When the trust account is high, communication is easy, instant, and effective.
– Stephen R. Covey
Changing an organization’s structure seems to be the common knee-jerk response to internal issues. My prior company embarked on a reorganization to eliminate arbitrary site- and function-based structures so that we could align around corporate-wide value creation processes.
During the restructuring process, an organization typically inserts a new management layer, such as a Chief Operating Officer (COO). Think about this from a "respect for people" perspective. The now-lower heads of each functional group no longer receive the mentoring of the CEO. They have been diminished in stature, and their voices and concerns have to go through another layer to be heard by top management. This is not likely to solve any of the internal problems facing a company.
If you look at the root causes to internal problems, you’ll often find that certain groups and their leaders aren't communicating effectively. They aren't aligned, and changing the organizational structure will not change that one iota. In fact, it will just shift the problem around and probably create new troubles.
Years ago, I was having similar issues in my company. Leaders weren't leading, they weren't talking, and they weren't aligned. Different levels of commitment and different interpersonal communication styles were causing misunderstandings, leading to quality and customer issues. So we took the entire extended executive leadership team through Patrick Lencioni's The Five Dysfunctions of a Team and accompanying workbooks. Over the course of a year, we addressed our absence of trust, misalignment, communication, and the like.
Sometimes the training was very difficult, like the exercise where each member of the leadership team stood up and listened while the others openly and candidly discussed their "areas for improvement." We nearly lost a couple team members that day. But in the end, our leadership team learned how to openly and honestly communicate, which helped us align ourselves with one another. (Later, we found we needed to work hard to sustain this improvement; otherwise, we’d lapse into traditional silo politics.)
The second thing we did to improve the leadership team happened by accident. We had to demolish one of our new buildings to make room for a new facility, and during the two-year construction period, I moved my leadership team into a triplewide trailer. We planted a couple of pink flamingos out front and nicknamed it the “Flamingo Hilton.” The new office was uncomfortable and the walls were paper-thin. We had to learn to live close together and deal with the conversations we heard on the other sides of the walls. The proximity, though not always fun, improved our communication. The daily executive leadership team standup meeting, where we video conferenced with the leadership of our other sites, also helped.
The lessons we learned in the trailer changed how we planned our company’s future. As we were designing our new facility, we had a lot of debate about where the senior leadership team members should reside. Initially, I favored an approach that is common in Lean environments, where each leadership team member is with his or her team, often on the production floor itself. However, we decided to go against Lean convention and locate the senior leadership team together on the second floor of the building. One big reason for this was that we noticed when a senior leadership team member spent too much time with his team, the supervisory and decision-making capability of junior leaders suffered. As much as we tried to encourage younger leaders to take initiative, it was just too easy to revert to the senior manager making the decisions. One set of stairs removed the temptation for upper management to get involved when it shouldn’t, thereby creating respect for our people by enabling their independence, autonomy, and growth. Additionally, we found it was easier to focus the senior leadership team on future strategy instead of the day-to-day mayhem.
Physically separating the executive and junior management workspaces did not prevent senior team members from spending a lot of time mentoring, teaching, and helping their teams. But the small change in our physical location, which changed our focus and perspective, was important. Our junior leaders learned to step up and make decisions, eventually adding a lot of leadership strength to our company.
As we learned, simply changing the structure of an organization does not create excellence and effectiveness. You have to dig deep to improve the underlying leadership competence and communication. As you do that, the organizational structure becomes less and less relevant.
When you find your company is not producing the results you want, it may be time for some big changes, but not the ones you think. Instead of reorganizing your corporate structure, first look to solve conflict issues by improving leadership capability and communication—not by adding a new layer of management. Respect your managers by providing training, mentoring, and feedback to improve their leadership skills. Respect your managers by allowing them to interact across a wide span, and be mentored by senior leaders. Respect others in the organization by reducing layers and barriers to communication, and you will be much more likely to produce the changes you are looking for.