Tag Archives: authority

Not an Ideological Discussion

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From the Ask Tom mailbag –

Question:
I have been told that my org structure is misguided, that I need to flatten my organization out, that my various teams should be able to make their own decisions. What gives?

Response:
What seems like an off-the-cuff remark about the way you run things, turns out to be a bit more complicated. The organizational structure is not something dictated by a friend, or a consultant, based on some ideology about modern companies and the new look of the corporation.

Organizational structure is simply the way we define the working relationships between people. If we draw it on a piece of paper, it looks like an org chart. If you give me your org chart, it tells me how you think about those working relationships with respect to these two questions –
Who has the accountability for output?
Who has the authority to make what decisions?

Your org structure defines those two questions according to your business model. Your business model will guide you to the structure you need based on the complexity of the decisions you make and the problems you solve. Easy decisions and easy problems don’t need much structure. But no one builds a growing business based on easy decisions and easy problems, things become more complex. The complexity of the work provides clues to the structure you need.

How complex is your business? If your company replaces residential roofs, one project at a time, with no overlap between projects, things are pretty simple. Add a second story to that residential roof and suddenly you have more safety issues. Simultaneous contracts add more complexity with scheduling, crew capacity, material receiving and staging. Shift to commercial roofing and things stack up faster. Professional buyers enter the picture. OSHA oversight and compliance. Insurance and risk management. Code compliance and risk retention. Cash flow and credit facilities. Operational and quality assurance systems. Warranty and maintenance contracts. There are multiple levels of complexity, all part of the business model which dictates the structure required.

You can remove the management layers in your company, but the complexity remains. You should have no more layers in your company than is required by your business model. But removing layers will leave some decisions to be made by people who do not have the capability to make those decisions. Removing layers will leave some problems to be solved by people without the capability to solve those problems.

Organizational structure is not an ideological discussion.

In Sync

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“I truly want to make my team happy,” Melanie wished out loud.

“Please don’t focus on making team members happy,” I replied. “Being happy may be a byproduct, but what we want is engagement. What does it take to keep team members engaged in the work that we do?  As managers, we do things instinctively to get the work done, without thinking about the longer term impact of engagement. Getting the work done is short term, to meet the weekly metrics.” I paused. “We need to think about getting the work done well for the next five years. We do that best with a team we can keep together, working in sync with each other.”

“We almost always meet our metrics,” she said. “But, it feels forced, overtime, uneven effort from some team members. I mean, we get there, but sometimes, it’s not pretty.”

“So, even if the team meets their metrics, but isn’t working in sync, where are you, as a manager?” I asked.

“That’s the word,” Melanie smiled. “Working in sync? I can force the team, but it requires me to be dominant, create pressure, in short, get the team to be compliant to the metrics. I am exhausted at the end of the day.”

“That is why, in building an organization,” I continued my thought, “it is not enough to have the right people in the right seats, we have to think about how the seats work together.”

“That sounds nice for an orchestra,” she chuckled, “but what about here, where we have to get some work done?”

I smiled back. “In every working relationship that we design, we have to think critically. In this working relationship, what are the accountabilities we expect? And, in this working relationship, who has the authority? Authority to make decisions and solve problems the way we would have them solved? It is the design of the structure that creates team member engagement. It is the design of the structure that creates flow, everyone working in sync.”

Without Profit

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“You continue to use the term managerial system,” I started. “What do you mean?”

“In the beginning, in a startup, every company is haphazard, organizing the work around the people they have. At some point, there is still work left over and the founder realizes work can no longer be organized around the people, we have to organize the people around the work. Specialized roles emerge. And, then those roles have to work together.”

“And the system?” I asked.

“Roles cannot be haphazard, working together cannot be haphazard, too much friction against profitability. I have seen companies work extremely hard and never make a profit. Eventually, they have to make a profit or the company dies (a long slow death exasperating death). For a company to survive and be profitable, they have to create a managerial system, what we call structure.”

“Structure?” I prompted.

“Organizational structure is simply the way we think about, often on paper, the accountability and the authority in the working relationships between people,” Pablo stopped. “Two types. Vertical managerial relationships and horizontal cross-functional relationships.”

