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
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 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.
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.
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.