When you’ve been in your business for a long time, you get the feeling that it’s actually an easy thing, if not common knowledge. But as soon as you start telling someone about your job, it turns out that this information is not so obvious because they ask for more and more details.
For the benefit of the community, I am going to share with you 4 life hacks for the organizational structure of the company. They help me a great deal, and your business will probably benefit from them, too.
So, let’s talk about organizational structure. A lot of books are written about it. All business schools teach their students about it. I’m not trying to replace them, nor am I going to explain why structure is important. It’s just that I have 4 simple solutions that work for almost every company and are quite universal (at least in the industry of tech and digital companies between 30 and 3,000 employees).
Just a couple of general disclaimers:
- Culture eats strategy for breakfast. So if your corporate culture is weak and toxic, you will solve this problem neither by modifying the organizational structure nor by completely reassembling it.
- Any changes are made by people. Even if you have a cool idea on how to improve the organizational structure, but there’s a wrong person at the helm, it is still going to be a disaster. Remember: each employee must be consistent with his or her function.
Regular and timely updating of the company’s organizational structure
My advice is to update the organizational structure along with achieving your goals.
Organizational structure is a map of responsibility within the company, a scheme that represents who is responsible for what.
It all starts with the main objective/goal of your company. It may change every year, or less or more often. But as soon as the objective has changed, the next step is to update the organizational structure of the company.
It is a sad spectacle when a company has changed its objective or strategy of achieving it, but its organizational structure has remained untouched. More often than not, this just creates more problems and slows the progress down.
Change the goal → change the strategy of achieving it → update the organizational structure. Rinse and repeat. On a yearly basis, if necessary. It may sound scary, but it’s going to be much easier to integrate any changes if you immediately set these rules and say, “This is how we are going to move on and meet the new challenges.”
The organizational structure should always reflect the company you want to become, not what it is right now.
People care matters
I hate classic HR departments. Usually they are some shady entities with weak digitization and performance benchmarks. Think about it: when was the last time you heard, “Our HR people are so cool! They truly help the company”?
However, this is rarely the HR’s fault. Rather, they are put in a situation where they have very limited power and can’t do anything impactful for employees.
- First of all, if you can do without HR, then keep at it for as long as possible. The saddest thing is when a CEO hires HR for their early-stage business thinking, “From now on, they will solve all the problems for me. Cool people will flock to my company. A healthy corporate culture will emerge.” Spoiler: no, it won’t. So don’t get your hopes up.
- Secondly, if the HR department is necessary after all (say, in larger companies), then you should expand its functions and capabilities. The best way to do it is to transform the Human Resources department into People Care. Equip it with all the tools that can make a difference in the happiness of your employees. In addition to the standard HR functions of administration and recruitment, People Care should oversee office managers; take on workplace organization, events, tech support, education, and training; organize remote work; and stay in charge of office procurement.
Try to gather in one place and under adequate management everything that can help you take better care of employees. The main task of a People Care manager is to make sure that the rest of the team keeps great life-work balance. Nothing should distract them from their personal lives, but also nothing should interfere with their work.
As for the corporate culture, it is first and foremost the responsibility of the chief executives of the company
Every department should have both Project and Process Management
Have you heard about the Run & Change approach in business? It’s the idea that people and processes can be fundamentally divided into two categories: Running and Changing. Managers shouldn’t mix these categories up or set inappropriate tasks.
Let me channel some old-school management tenets 🙂 There are two main types of management:
- Process management
- Project management
The task of project management is to do something once. For example, to change the existing order of things. Tasks are often custom or non-standard. Whereas process management is supposed to set up such a pipeline where day after day, same operations are done better, faster, and smarter.
I advise you to hire a Project Manager and a Process Manager in each department. In the early business stages, you can combine both tasks in one person, but you have to understand whether these tasks are one-time or regular — then different approaches and/or processes should be applied.
Ideally, if a department is already quite large, there will always be
- employees who are only engaged in business processes without being distracted by non-standard requests,
- and employees who only take on experimental tasks and atypical cases.
In our experience, when we apply this approach, it leads to a great increase in the total efficiency, NPS, and the number of solved tasks. Autonomy levels also rise: a department starts to improve and develop by itself instead of waiting for a ‘magic kick’ from above (which might be due to incompetence or overload interfering with the employees’ ability to dive out of business processes).
Divide the company’s Backoffice into Hard and Soft offices
There’s a popular and convenient scheme to divide a company into ‘business’ and ‘services for business’. The former team uses metrics, plans, and KPIs in their work, the latter — SLA, or an agreed-upon level of service that prevents quality drops.
Sometimes these teams are called front and back offices. Other times it’s something else. The essence is common — the former are all about marketing, sales, and product management; the latter are all about the necessary services that keep the business afloat (tech support, lawyers, administration, document management, accounting, etc.).
Depending on specifics of a business, there can be a million variations. But I’ll try to convey the general idea and approach.
- There are activities where you simply can’t go wrong. Usually it’s all that has to do with the state: taxes, finances, employee formalization, paperwork, lawyers. In these functions, the key is to reduce risks and, ideally, avoid them.
- Conversely, there are many processes where mistakes are… not useful, really, but certainly not critical. You are supposed to show high tolerance for failures because in these areas, people learn new skills and grow through trying something new and making mistakes.
It works very well when these two contrasting approaches and functions are divided into different corners. We call it a Hard and Soft office. So all the functions where risks are taken seriously are moved to the part of the organizational structure called the Hard office. Whereas areas that require creativity and experimentation are moved to the Soft office.
We also hire appropriate managers.
- In the first case, it is someone close to financiers or lawyers.
- In the second case, it’s someone like entrepreneurs and art directors.
It pains me when a department that needs to experiment and try things out ends up under a strict administrator. And vice versa: it’s equally bad when finances are run by a ‘creative elf’ who is not of this world. Because of that, the team can neither audit properly nor make decisions based on the numbers in the dashboards since they inspire no trust.
That’s why you should divide your back office. This way, you will be more comfortable in choosing frameworks and approaches depending on what you need: more movement/energy, or more risk minimization.
I hope some of the hacks apply to your business and come in handy. Feel free to share in the comments any tips or approaches that you think are more or less universal.
About the Author
Max Volokhov, is the head of innovations at Admitad company. Here, you can read a brief history of our journey and experience gained from our startup studio, investment fund, and other tools.