promised, extended our thin resources.

“I remember our first overbooking. We had more passengers than seats. I looked at my schedule, figured we could make the run to Denver, flip the aircraft around and come back for the other group. For some reason, we thought the stranded passengers would wait the four hours. But, a weather system moved in. In spite of our promises, we never made it back, and missed another flight leg with a scheduled full plane.

“To say we flew by the seat of our pants was an understatement. But, at the time, I figured that my team practiced for months. We successfully flew one plane, how difficult could it be with two planes?

Excerpt from Outbound Air, Levels of Work in Organizational Structure, by Tom Foster, now available on Kindle, soon to be released in softcover.

Outbound Air

Who Should This Person Report To?

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“I think we have these roles sorted out,” Peter proclaimed. “I like the picture. It makes sense. But how do these roles relate to each other? I mean, who decides who is whose manager?”

Johnny jumped in. “It’s true. Whenever someone new joins the company, that’s always the first question. Who will this new person report to?”

Jim Dunbar knocked gently on the door. “Hope I’m not disturbing. How are things going?”

“We have a problem,” Johnny declared. “Who decides who reports to whom? Whenever we have a new employee, we all sit around the table and that’s the question. Who will this new person report to?”

Mary looked out the window, but suddenly turned and came back into the conversation. “Usually, we unload the new guy on the manager or supervisor who is the least busy.”

Excerpt from Outbound Air, Levels of Work in Organizational Structure, by Tom Foster, now available on Kindle, soon to be released in softcover.

Outbound Air

How to Explain Levels of Work to Your Team

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From the Ask Tom mailbag –

Question:
I finished your Time Span 101 program and now I understand levels of work. But, I hesitate to talk to my team about it. How do you explain Time Span to a team whose roles are at S-I level of work. I am afraid they won’t understand or will react negatively to their role at S-I.

Response:
You don’t have to introduce the concept of level of work to your S-I team. They already know it. Ask yourself a couple of questions.

  • Do your team members in roles at S-I understand they have a supervisor that gives them task assignments?
  • Do your team members in roles at S-I understand that their supervisor likely receives more in compensation?
  • Do your team members in roles at S-I believe the work they do is different from the work their supervisor does?
  • Do your team members in roles at S-I understand they have some decisions they can make and that their supervisor has the authority to make other decisions?

Your team members intuitively already understand levels of work. When I talk to teams in roles at S-I or S-II, we talk about goals and objectives, decisions to make and problems to solve. We talk about accountability. We talk about who makes the decision at what level of work. We talk about who solves the problem at what level of work. We talk about contribution and how roles fit together.

Your teams already understand levels of work. These are normal managerial conversations to have with your team. These are required conversations.

Defining Levels of Work in a Bank

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From the Ask Tom mailbag –

Question:
You spoke to the Vistage group I attend. I recently transitioned to a new role as the CEO of a lending institution. We are, in essence, structured as a traditional savings and loan, but we only serve a specific target market.

I do not see a model in your book that directly breaks down the strata levels for “banking” organizations. I’m in the midst of a major re-structure, and your info has always been very helpful to me in these situations.

Response:
I am not an expert on banking, so if anyone has specific insights, pile on. The methodology below works for any industry.

  1. Set your strategy. Review your current strategy documents, including Vision, Mission and Business Model. Those are likely already defined for your organization.
  2. Define the functions necessary for your organization to operate. Your core function (that which drives revenue) will be surrounded by necessary support functions. My assumption is that your core function is closing loans to specific institutions in the target market you serve. Your ability to book performing loans drives your revenue.
    • Book performing loans in target market (core function)
    • Marketing, traditional and digital media marketing, including social media (support function)
    • Sales, in the guise of customer service at your branch locations (support function).
    • Operations, including all physical transaction activity like deposits, checking, loan payments (support function)
    • Back office operations, including electronic transaction activity, online banking, debit cards, credit cards (support function)
    • Facility operations, including building, building maintenance, leases and real estate (support function)
    • Security, including physical security, electronic security, and custodial oversight of cash and bank instruments (support function)
    • Regulatory (support function)
    • Legal (support function)
  3. Define the level of work in each function, which is likely the basis for your question. Looking at your core function, booking performing loans in your target market.
    • Loans will likely require leads from the marketing department, driven to a branch location or to a telephone loan department.
    • The lead probably lands on a desk at S-II level of work, someone to do the initial diagnostic workup and complete the necessary paperwork. Much of this work is systematized and gathered on template forms.
    • The loan package is then likely reviewed by a role at S-III level of work to make an initial determination and recommendation to a loan committee. If the loan is missing fundamental elements of collateral or “ability to pay,” this role will likely investigate to determine what is necessary to make the loan conform.
    • The loan will then move to a loan committee, comprised of S-III and S-IV roles. There will likely be specialists at S-III to vet the required elements of the loan. The S-IV roles will look at criteria to determine if the loan integrates into the bank’s portfolio. There may also be an S-IV role to ensure the loan will meet regulatory audit.
    • The institution will also likely field an S-V role, a business unit president, to make sure the enterprise is supported by all the functions necessary to drive the core function.

    Let’s look quickly at one of the supporting functions, physical operations.

    • Teller functions and customer service functions are now automated to the point where this role is mid S-I.
    • Each teller or customer service person has a supervisor or manager who ensures that services are delivered accurately and that cash and instruments foot (and cross-foot) at the end of each shift. The supervisor schedules the number of tellers and customer service personnel on shift depending on historical and forecast activity.
    • Each branch likely has a branch manager at low S-III to manage the overall physical operation. In a small branch, this role might by high S-II, and in a very large branch, this role might be high S-III or S-IV.

    Define the level of work for all the other support functions.

  4. Define the specific roles required in each level of work. The definition of level of work in the previous step goes hand in hand with this step.
  5. Establish the necessary managerial relationships in each function
  6. Establish the necessary cross-functional relationships between each function
  7. Assign and evaluate personnel filling each role.

These are the big steps. If you have questions, please let me know.

The Problem Isn’t Your Boss

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“You seem a bit frustrated,” I said.

“I am, I am,” Drew replied. “I think I do a pretty good job in my role as a supervisor. We have a complicated process with long lead items and seasonal demand. During season, we build to order. Off season, we build to stock. We have certain constraints in our process that slow us down and sometimes things stack up when we overproduce some of our sub-assemblies. All in all, I keep things together pretty well.”

“Then, why the frustration?”

“If I could spend the time analyzing the way the work flows through, look at some things that could be done at the same time, understand where the bottlenecks are, I think we could get more through the system.”

“So, why don’t you do that?”

Drew thought for a minute. “Every time I start flow-charting things out, I have to stop and take care of something gone wrong, something we are out of, a team member who didn’t show up for work. It’s always something.”

“What happens when something goes wrong?”

“I get yelled at. My boss tells me to stop thinking so hard and get back to work. The time I spend working on the system just increases my workload beyond what I can get done in a day,” Drew complained. “I am constantly reminded that my primary function is to make sure that orders ship. I just can’t convince my boss that if the company is to move forward, we need to spend time looking at the sequence of steps to make things run smoother.”

“If you keep getting dragged back into day to day problem solving, fighting the fires of the moment, what is the solution? Who else on your team could buffer some of those problems?”

“Nobody. I am the go-to guy. There isn’t anyone else, and there is only one of me.”

“So, the problem isn’t your boss, it’s you,” I said.

“What do you mean?”

“You will never be able to work on larger problems until your team becomes competent at the smaller problems. You can never be promoted to a higher level role until you find someone to take responsibilities in your current role.”