Business strategy
The way you position your company should also inform your organizational design. Are you operating in a way that makes achieving your goals possible? How could your organizational structure and team structure enhance your company objectives?Â
For example, software development is an industry where flexibility and speed of innovation is paramount for staying ahead of the competition. Cross-functional teams, like Scrum teams, work well in this industry because of the need for rapid iteration that would be stymied if each department worked individually. For companies offering different products or services, each product or service might require very different strategies and thereby result in distinct subdivisions.Â
Location
We live in a global, digital age. Companies across all industries have to consider how theyâll handle employees who work from home, employees in satellite offices or international offices, partners, freelancers, and the many complexities of the 21st-century workplace. These arenât just logistical questions but important organizational considerations.
The resources that you decide to centralize or keep in-house versus the ones that get localized or outsourced will have repercussions. For example, having a single marketing team will mean a very different setup than if each of a companyâs locations has its ownââwill they all work independently or still report to a central manager? How will this affect branding? If thereâs only a central team, how will requests be prioritized and managed? Youâll need to think through all these questions before coming up with an organizational structure that works for your company.
Culture
What do you want your employees to think or feel when they come to work and how can your team structure make that happen? While seemingly intangible, there are a lot of concrete factors that affect a companyâs brandââbenefits, activities, workspace arrangement, parties, and values, to name a fewââwhich means that you can be purposeful in creating the kind of culture that you want for your employees.Â
As weâve already said, a hierarchy will be a stable, predictable environment for people to work in. However, a flat hierarchy with very little upper management allows for more genuine collaboration, employee-driven problem solving, and creativity. Some companies push this to having no hierarchy whatsoever, like Menlo Innovations or AgBiome, to really stimulate and intensify that collaborative, self-driven spirit in all their employees.
Technology
Advances in technology make it easier than ever to track various metrics, collect and analyze information, and communicate with others. These arenât just convenientââthey change how businesses operate. How can your company use technology to become more efficient and streamline your organizational structure?Â
As we previously discussed, thereâs the move to more âvirtualâ workplaces, which lowers costs. Simpler communication and reporting also makes it possible for managers to oversee more workers, possibly shrinking the number of managerial positions. Additionally, performance tracking means that businesses can invest in the right people and positions that will help them grow and expand.
Finding what works is an ongoing process
What factors influence organizational structure vary from company to company. When determining the team structure for your company, itâs okay to look beyond the limitations of the traditional organizational hierarchy. Within the right framework, your employees have the opportunity to realize their own potentialâas well as that of your company.
