Why Organizational Structure?

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What is organizational structure? On a single piece of paper, it’s called an org chart.

Organizational structure is simply the way we define the working relationships between people with the organization. All social settings have a social structure. Parent-child, teacher-student, politician-constituent, minister-congregation, coach-player, manager-team member. The social structure helps us understand what is expected and what are the norms of behavior.

Organizational structure in a Management Accountability Hierarchy (MAH), helps us understand the working relationships between people in the company. It is important to know who has the authority to make decisions, the authority to solve problems (the way we would have them solved), but most importantly, who is accountable for output.

Managerial roles are stacked in levels of work so we can more quickly understand the context in which that role is working.

Levels of Work

  • S-V – Business Unit President or SME CEO. The context is on the entire enterprise as it sits in its marketplace.
    Timespan 5-10 years.
  • S-IV – Executive manager. The context is the many parallel systems that have to work together. Timespan 2-5 years.
  • S-III – Manager. The context is on a single serial system, or a single critical path. Timespan 1-2 years.
  • S-II – Supervisor. The context is on the work in hand in the near term. Timespan 3-12 months.
  • S-I – Production. The context is on the work in hand today, tomorrow and next week. Timespan 1 day to 3 months.

How Many Manager Levels?

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From the Ask Tom mailbag –

Question:
The template you sent out looks like it only handles five levels of work. Our organization has seven manager layers, total headcount 62 people. How do we fit in the extra two layers?

Response:
The reason you have more than five manager layers in your company is that you use some other criteria to define a managerial layer. You decided someone in your company needed some manager experience, so you promoted them with a new title, and gave them someone to manage. Your criteria for creating a new manager level was that someone needed experience. Your criteria has nothing to do with the complexity of problem solving or decision making. You created a managerial layer as an accommodation to a single person. Don’t organize the work around the people, organize the people around the work.

With a headcount of 62 people, I can safely assume that your company should have no more than five layers and possibly needs even fewer. Stop looking at the people you have, and look at the work. What is the necessary work required to accomplish your organization’s mission? When you base your organizational structure on the complexity of decision making and problem solving, the work naturally falls into the levels described below. Using that framework, you can identify where your organization is bloated and where it is thin (too thin).

Levels of Work

  • S-V – Business Unit President or SME CEO. The focus is on the entire enterprise as it sits in its marketplace.
  • S-IV – Executive manager. The focus is on the integration of departmental workflow. Looks closely at work handoffs from one department to another and the output capacity of each department as it sits next to its neighboring departments.
  • S-III – Manager. The focus is typically on a single department, which contains a single serial system, or a single critical path.
  • S-II – Supervisor. This is a coordinating, implementing role, making sure production work is complete, within spec and on-time.
  • S-I – Production. The focus is on pace and quality, how many units at a specific spec.

Art Form or Detective Work?

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From the Ask Tom mailbag –

Question:
Love it – the four levels of thinking directly related to the flow of inputs, manner and tempo. This helps so much in understanding an additional vector of complexity, in addition to future ambiguity (as measured by timespan).

Is there a measure that is commonly used and can be attributed to positions in a Requisite Organization design? Can we measure the amount of activity needed in each/any of the four levels to know what type of sophistication a) the org needs at that level and b) that a candidate has? Or is it intuitive only (we sense it and we know it when we see it)?

Can you use this to help bring clarity to the org chart?

Response:
Some would say that identifying capability is an art form, know it when we see it. My take is that it’s more detective work, assembling clues within a framework. The brilliant insight in the question is the focus. Typically, in an attempt to identify capability, we focus on the person. More brilliant, in the question, the focus is on the work, flow of inputs, manner and tempo.

I don’t judge people, I’m not very good at it. But, I DO judge the work. My calibration of level of work always ends with timespan, but at first blush, timespan might mislead, I need other clues, and then timespan falls in place. If all projects are one-week projects and we have twenty of them, it might seem the timespan is one week. But, to handle twenty simultaneous projects, the start time and the stop time begins much earlier and ends much later than the one-week project.

Before the projects start, we have to examine, in all the projects, what is the same? Can we apply the same solution to identical problems? In all the projects, what is different that requires a unique solution? What is our capacity to handle twenty simultaneous projects? Do we need two project managers or four project managers? If we only have two PMs and need four, where will we find two more? What steps in the project can be started immediately? What steps can be done at the same time? What steps must be done sequentially? When we start to answer those questions, we find the timespan is much more than one week?

Laying out the org chart, I generally use a pre-cursor document (spreadsheet) that has columns for each function on a team, or columns for each team in a department, or columns for each department in the organization. The rows in the spreadsheet designate level of work. If you would like a copy, just drop me an email. I use this spreadsheet to clearly identify the level of work before I translate the structure into an org chart.

