Structure: Put Your Strategy and Business First

When a new CEO assumes her or his role the first thing they consider changing is their corporate structure.  I would rather have them focus first on communication, decision rights and recognition systems as these have been shown to have a greater impact on getting things done than structure. I think the reason why executives go after structure is because it is easier to move the chairs than change minds. Shifting organizational “habits”, the way people share information and make decisions, require deeper work.  Changing the recognition system is probably the quickest and most effective way to change behavior so this can be the best place to start depending upon your business situation.
 
If you decide you need to change your structure, put your strategy and business first. The best structure will be clearer if you know where you are headed and what you need to achieve. I know this sounds simple. It’s not. I still see executives building their structure around people they like and trust vs. what they need to achieve. If the “like and trust” is based upon the leader’s ability to deliver the business and inspire and motivate people aligned with the organizational values, then I am all for it. But this is not always the case. Sometimes “like and trust” means that they are comfortable, working with them is easy and they don’t challenge or push back. I wish it weren’t so but this is what I observe.
 
The best way to avoid this is to have a small, smart internal team of knowledgeable leaders design the structure. The team should be comprised of leaders who have a reputation for being objective and putting what is best for the business ahead of their own needs. The CEO or executive sponsor must provide the vision and expected outcomes, e.g., improved collaboration across boundaries, leaner operations, or more efficient information flow. A professional and confidential facilitator will benefit the process. If you don’t have the internal leadership talent, the business is in trouble, or needs to transform, then you most likely need to hire an external consultant to help you design your structure.
 
It’s true that the right leaders in the right places can make organizational transformation easier. But there is a reason why most transformation efforts fail: we don’t bring the people along. Structure alone won’t change hearts, minds and behaviors. For that you will have to work on the operational and people practices. Though it can be difficult, frustrating, and exciting, working with the “people part” from the start will help you get further faster and with higher engagement.