The good news is that restructuring is not usually essential to attain the benefits of a flatter hierarchy.
Let me begin by imploring you to read on after reading my next sentence regardless of its initial impact on you. OK. Here goes.
The corporate structure that you have now is absolutely ideal for achieving whatever your immediate and long-term business objectives are. Even if you operate under the most rigid of traditional vertical hierarchical structures (TVHS), there is only one thing that needs to be done for optimum performance to be facilitated. You've heard and read what that is a thousand times before... you need to flatten that hierarchy.
Still with me? If so, you are probably relating flattening of hierarchy with very expensive reorganisational structuring. The good news is that restructuring simply is not usually essential to attaining the benefits of a flatter hierarchy. However, a marked shift in attitude at all levels of the hierarchy might very well be. But more on that later.
The construction industry offers and empowering message for business at large about flattening corporate hierarchy, yet most construction practitioners maintain vertical structures. The most successful construction corporations have the following in common:
They embrace matrix management, appointing their subcontractors and people from various divisions of their own organisations to project teams on a dynamic, as required basis. Heads of one project team might find themselves occasional advisers on another project, and the junior assistant on a team might find himself or herself managing more senior people (in the hierarchical structure) on another project team. Management at all levels expects that subordinates will always deliver results and never excuses, no matter what.
In successful construction companies every member of the organisation holds two positions within the organisational structure. The first is the hierarchical, in which the person gives and receives instructions, support, and so on and performs in very much the manner normal to TVHS. The second position is on a project team. It is in this position that the person commits to the delivery of results and never excuses in relation to all work he or she is delegated.
It is this second position that many non-construction corporations find difficult to embrace.
When the experienced construction industry operative is delegated a project, he or she immediately takes on the role of the corporate franchisee, the person wholly responsible for the success of a particular defined slice of total business: the total number of projects of the organisation. He or she identifies every person or organisation who might have impact on the ability to deliver the required project results, and ensures they are managed to provide their input to fit the project objectives. In other words, on major construction projects, it is quite normal for a project manager to have complete authority (in respect of input to his or her project) over people from the organisational hierarchy who might hold more senior positions to himself or herself.
The most successful construction project managers take the attitude that they must manage the input of others regardless of their hierarchical positions, whether or not this approach is a defined modus operandi of the organisation they work with.
I see this two-roles approach, this franchise principle, as essential in the everyday management of all organisations and not just those involved in the construction industry.
Let's face it, the real focus of any business is survival. To achieve this we must continue to do three things very well: design and produce innovative products and services; package them well; and, market and sell them effectively. Everything else is fluff.
Gone are those regrettable times when managers felt that they were the sole possible sources of innovation within the organisation. Successful managers now seek to release innovation from all levels within the organisational hierarchy. More recently management has recognised the power of the team approach in releasing innovation from all levels of the organisation. However, in all too many cases, the team is at best a committee, with little authority and often with low productivity, depsite much activity.
Management by projects (as opposed to project management, which is project-related rather than corporation-related) endows corporations with the attitude to structure an environment and with the principles that have proven so successful in the construction arena. It sets up the environment wherein people can feel confident to guarantee results and not excuses, and it often becomes instrumental in change in corporate culture in so doing.
I mentioned attitude earlier. The fact is that no structure change is necessary to gain the benefits of the system, if a readiness to adjust current attitudes is prevalent. Management, right up to the managing director, must move from the attitude that they are simply to delegate and instruct, and accept that, having delegated a project to a team, they are responsible to that team for any input required of management in the delivery of the project result... with no excuses.
And every member of the organisation must adopt the attitude of a franchisee, responsible always to deliver successful results as if they owned the slice of the business entrusted to them.
With this approach, the pros and cons of any corporate structure debate really do become a matter of attitude.
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International College of Management - Sydney
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