“And this structure is important for profitability?” I clarified.

“Yes, and this structure is important for the sustained creative output of the people who work in the company. Because without that, the company will also die, become a corrosive institution where no one wants to work.” Pablo paused again. “To stay green and growing, the managerial system has to be vibrant and well-thought-out.”

What is Possible?

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“I just finished the org chart for my team,” Kayden announced, holding up a piece of paper with circles and arrows.

“I see that,” I replied. “Why do you think an org chart is important? It’s only a small team, 18 production people and two supervisors, then there is you.”

“You said it was important, remember?” Kayden was quick to respond.

I nodded. “Yes, I did. But, do you remember why?”

“So people will know who to report to,” he followed my nod.

“So, you think you were made manager so people could report to you?” I asked.

“Well, it does sound a little arrogant.”

“What is organizational structure?” I pressed. “I mean, we draw boxes on a page and connect them with lines. What does it all mean?”

“The lines connect people that work together,” Kayden floated.

“So, what? They work together. What do the lines mean? Look at your chart. Most of the lines are vertical and are connected to a supervisor or connected to you? What do the lines mean?”

“It’s the way we define the working relationships between people,” Kayden finally stammered.

“Now, we are getting somewhere. An org chart defines the working relationships between people. And, we have to forge the kind of relationships that move the company forward, with respect to these two things – Accountability and Authority. In every working relationship, who is accountable for what? And, in every working relationship, who has the authority to make decisions? The right working relationships determine what can be done, what is possible. The not-right working relationships lead us into counter-productive activity and thwart what is possible. That’s why an org chart helps us understand those working relationships.”

Object in Motion

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“You make it seem like I got promoted to manager was just happenchance,” Roberta said.

“In many ways, your appointment was just because you were standing in the right place at the right time, call it luck,” I replied. “But, luck alone will not sustain you as a manager. You now have the authority to make decisions and solve problems the way you would have them solved, but that does not mean you have the team behind you.”

Roberta turned pensive. “You mean, I might tell the team to do something in a certain way, or at a certain time, and the team might push back?”

“Most assuredly,” I smiled. “The bane of every manager is that the team almost always pushes back. It’s not necessarily out of malice. Or that the team thinks you are a dolt. Most pushback occurs because the team has its own way, its own methods, it own habits that are difficult to break.”

“So, just because I am the manager does not mean it’s my turn and I get my way?” Roberta asked, not as a question, but a statement of reality.

I answered anyway, nodding. “I think you get the picture. Your way may be the best way, but you are fighting momentum, object in motion stays in motion. It is your role to interrogate current methods, gather new methods and solicit input, so you can guide the team to the best decision. It is cumbersome in the short run, but the only way in the long run. If you force the short game, your term as a manager is already on the rocks.”

And, at the Bottom?

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“It still looks like a communication problem,” Nolan insisted. “They are in a meeting, they are talking. Yes, there is a checklist. That is what they are communicating about.”

“I will agree, there is communication, but that is not the problem. The problem is that there are no dumpsters on the job site to haul away the debris and your project gets delayed by a day.”

“But, they are talking about a checklist, it’s communication,” he continued to push back.

“Yes, they are talking about the items on the checklist, but I helped design that checklist,” I nodded. “What is at the bottom of the checklist?”

Nolan was trying to imagine the checklist and what checklist item was last on the list.

“Below the items on the list,” I directed.

It suddenly became clear. “You are right,” Nolan admitted. “At the bottom is a signature line for both the estimator and the project manager to sign. It’s not just a checklist, it’s a commitment list.”

“Not a communication problem,” I said. “It’s an accountability and authority issue.”

It’s a Box on a Checklist

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“What’s the name of the movie that said – What we have here is a failure to communicate?” Nolan asked.

“You are way too young to have seen Cool Hand Luke,” I replied. “So, what’s the problem?”

Nolan nodded, “We have a communication problem.”

“I don’t believe in communication problems,” I nodded back. “A breakdown in communication is only a symptom of the problem. So, again, what’s the problem?”

