Structures suck!

"Guess our structures suck!?" Wasn't the first time an executive expressed his feelings about the organization structures ;) But why did it take him/her till the end of the year to tell me that? As this is something new?

My standard reply would be: it's your structure, deal with it! As if my babysitter would be responsible for the bad behavior of my kids?!... BTW they behave very well ;) But of course I didn't say that.

But let me be a good babysitter on your structures and tell you this: your structures suck only because you don't feel control over your operations, because you don't know who is doing what, and you started realizing you needed to micro manage your teams. But that you knew already? What is the solution Sir!?

Let your OD specialist help you. To start with: the visualization of your structures, and the analysis of span of control, layers in your organization. And than let him ask you three questions:

1. In how many steps a decision is made? Checker checks maker steps? What are the layers in your organization, how fat is the management layer and do your managers manage anything except the process? Do you have talented managers who you can trust and delegate and provide you sufficient reporting on progress and result?
2. What roles take accountability (note: hope only 1) and what roles are responsible to execute tasks? Who is doing what basically. Are we all too busy executing or are we all relaxing and observing how our monitors turn in sleeping mode? The span of control isn't the span or responsabilities.... remember that ;)

And here starts now an interesting discussion about structures that will lead us to many many more meetings and discussions about what is the role of the business, strategy and HR (or is OD not part of HR anymore?) on your structures that suck! :)

(De-)Centralization

Fred, have a look at our operating model. Should we centralize or decentralize?
Wasn't the first time I got this question. And  the first 2 things an OD consultant would do is:

1. Benchmark against other companies in your industry and region
2. Google for business cases, articles and studies on centralization and decentralization

But I gave up on Google long time ago and don't trust in OD consultants (although I am myself a consultant half the time), because best practice doesn't matter in these type of cases.

So what was my response? And by the way, don't use this as best practice ;)

Look at your organization as follow:
1. There are functions that control, these need to be centralized due to the nature of the roles within these functions. 
2. There are functions that develop and produce. If your industry is simple by nature and your product universal for all markets, keep it centralized. If innovation is core, then decentralize it by region or segment.
3. There are functions that are supporting the processes. I advise a hybrid model where you a) centralize the units that look at effectiveness, or so called continuous improvement of the process and support (your center of excellence). And b) decentralize the support processes to ensure efficient execution and close response time to the front functions like sales and marketing.
4. The functions that sell are by nature close to market (except if you are Amazon) but that wouldn't be fully true because even close to market principles apply for e-commerce.

In addition I always highlight the risks and opportunities of centralization of core control, product and process:
1. Centralization increases complexity of the decision making. Why? Because the dealing with decentralized functions (and most organizations are developing themselves to become decentralized to reduce the show stopper called "control") require dual and triple reporting lines from department to group/holding structures. 
2. Centralization allows high control on process and execution, but also control on cost. But the high effective central control is conflicting with business values that encourages innovation, entrepreneurship and self-deployment of staff and teams (strong statement isn't it?).

And one important note to complete my reply:

Always make sure you map the core values of your organization (implemented or wish list values) to the way you like to structure the organization! They might be conflicting with the way you like the organization to operate.