Different Types of Organisational Structures
- Hierarchy organizations
- Flatter organizations
- Flat organizations
- Holacratic organizations
The Traditional Hierarchy
Typically sees one way communication and everyone at the top with all the information and power; This type of a model makes sense for linear work where no brain power is required and where the people who work there are treated like expendable cogs. Communication typically flows from the top to the bottom which means innovation stagnates, engagement suffers, and collaboration is virtually non-existent.
Oftentimes called or referred to as self-managed organizations. flat companies are exactly that…flat. Meaning there are usually no job titles, seniority, managers, or executives. Everyone is seen as equal. Its isn’t practical or scalable for larger organizations when we think about the future of work. Smaller and some medium size companies might be able to operate in this type of an environment but when you get to organizations with thousands of employees then it becomes challenging.
Flat companies are exactly that…flat. Meaning there are usually no job titles, seniority, managers, or executives. Everyone is seen as equal. Flat organizations are also oftentimes called or referred to as self-managed organizations. It is not practical or scalable for larger organizations when we think about the future of work. Smaller and some medium size companies might be able to operate in this type of an environment but when you get to organizations with thousands of employees then it becomes challenging.
in between hierarchies and flat organizations lie flatarchies. These types of companies are a little bit of both structures. They can be more hierarchical and then have ad-hoc teams for flat structures or they can have flat structures and form ad-hoc teams that are more structured in nature. This model is quite powerful yet also more disruptive than the other structures explored. The main benefit here is the focus on innovation which is quite a strong competitive advantage in the future of work.
The basic goal with this structure is to allow for distributed decision making while giving everyone the opportunity to work on what they do best. There is still some form of structure and hierarchy but it’s not based on people as much as it based on circles or what most people would think of as departments. Information is openly accessible and issues are processed within the organization during special and ongoing meetings. (Jacob 2015)
In which ways do the internal processes need to be adjusted when the company is growing?
Internal communications should be designed to help companies become better as they grow. Communication breakdowns can stunt promising starts. If things get too big, confusion can arise, and products will suffer. (Workspace)
Open Meetings: “The best organizations are the ones that not only solicit constructive feedback, but actually do something with it.” Meetings where the entire team gathers together, and everyone is invited to share ideas, air grievances, ask questions, and say outright that they think things should be done differently. (Workspace)
Tech Talks: These should be about something related to a project they are working on, a demo, or simply a relevant topic they find interesting. (Workspace)
Documenting your work processes: Using a simple diagram with a series of connected boxes, or even just a list of bullet points is good enough; the real value comes from thinking through the steps and recognising that you can take on many different roles during a working week. (Rauv 2017)
Collaborative Tools: Collaborative tools and effective internal communication can increase productivity. Organisations find ways to improve resource-heavy processes by using dedicated tools. Collaborative tools such as an intranet is just one all-encompassing way to increase productivity.
In fact, connected employees within an organisation can improve productivity by 20-25% which equates to a potential improvement in revenue of up to $1.3 million a year. These possibilities prompt small, medium and large companies alike to invest in these tools. (Rauv 2017)
These possibilities look very positive, but an improvement in productivity is determined by how efficiently and how often employees use an intranet and other tools. Prescient Digital Media found that 13% of employees reported using their organisation’s intranet daily while 31% of employees reported they never participate. (Rauv 2017)
Work Culture: Making employees feel that they are part of your organisation and giving them an avenue to interact with each other can be an effective and surefire way to boost efficiency and productivity while also reducing operational costs. (Rauv 2017)
What are the common problems related to organisational growth?
Cash flow management: Cash flow problems are the second most common reason why small businesses go bust, according to research from CB Insights. Owners have to spend money to make money during a growth period, but this concept can quickly get out of control and leave you in a precarious position.
Competition: A funny thing happens when your company is successful–others recognize the opportunity and enter the industry. Many small business owners are unprepared for the realities of fierce competition, and they quickly lose their way in an attempt to respond.
Keeping up with market changes: If your company operates in a sector that experiences frequent upheaval, you have to be prepared for constant change. Internalize the idea that disruption is the new normal and work on training your employees to be agile in the face of uncertainty.
Deciding when to abandon a strategy: Sometimes marketing channels that seemed full of potential don’t pan out and new product lines don’t catch on as anticipated. Failures are an important part of business growth and owners must train themselves to recognize where they occur, divert resources accordingly and learn from those mistakes. (Kittaneh 2018)
Communication: Leadership doesn’t effectively communicate information, priorities, expectations or changes within the rest of the organization in a timely manner, or at all. (Pomerantz 2017)
Development: There is a lack of opportunities for professional growth, and employees can’t see a clear career path forward. No succession plan exists for current employees, nor onboarding plans for new hires.
Interpersonal: The culture is missing a system, process or support for resolving conflicts and disagreements between leaders and teams.
Culture: Employee engagement and morale are low. People do not feel empowered to speak truth or to lead the charge to make an improvement in their circumstances.
Trust: Different levels of leadership don’t trust other levels. Different divisions or departments don’t trust other divisions or departments. It’s hard to navigate the politics. You don’t know who to trust.
