Perhaps one of the most important areas of your organization to rethink is your organizational structure. It often sounds radical to some and boring to others, but the reality is that what works well in one stage of business will almost never work well in its next and yet, most organizations leave the same structure in place for years and often pay a dear price due to significant breakdown in communications and coordination.
There are three primary reasons that might prompt you to begin rethinking your organizational structure:
- You have new markets opening up
- You need to react to changes in product or service demand
- You need to update your approach because new technologies are threatening your core business
What I often hear is, “But this is how we’ve always done it!” This thinking is dangerous as it helps perpetuate outdated and inadequate systems. Most businesses need a different organizational structure every time the business grows by 50%. I can tell you from three decades of consulting that what makes a business successful in its first and second stages of growth will typically stunt or even stop it in its third and fourth stages. If an organizational change is not made, this often places great stress on the staff and leads to customer frustration.
Our research of hundreds of organizations has shown that there is often no single unifying leadership and organizational methodology or approach being used throughout a business. As a result, from the perspective of those the business serves, every time it offers a new product or service customers have to relearn an entirely new set of processes. This methodology, or lack thereof, creates a collection of differing approaches and programs that do not unify a business. Rather, it often causes confusion and disharmony.
There are four warning signs that can be used to discern if your business is heading in this direction:
- The business is operating at some proficiency but constantly needs to make personnel shifts.
- The business is not updating its processes to stay current with the needs of the customers it serves.
- The business is in a stalled growth stage. Leadership realizes there are some staff problems that they have lived with for years.
- The business needs a new strategic focus but has been unable to determine one that has the legs and foundation to fuel the needed change.
MarketCues’ research shows that a business’ difficulties are not going to be resolved through external changes and updates. For example, improved friendliness or amenities, although these are positive and helpful improvements, they will not produce the substantial growth difference the business is looking for. Rather, what is often required is an organizational transformation that reflects its current stage of growth.
Often, a business with stalled growth is in the second or third stage of development but using first stage leadership practices. This is often the key to understanding what has hampered growth.
We have discovered that to drive long-term growth, what matters most is one strong unifying vision backed by an equally strong voice to foster reinvention of the organization’s early-on pioneering days. Applying this simple but powerful vision and process throughout the organization greatly improves its chances of achieving its growth goals.