Harold Geneen the former CEO/President of ITT Corporation (International Telephone & Telegrah Corp.), once said, “Every company has two organizational structures: The formal one is written on the charts; the other is the everyday relationship of the men and women in the organization.”
Whether we think it does or not; structure or the lack thereof in business causes great impacts on the effectiveness of our organizations. I don’t believe as leaders we naturally think of structure and how we fix our structures when trying to solve business problems. I think we often treat (fix) the symptoms of a lack of structure.
I learned years ago when I was Scout Master for a Boy Scout Troop that structure is essential to performance. In boy scouts, performance is measured by kids advancing to the next rank or getting the next merit badge, or the ability to listen and follow directions and not get mauled by a mountain lion. When there is chaos, the mind seems to be drawn to that chaos and chaos begets chaos. Newton’s law of motion says “An object that is at rest will stay at rest unless an unbalanced force acts upon it“. Have you ever had a messy room in your house, and noticed it got messier and messier until a force was acted on it? The mess begets the mess. You think, “screw it it is already messy” and you end up contributing to the mess. The same thing happens in business. I think when things are orderly, organized, planned, (i.e. structured) and the lines are drawn in the sand; that people actually feel happier, more at peace, and more capable of performing.
The idea in and of itself sounds counter-intuitive; imposing restrictions and setting boundaries, would seem to limit one’s ability to perform and achieve. But the opposite is actually true. I have to thank my wife for teaching this to me many years ago. She was a first grade teacher and taught me that children are happier and more productive when they have structure. Over the years I have observed children and noticed this effect and we have striven to provide structure to our child. He lets us know when we are slipping. 🙂 I have noticed the positive and negative effects of structure and the lack of, in other children and businesses as well.
Structure can mean a lot of things in different situations in life and there are often outliers that might be the occasional exception. I accept that. I want to suggest a couple structures that I think are important to consider in leading a business. These could also apply to one’s personal life.
5 Areas of Structured Leadership
1) Organizational Structure
2) Execution Structure
3) Environmental Structure
4) Relationship Structure
5) Internal (Personal) Structure
Organizational Structure
The organizational structure can be looked at a couple of different ways. One way is the legal structure of a business; i.e. S-Corp, C-Corp, LLC, etc… But as far as performance and leadership are concerned, people like to know how they fit into the organization of a company and how they can progress, well at least high performing individuals that want a career not a job. Having something as simple as a organization chart is a start. But it goes deeper; here are some questions to ask yourself:
- Do you have a career path set-up for employees and do they understand it?
- Do employees know how they can move up the ladder?
- Do employees have a clear idea of who they report to?
- Is there a purpose for the organization and does everyone know that purpose?
The organizational structure has to also provide some “hard edges” or limits of what one can and can’t do. Hiring someone and then saying, “Go at it” is a setup for failure. Some questions to ask yourself:
- Is there an on-boarding plan for each employee?
- Do employees know the hard edges of their job?
- Do you have an updated employee manual?
- Does everyone understand the employee manual?
- Does everyone know what is expected of them?
This is just touching the surface, but organizational structure, I think, is often something that leaders love or hate to deal with. But it really is one of the foundation stones to a successful business.
Execution Structure
Execution structure is the “HOW”. It is the processes and procedures for getting from A to B. I think this is one of the most important structures in business. In Boy Scouts, when earning a merit badge, it is very clear on exactly what has to be done. Following are the first few requirements for earning the “American Business” merit badge:
Do the Following:
a. Explain four features of the free enterprise system in the United States. Tell its benefits and responsibilities. Describe the difference between freedom and license. Tell how the Scout Oath and Law apply to business and free enterprise.
b. Describe the Industrial Revolution: Tell about the major developments that marked the start of the modern industrial era in the United States. Tell about five people who had a great influence on business or industry in the United States. Tell what each did.
Do the Following:
a. Visit a bank. Talk with one of the officers or staff. Chart the organization of the bank. Show its relationship with other banks, business and industry.
b. Explain how changes in interest rates, taxes, and government spending affect the flow of money into or out of business and industry.
c. Explain how a proprietorship or partnership gets its capital. Discuss and explain four ways a corporation gets its capital.
d. Explain the place of profit in business.
e. Name five kinds of insurance useful to business. Describe their purposes
Imagine how successful staff would be with that kind of structure. Of course they need to be empowered to make changes and adapt if the need arises, but I think execution strategy is taken for granted, especially in small business, probably because it is one of the more difficult things for people to conceptualize and document. Documenting the most important processes in a company gives people order. It makes hiring easier and firing easier. It makes for a more efficient organization.
Environmental Structure
Walk into company or in a CEO’s office and you will quickly be able to tell how much environmental structure is in place, but you can also generally tell the status of the other structure’s. Messy offices, files that are not filed, boxes in the halls, desks that are unorganized, all display the culture and environmental structure of a company. I may get called out on this, but I do not believe anyone works better in chaos. I know many people that if you took them from their normally messy office and put them in a clean and organized office would have difficulty because of the change, but not for the lack of chaos. Meaning they used to know where things are and now they do not.