Assessing Capability

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“Your turn,” I said. “Step me through these four levels of work and tell me where you think Jason is struggling.”

Elisa started slowly.

  • Direct action – Jason began as a project manager. We started him on simple projects, things (variables) came at him slowly enough where he had the time to immediately respond, and in that, he was very effective.”
  • Diagnostic Accumulation – Jason did so well on a single project, that we gave him two simultaneous projects. The just reward for hard work is more hard work. With two projects, he did the second project the way he did the first project. He was able to effectively put things together, recognize similarities, connect the dots.
  • Serial Thinking – is where Jason begins to struggle. We asked him to work over the shoulder of junior project managers, up to twenty simultaneous projects. We thought the project management software would handle all the detail, but the sheer volume of decisions and problem solving required Jason to think ahead, anticipate. He had to play “What if?” He had to look at twenty projects and see all the things that were the same, simultaneously understanding the nuanced differences between each project. He had to put a system together and that’s where he struggled.
  • Interactive Systems Thinking – is way beyond Jason. Project management sits inside our organization next to estimating, procurement, logistics, workforce and finance. Most of that is outside of Jason’s scope.

“And, so, where would you peg Jason’s level of capability?” I asked.

“Now, it’s very easy,” Elisa nodded her head. “Jason is on the upper end of Diagnostic Accumulation, but struggles with Serial Thinking.”

“Understanding this framework, can you now, as Jason’s manager, more accurately determine what project assignments, how many, how complex that Jason can effectively handle?”

Four Levels of Work, Four Levels of Capability

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“Okay, okay,” Elisa replied. “You are right, easy to see the number of variables in a single project multiplied by twenty projects.”

“This will help us understand the complexity of what we are asking Jason to do and Jason’s capability to actually do it. When we look at levels of work, identifying the level of work in a project, we have to look at the variables. More variables, the more complex the variables, the more difficult the task, more difficult problems, more difficult decisions,” I began to lay the groundwork.

“We understand projects and we understand variables,” I continued. “Let’s look at Jason’s capability* to effectively respond.

  • Direct Action – are variables we can deal with one at a time, that come at us at a pace where we can see it arriving and deal with it.
  • Cumulative Action – are variables that arrive together, where the pace of incoming is faster. We are required to diagnose things together (diagnostic accumulation). We can solve problems that look alike the same way, but only if we are able to see those similarities quickly enough.
  • Alternative Serial Thinking – are variables that arrive in groups, the pace of incoming groups is so fast that to effectively deal with the problems and decisions, we have to anticipate. That is why this level of work requires as much thinking (ahead) as it does action.
    We have to think of each group as a system, with internal cause-and-effect elements.
  • Mutually Interactive Groups – are groups of variables that, as they arrive, begin to impact other groups of variables. If we can see each group as a system, we have incoming systems that impact other systems, systems thinking.

“Our ability to think and act effectively is an accurate way to understand an individual’s capability. You can also see the progression in variables as we move from five simultaneous projects to twenty simultaneous projects.”
——-
*Four levels of mental processing. Elliott Jaques. Requisite Organization

Complexity of Similar Projects

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“Jason is our best project manager,” Elisa described. “But, I gave him just a little bit more responsibility and he is failing. Not only that, it’s impacting the rest of our project management team.”

“How so?” I asked.

“When Jason started here, he did so well on his first project that I gave him another project at the same time, two projects. And, he did that so well, I gave him a third project.”

“And?”

“After a year and a half, I asked him to look over the shoulder of another junior project manager, who was struggling with two projects.”

“So, that’s three projects plus two projects,” I confirmed.

“By then, he already had two more projects himself, so that would be five projects plus two projects,” Elisa replied.

“I see where this is going. He is failing. How many projects does he have on his plate, now?”

“Well, we have five project managers on the team. Everyone is handling two to three projects. I just asked Jason to look over everyone’s shoulder and make sure all the projects are running smoothly.”

“I have ten fingers and ten toes, how many total projects?”

Elisa stopped to compute the number. “Okay, let’s use all your fingers and toes, let’s say twenty projects.”

“Twenty projects is different from his original five projects,” I started. “Let’s talk about the complexity of twenty projects, Jason’s natural capability, and where the mismatch may be. Looking at your project management software, how many variables on a single project? Are the projects all the same, with the same variables? How are the variables grouped into phases, related to time? Can some variables be accomplished simultaneously, while other variables depend on each other and have to be done is a specific sequence? Now, multiply all that by twenty. Handling five projects is one level of work. Handling twenty projects is a different level of work.”