“The first part of every project is a demolition phase, to tear down what was already there. The crew shows up, tears things down, but there are no dumpsters to haul away the debris. The project manager says the estimator left the dumpsters off the bid package. The estimator says the project manager should have known because we have dumpsters on every project. Looks like a communication problem to me.”

“I don’t believe in communication problems and I don’t think you have one. What you have, is an accountability and authority issue. In the working relationship between your project manager and your estimator, they have a handoff meeting at the beginning of the project. That meeting is so predictable that you have a checklist to make sure that everything is covered. I would bet that somewhere on that checklist is the word dumpster.”

“You are right,” Nolan said. “But they didn’t talk about it, AND it wasn’t included in the bid package.”

“Look,” I stared at Nolan, “you have an estimator, a project manager and a checklist in a meeting. In that meeting, what is the accountability of the estimator and what is the accountability of the project manager?  It is up to you to define that.”

Not-So-Intelligent

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“That makes sense,” Luke said. “It was a little outside our normal behavior, giving nurses the authority to question a doctor about hand washing.”

“That’s the problem with normal,” I replied. “Normal is just repeated behavior regardless of the outcome. It’s the desired outcome we have to pay attention to, not what is normal.”

“I agree,” Luke nodded. “Likely, we would never make that decision without looking at mortality rates. It was only when we asked the nurses, that things became clear.”

“When you examine systems, you have to figure out how that system emerged. Was it designed to produce an outcome, or did it arrive out of repeated behaviors, ingrained as habits, without regard for the outcome?” I stopped. “A not-so-intelligent system makes even competent people (surgeons and nurses) look dumb. Eventually, competent people will overcome a not-so-intelligent system, if you give them permission, better yet, ask them.”

Is It the People or the System?

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“You are saying,” Luke started, “that if I see friction in the system, I should look at the system, rather than trying to fix the people?”

I nodded affirmative. “You can have intelligently designed systems, if you create them. But, most systems emerge as a set of outcomes created by random behavior. Worse. Those random behaviors get repeated and become the norm.”

“But, we have standards,” Luke protested. “This is a hospital. We have to inspect and comply with those standards.

“Tell me,” I prodded. “A few years back, you made a change at your hospital. You had a not-so-intelligent system in your operating theatre that created a problem. Mortality rates in your surgical area were statistically above the norm. Even your doctors scratched their heads trying to figure this out. So, you asked your nursing staff what could be the problem. They recommended that you change your system, to make it more intelligent.”

“I remember,” Luke nodded. “We had to change our system of authority. Often, our surgeons were not washing their hands sufficiently prior to surgery. Of course, in the hospital, the surgeon has the authority for most all decisions. We changed our system to give the nursing staff the authority to question a surgeon related to hand-washing. We brought all the nurses and all the surgeons in the same room to discuss and create this new authority for nurses.”

“What happened?” I asked, already knowing the answer.

“Mortality statistically came back in line within seven days,” Luke replied.

I nodded. “You didn’t change the people, you changed the system.”

The Friction Inside

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“Two people, working together, are likely very nice individuals apart from each other,” I continued. “As the manager, when you put those two people together, you place them in a system. Most often, that system is not defined and dysfunction emerges.”

“I always hope they can figure it out, the working together part,” Luke nodded. “And, most of the time, these teams get along, but there are always things that create friction.”

“As the manager, you notice these things,” I said.

“In an instant,” Luke agreed. “But even when I point things out, and get nodding agreement from everyone, the instant I leave, they go back to the friction-way of doing things.”

“It’s often a matter of telling, or rather not-telling,” I replied. “You tell, you talk, and they pretend to listen. Your team has difficulty making sense of the friction, until they discover it for themselves. Any parent, faced with the same dilemma usually tries these two things with the same result. They speak louder and with more frequency – if I told you once, I’ve told you a thousand times.”

Luke nodded. He had two children, he was familiar with the parental response of louder and more often.

“There are two things we have to define,” I smiled. “In this working relationship, who is accountable for what? And, in this working relationship, who has the authority to make what decisions? Then stand back and simply ask questions.”

“Questions?” Luke looked at me sideways.

“Questions. The best managers are not those who tell people what to do. The best managers are those who ask the best questions, to help the team make sense of the friction, to help them discover it for themselves.”