The environmental structure sounds superficial but is really important. If you are culture like Google, who values innovation and creative thinking at work, then your environmental structure should be setup that way, and theirs is. If you are a law firm dealing with clients who expect order and professionalism; then that is how the environmental structures should be setup. The way you and your people dress and groom, how the phone is answered, what time people come into work, are all important aspect of environmental structure. Virtual organizations can still have environmental structure as well. Walk around your office and look around and ask yourself; if I knew nothing about my company, what would I think of it by what I see now? The truth can be scary.
Relationship Structure
I’d like to think of relationship structure as the interpersonal behavior that exists in an organization. There is a plethora of research out there about why people quit and why people hate their jobs. Many studies often lead to how one was treated and communicated to. While I think most would like to erase emotion to some degree and have more rigidity, it is important to have a relationship structure that fosters, positive interpersonal communication and behavior. Some questions to consider:
- Do people yell at your company, do you?
- How does the staff interact with each other?
- Is feedback asked for and accepted by both the leader and the direct report?
- Is there healthy conflict in meetings and is that conflict fostered and encouraged?
- Is there unhealthy conflict that leads to hurt feelings and stress?
Someone once said, “Leave the drama for your mama”, great advice for working relationships. This does not mean you should not have conflict; you just need to have the right kind of conflict. Probably not the most enjoyable “structure” for a leader to deal with, but necessary nonetheless.
Internal (Personal) Structure
The internal structure of employees is not something that you can really control, but you sure the heck can control who you hire. You want people working for you that live your values, that live your culture, and that actually have some form of internal structure that mirrors the culture of your organization. If your company values a well-groomed and professional appearance, you will want to hire people that naturally feel comfortable in that kind of attire; otherwise you will be fighting it forever. If you value ongoing learning and skill advancement, then you want people that like to read and want to progress and are humble enough to admit they have more to learn and actually want to learn. There are many examples of how internal structure can affect your company culture and the ability to execute. As Jim Collins said in Good to Great, you have to “get the right people on the bus.”
I think that creating and fostering the improvement of all five of these structures in business is one huge slice of the leadership pie and invaluable to a successful business if you do not want it to resemble the weak, breaking building in the picture above.
Please leave a comment and let me know your thoughts and if there are any “structures” you think I might be missing.
About Todd Nielsen
A great and well-structured article about structure in a business that is thought provoking and enjoyable – Thank you
Structured Article – very good one
Managing unstructured things also to be done in Structured way – sometimes it will be appear to be unstructured for others, but Leader know the path he is following which structure in his mind.
Rama Tadepalli, India
Hi, Todd. The Transformation of Thougt Leader is Structuration of Mind / This is New Decisions with New Vision of development /. Kind Regards, Sergey .
Wonderful post. cheers
Thanks todd again for the informative and useful leadership development tips that is equally useful in our personal life. I also feel that structures guide in general though we need to acknowledge the importance of flexibility or freedom within structures or autocracy.
Thanks for sharing Leadership & its relation to structures. In many cases we also leave or deal accrding to the local context. For this, contingency management also talked about though the basic principles of leadership can be applcable for all most all situation. There can be exception & I feel that structures might create barriers in building trust, commitment, ownersip with accountability & love. I have little idea about the subject matter though I feel that tram work should not be compromised whatever structure we follow.
Dear Todd, it’s excellent, your summary, you can even use it as a cheklist: OK, have I everything in place? Let’s check it. (Of course, it’s never bad to have a little bit more from monographies about the subject but in case it might be a safety valve…).
I normally like to see the confronting poles which are around the subject itself to be handled. Here I find two pairs of such “poles”: creativity & order and dynamism & statism (“we are ready, we are ‘there’, we are now organized”). Also, its basic to me to include the time dimension: structures in time, in relation to the status of the organisation in its life-cycle.
I often have had the strong impression that very few are really good at both poles. I often say: balance should be found (virtually in everything what we are doing) and I add now: structure should always be there when this balance is “measured”….
Thanks!
I strongly agree with many of the topics that you covered and enjoyed reading it. The one thing that I have found is how strongly Organizational Structure can relate to Internal Structure. We are all victims of our environment. If a person feels there is no avenues to grow and advance within an organization, it can directly affects the Internal Structure of an individual. Dress for Success or Dress for the same “Job” day in and day out? Guess which wins more often than not in that environment?
As leaders we have to strive to make the workplace structured yet at the end of the day an enjoyable place to be. A place where people want to work with and for you.
Todd,
It’s funny that your blog post is about structure because over the last few months I’ve been amazed at how much stronger my company has become in relation to the structure I’ve created within it.
I’ve been in business for almost 4 years. The first 2 years I was basically wing-ing it. It wasn’t until I invested money in a business consultant, a branding program, a strategic business plan, and a marketing consultant in order to create more structure that things started working more smoothly.
Your blog post contains a wealth of valuable information and great questions that every business should review to help them become more successful in the marketplace.