Something HR Cannot Do

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“As you describe training vs coaching, I get this sinking feeling,” Marie shook her head. “Coaching is time consuming, tedious. I have important things that I have to get done. I simply don’t have the time. Isn’t this something HR could handle?”

I waited. Marie knew the answer to her last question.

“Marie, you are a manager,” my turn to nod. “What more important task, project, responsibility do you have than to build the infrastructure of your team. The reason you have all of these other important things to do, is because you did a lousy job of coaching, building your team in the first place. You do this job well, your life, as a manager will be wonderful. You do this job (coaching) poorly, your life as a manager, will be miserable, and for a very long time.”

But, Training is the Easiest Option

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“But, training is my easiest and fastest way to get James some help,” Marie protested. “I told you I don’t have time to coach.”

“There is a short story about someone, at midnight, looking for the keys they dropped in the parking lot,” I started. “Where did you drop your keys was the question. Over there, by my car, was the response. Then, why are you looking over here? Because there is more light over here.”

“You are saying I am looking in the wrong place?” Marie asked.

“Training is the easiest and fastest. You can shove James off to someone else, but that may not be what James needs. Training only gets you so far. Did you know I was a champion ice skater?”

Marie was surprised at this turn in the conversation.

“Little known fact,” I said. “At least I will be a champion ice skater if you will agree to be my coach. Two things you know about my ice skating behavior – I have a strong right push off the skate, and my bootlaces are untied. As a habit, I am sloppy about my equipment. The knots in my laces are loose and within minutes, they come apart, the laces drag the ice. As my coach, you want to be positive, but my laces are untied. Do you ignore this weakness, or is it part of your obligation, as a coach, to deliver some negative feedback?”

“Well, yes, I have to tell you to tie your bootlaces,” Marie was hesitant.

“So, I tie my laces, secure. Am I now a champion ice skater?”

“No,” Marie was more sure of her response.

“Training only gets my bootlaces tied. Champions only come through coaching. You have to get my bootlaces tied, but if you want me to be a champion, you have to work with my strong right push. James may understand, through training, about schedules, workloads and capacity, but if you want James to become a champion, it requires coaching.”

No Time to Coach

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“But, I don’t have the time to coach James,” Marie complained. “He should be able to figure this out on his own. I’m a manager, not a mentor, we have work to do. I don’t have time to be a counselor to everyone on the team. Can’t I just send him to training?”

“Interesting use of mixed metaphors,” I replied. “Let’s look carefully at the four managerial processes you used in the same sentence.”

  • Coaching – is a process where you work with the team member to fully understand the role, the scope of the role, required behaviors, supportive habits to get the work done.
  • Mentoring – is a process, usually performed, not by the manager, but the manager-once-removed (MOR) to help the team member discover their own potential, and seek opportunities to apply that potential in training, stretch projects and career ladder progress over time.
  • Training – is a process, usually prior to an expected behavior to learn, step by step, the mechanics of that behavior and the skill required to competently engage in that behavior.
  • Counseling – is a process where a manager only has a limited scope. Usually centered around a personal, issue, the manager may seek to clarify, share a similar experience and then, if appropriate, refer to a professional skilled and experienced at assisting people with those types of issues. Don’t play amateur psychologist.

“All of these processes are valuable, but the application will depend on the context.”

Moving From a Level of Competence

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“If James sees the world in a whole new way, not as a set of unbending rules, but rules in the context of reality, how competent is James at this new approach?” I asked.

Marie was quick to answer, “He’s terrible at it. He appears unsure, he questions, so the people around him question. I agree that it is a better idea to check the project status before we show up, but now what? His crew becomes disorganized, they don’t know what to do.”

“Do you think, with more experience, that James will get better at anticipating project delays and get better at deploying his crew in a different direction?”

“Of course,” Marie replied. “It’s just, that it’s a mess now.”

“When James showed up on schedule without regard for the project status, how far did he have to think in the future?” I asked.

“Not very far,” Marie observed. “It was easy, plan for the project schedule, whatever the schedule says, is what he planned for. He didn’t have to think that far into the future.”

“And, now that James checks project status before he shows up, how far does he have to think into the future?”

“It’s much different,” Marie replied. “He has to think ahead and create contingency plans so his team knows what to do in the event of a schedule change.”

“So, he is getting better at detecting a schedule change, AND, he is in learning mode in creating contingency plans. You’re his coach, you now have some direction on where he needs your help. What questions can you ask James, where he focuses a few more days in the future and confidently directs his team in a different direction? What you are observing in James is a maturation in timespan. Maturation doesn’t move from one level of competence to another level of competence. It moves from a level of competence (always abiding by the rules) to a level of awareness (the rules don’t always fit reality) that creates confusion and a bit of struggle. Help James through that struggle, he will become more competent, in due time.”