The ultimate objective of organization design is to create an integrated, unified system that consistently produces results greater than the sum of its parts. However, by definition, the act of organizing is actually divisive – at least initially. While greater focus, cohesion, accessibility, and functionality of resources result from deliberately grouping and locating work and resources, newly formed boundaries between divisions must also be carefully designed because so much of an organization’s potential to create value happens at the interface of the divisional seams. For example, the potential for world-class customer service is found at the intersection of sales, customer service, and supply chain. Product innovation sits at the intersection of R&D, marketing, sales, and business intelligence. Where these seams come together, work must be tightly linked and managed to ensure the value-creating potential is not diminished or destroyed by the boundaries.
Like fault-lines within the earth’s crust, the seams between organizational groupings hold tremendous pressure and latent energy. And, too often within our clients’ organizations, we discover that the seams have become active fault lines with high levels of tension due to dueling divisional purposes, competing priorities, misalignment of methods and measures, and inconsistent and incomplete communications. We see high levels of insularity and the unwillingness or inability to see others’ perspectives, accommodate differences of approach, or act for the common good. Coordinated execution is hampered and chronic patterns of conflict persist, resulting in diminished capacity and poor performance.
So how do you stitch the seams and avoid a San Andreas quake in your organization? Design your linking mechanisms with the same rigor you design the rest of your organization. Linking mechanisms bridge the boundaries between groups that must coordinate their work in order to deliver the value proposition of the business model.
Each divisional grouping within the organization must have clearly established ways to reinforce alignment of shared purpose and priorities with key partners, enable coordination of work, facilitate the flow of reliable information, and dynamically address emerging conflicts. This is best accomplished by defining and implementing mechanisms fit for the need. Linkages assume a variety of forms that vary in their capacity to process information and manage complexity. They also vary markedly in how much they cost both in hard dollar terms and investment of organizational effort to implement and manage. You must carefully match the mechanism to the need, ensuring that you do not over or under invest to achieve the intended outcome.
The least costly mechanisms rely on cultural norms to transfer information and coordinate across divisions using the naturally occurring networks of relationships that exist among employees. This is a powerful force when guided by a well-established set of values. As you move toward the need for increased capacity to manage complexity and information flow, other mechanisms are better suited, such as:
Scorecards and setting common goals are straightforward ways to create common focus for disparate groups, and are especially effective when tied to the performance management process.
Coordinating Roles are generally taken by well-respected and experienced employees in addition to their normal duties. Their relationships and ability to maneuver effectively within the organizational dynamics make them adept ambassadors, translators, and facilitators of results.
Process Management Teams introduce general management functions into the linking process, assigning responsibility to coordinate work that potentially crosses multiple boundaries to a leader who may not hierarchically supervise all team members. They are responsible for ensuring the process is established, standards are followed, and when necessary, those involved in the process stand by the decisions that are made even when they may be counter to their function’s direction.
Matrix Structures involve linking through hierarchy. It is the most expensive and, for many, the most challenging to manage of all the linking mechanisms. However, the complexity of modern, global organizations have made matrix structures more prevalent in today’s business environment and many employees are becoming more comfortable and adept at navigating the demands of dual reporting relationships.
Exceptional leaders recognize both the productive and destructive potential of organizational boundaries. They have become students of the organization and understand the value that is created and destroyed at the divisional margins. They focus their best efforts on managing the whole – diligently working to create a seamless, cohesive and high- functioning organization. So, whether you are long-tenured or just assuming a new leadership role, you are well advised to carefully assess and regularly monitor conditions at the seams. In those places where you sense rumblings and fissures forming you should immediately address them by following a scripted, deliberate process, working in collaboration with all other impacted parties to ensure that you create an integrated, unified system that consistently produces the results you intend.