~ Kris Cavanaugh (www.BeginToShift.com)
Todd, You make many good points. As I read I was thinking about how related structure is to procedures in the work place in particular. In the majority of consulting projects I have worked on there has been a common theme of companies that out grew their structures. Ofen times when companies are small they can get away with out solid procedures to get things done. However, once growth comes and particularly if it is rapid the organization becomes dysfunctional as regular tasks are not in a consistent manner across the orginization. Manager A handles a situation in one manner, Manager B handles the same situation in a different manner and Managers C & D in yet another way. The result is inefficiency and chaos. The answer often is a consistent procedure for everyone to follow that can be repeated to achieve the desired result. In order to have solid and successful organization there needs a consistent structure. My experience is that many companies can get away with an inconsistent structure lacking solid processes while small but growth comes the minor irritants suddenly become major problems that can derail the organization.
Well said Tom. The previous comment, got me thinking about start-ups. The new units or start-up’s have a drive and motivation that gets them through a lack of formal structure. I still believe that they have some level of structure, even if is is just in their heads, but as the hurldles come, the model of their structure gets tested and has to be refined. Structure does not have to be a guide to how an organizations leads, but as you said without some structure Manager A and Manager B will handle the tactical hurdlles differently and may not be what is best for the company. I have seen the choas you mention, as you have. Not a pretty sight to see.
Thank you for the comment and Keep in touch.
One of my specialties is process and workflow design, so I appreciate every thing you’ve suggested here. I just know that it’s not enough.
Mature corporate environments, those tied to well defined missions, tend to have rigid hygiene and behavior requirements. These organizations will embrace structure willingly. While they are great at projecting an image of stability (regardless of reality) they don’t tend to have self motivated employees or be very creative places.
On the other hand, start ups are loud, messy and vexing. The people who start businesses don’t do well with structure, especially in the beginning. There may be conflict, people may raise their voices, but it is part of the struggle of creation. Eventually structure will have to come and it’s usually about the time the founders leave. Creation is a messy process and it isn’t for everyone. But neither is structure for structure’s sake. Anyone who has been to an artist’s studio will know what I mean.
I think the leader’s job is to understand the potentials and limitations of his team and create just enough structure to enable them to succeed. That’s different for every single company.
I’m always nervous when leadership tactics are broken down into lists of rules. It oversimplifies just how difficult it is to identify a mission, set a direction and motivate people. Structure is important, but it’s probably the least important element a leader has to tackle. Certainly, it is not as important as setting a vision that people will choose to follow.
That damn free will. What’s a leader to do?
Hi Peter,
I appreciate your feedback. Blogs are not meant to be end-all guides to fix our lives or businesses. I understand the process of structure in business is deep and con cover many competencies. I also did mention that there are some exceptions. I have also been involved in start-ups and even though they may be “messy and vexing”; the best ones, the ones that overcome the hurdles and move forward, will get some structure in place. Structure does not have to be taken so literally also. Some leaders are naturally good communicators and good motivators, so a business can survive without a formal structure in that area, some leaders have a good legal background, so the business can survive without that formal structure for some time. Some leaders are great at hiring and surrounding themselves with great people, that also helps remove some structures at the onset. Structure does not mean documentation. You need to back-up a little, every start-up has some structure, what is important is to refine that structure to fit where you want to take that organization.
I disagree with you that it is the least important thing a leader has to deal with. A mission and vision all have to do with structure; they state what the company’s purpose is and where it is going.
I did not provide any lists of rules. I mentioned, “I want to suggest a couple structures that I think are important to consider in leading a business”. Then I followed that up with questions that I think a leader should ask themselves to help them determine if they have some of that structure in place as well as my commentary on those 5 areas. In the end a leader has to decide what is important to them.
I think I will need to expand more on this topic in the future. Thanks a lot for your feedback.
“Leave the drama to your mama”, I love that. It sums up many situations that occur at work and serves as a personal check point. Next time, I find myself contributing to the drama, I will defer to mama. Thanks Todd.
It is definetly a challange sometimes to not get pulled into the drama. It is also challanging to seperate conflict from drama. Thanks for the comment.
Thanks Todd, A great read. As a small business owner I find it’s a constant struggle to step back and work on the business and not in the business. This is a good motivator for me to get that in balance.
That is definetly true. You are not alone. 🙂 Glad you liked.
Thanks Todd. That is just “good stuff.” I am constantly strategizing around how to “set expectations” so that my staff and my partners will be successful. Healthy conflict is difficult to achieve. Most individuals get stuck in the emotion of the issue. Unfortunately I think our performance is often tied to our identity. Hence, emotions run high when conflict or constructive criticism arises. So, fostering a healthy trust and solid structure is key to happy individuals.
Just thinking out loud.
Well stated Ginger. We are bred thinking that conflict is bad and while it often is in social situations; conflict has its place in business and without it, true success cannot be achieved. Thanks for inspiring me. Guess what the next post will be….
Thanks Todd, great insights and perfect timing. Today is my day of the week to work on business structure, policies, procedures, etc. This is just what I needed to get my day off to a great start.
Beverly
Glad to help Beverly. It sounds like you already have some good structure:-) Keep it up.