Accountability: There is a lack of accountability systems and structures across the organization. Various branches and individuals don’t know who is responsible for what, and leaders don’t know what’s happening in lower levels within their areas of responsibility. (Pomerantz 2017)
How to improve communication in a virtually structured organisation?
Manage results, not activity. In the physical office environment, “busy work” often gets mistaken for real work. In the virtual environment, when you can’t see what people are doing, the key is to manage results. Set expectations and monitor the results, not the daily activities. This is empowering for people who are motivated and who take the initiative, and on the other hand it is a virtual microscope, which reveals people who don’t know how to get things done. (LaBrosse 2010)#
Schedule regular communication. It’s important that there is a regular time for reporting both progress and potential pitfalls to the team. This keeps people on track and gives everyone the discipline of a team check-in. It’s amazing how much can be accomplished in a 30-minute conference call when you set expectations beforehand and tell everyone what you need to accomplish in that time frame.
Create communication that saves time — not the kind that kills it. Have you created an e-mail culture that wastes time with endless “daisy-chain” conversations that take several hours to read? Does your team spend hours trying to solve an issue with an e-mail conversation that could have been solved with a 30-minute conference call? (LaBrosse 2010)
Ensure accountability: “Ironic as it may seem, virtual teamwork starts with a high emphasis on individual responsibility, rather than on group thinking,” McDonald argues. “Team members are very clear about what their individual jobs are, and, frankly, want to be left alone to do them. Achievement is uppermost in their minds. They take their jobs seriously and expect each team member to do the same.” (McKeegan 2016)
Build trust: the basic issue is the establishment of a solid trusting relationship. Without that, virtual work is impossible. They identify three kinds of trust that employers must address to be successful: contractual, communication, and competence trust. Contractual trust is, fundamentally, doing what you say you will do. Communication trust is, at its heart, a question of honesty and disclosure. You have to be willing to share difficult truths with your employees, admit your mistakes, give honest feedback, and at the same time maintain confidentiality. (McKeegan 2016)
Morgan Jacob. 2015. The 5 Types of Organizational Structures. https://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-of-organizational-structures-part-1-the-hierarchy/#273e044b5252 / Accessed on 11.11.2018
Milinovich John. How Fast-Growing Startups Can Fix Internal Communication Before It Breaks. https://firstround.com/review/How-Fast-Growing-Startups-Can-Fix-Internal-Communication-Before-It-Breaks/ Accessed on 11.11.2018
Workspace. Improving your internal processes.https://www.workspace.co.uk/community/homework/growth-and-strategy/improving-your-internal-processes/ Accessed on 11.11.2018
Rauv Siv. 2017. Want to Improve Workplace Productivity? Start Managing Internal Processes Better. https://www.elcomcms.com/resources/blog/improve-workplace-productivity-by-managing-internal-processes / Accessed on 11.11.2018
Kittaneh Firas. 2018. 6 Growth Challenges Your Business Will Face. https://www.inc.com/firas-kittaneh/6-growth-challenges-your-business-will-face-and-how-to-overcome-them.html/ Accessed on 11.11.2018
Pomerantz Suzi. 2017. How Many Of The Top 10 Most Common Organizational Challenges Plague Your Company. https://www.forbes.com/sites/forbescoachescouncil/2017/02/24/how-many-of-the-top-10-most-common-organizational-challenges-plague-your-company/#6023155d1e79/ Accessed on 11.11.2018
LaBrosse Michelle. 2010. 6 rules for better communication in virtual teams. https://www.computerworld.com/article/2519498/it-management/6-rules-for-better-communication-in-virtual-teams.html/ Accessed on 11.11.2018
McKeegan David and Carrie. 2016. Top 5 Tips for Strategic Planning in a Virtual Company. https://www.entrepreneur.com/article/270172/ Accessed on 11.11.2018
Figure 1, Morgan Jacob. 2015. The 5 Types of Organizational Structures: Hierarchical. https://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-of-organizational-structures-part-1-the-hierarchy/#273e044b5252 / Accessed on 11.11.2018
Figure 2, Morgan Jacob. 2015. The 5 Types of Organizational Structures: Flatter Organizations. https://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-of-organizational-structures-part-1-the-hierarchy/#273e044b5252 / Accessed on 11.11.2018
Figure 3, Morgan Jacob. 2015. The 5 Types of Organizational Structures: Flat Organizations. https://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-of-organizational-structures-part-1-the-hierarchy/#273e044b5252 / Accessed on 11.11.2018
Figure 4, Morgan Jacob. 2015. The 5 Types of Organizational Structures: Flatarchies.https://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-of-organizational-structures-part-1-the-hierarchy/#273e044b5252 / Accessed on 11.11.2018
Figure 5, Morgan Jacob. 2015. The 5 Types of Organizational Structures: Holacratic Organizations. https://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-of-organizational-structures-part-1-the-hierarchy/#273e044b5252 / Accessed on 11.11.2018
Figure 6. Vadun Chuck.2018. How do the top 10 biggest virtual companies in the world make it work?https://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-of-organizational-structures-part-1-the-hierarchy/#273e044b5252 / Accessed on 11.11.2018