There are several models or ways to organize the structure of a company. Most of them are well known. Their pros and cons are also well discussed and still we are jumping from one to the other one without (most of the times)taking a look on what is quite important on these days: adaptability, collaboration and decentralization.
It depends of the company which models is implemented.
These models, as systems, must evolve in order to survive. Otherwise they will become obsolete and chaotic to manage. But how do they evolve? Are they flexible enough to adopt new practices on time to face new challenges?
For that, let’s take a look on the different “established” models.
According to Wikipedia possibly the first use of the English word “hierarchy” cited by the Oxford English Dictionary was in 1880, when it was used in reference to the three orders of three angels as depicted by Pseudo-Dionysius the Areopagite (5th–6th centuries).”
This model is quite effective for unidirectional work. It is efficient as it follows a command line. A decision is triggered, an execution follows.
This model presents many cons. It is all about the most powerful person moving the strings. Making the decisions, at many hierarchical levels. It started to be used after Frederick Winslow Taylor presented it in the 1900 Paris Exposition Universelle.
Old times, aren’t they?
This practice remains active nowadays even when it is plagued with so many problems. It is full of bureaucracy, slow processes, miscommunications, lack of engagement, almost no chance for collaboration, etc.
So, probably this is the less adaptable model of all of the most used models that we are analyzing on this article for many reasons. Modifying such structure will be always the most challenging task at any company.
It was obvious that adopting hierarchical structures were bringing more problems that solutions. The Flatter model aims to remove layers from the hierarchical model to start being more flexible.
Definitely it is a step forward to kill rigid processes but it is a good call for companies still sinked on traditional management practices.
To achieve a good performance with this model there is a basement of prerequisites to be done. Otherwise it won’t work. One of these conditions is to have a shared knowledge source where all the employees have acces to. So it is easier to foster collaboration and to avoid miscommunication.
This model still shows not flexible ways to adapt and modify its structures even when all its requirements are set on place.
This model is specially problematic to apply on large companies. It is a good option to start-up though. Many companies started using this model and as they grew they had to adapt and set some non-flat structures on place. Or mixed them.
Just try to fit this model in a large company, let’s say Google. Yes they did try it, and it failed miserably. Google’s founder CEO fired all its project managers in 2001, because he wanted no added layers between engineers and the CEO.
That decision lead Google to one of its worst times as a company. So, if any company uses this model, eventually will be forced to grow and adapt.
If the companies remain using this model as they grow, it will be to chaotic and costly to solve its organizational issues. At certain point one of the other models should be adopted, or at least variations of them.
This is one of the most adaptable models as it gives the chance to adopt other models into the whole structure. This approach develops itself depending on the requirements of the projects and their requirements.
It is specially powerful on projects with a specific duration as the set up of the structure is also temporary, diverse and able to scale.
This approach presents an interesting idea about management. 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 a sort of hierarchy based on roles, not on job titles. Zappos is a well known example of a big company applying this model.
In the other hand there are other examples moving off from this structure. Medium itself adopted new structures to meet its requirements as company even when still some principles from Holacratic still remain in different teams.
Holacracy emphasizes that authority does not need to be centralized and puts trust and responsibility in the hands of individuals at all levels.
So far, it seems to be really good for small-to-medium companies. But there are many doubts about how scalable is this model even though it reflects a modern view of work with people assuming different positions/roles in a company.
Certainly there is a lot to be said and discussed on this topic. It just depends on the company. Always. All the mentioned systems are different approaches on how to organize work processes. Some of them give more space to collaboration, others aim to decentralize the decision-making processes.
But are these enough? Do they cover the needs of your company? Are they able to develop easily?
This model presents a decentralized way to organize communication on teams, business units, departments in so-called loops. The loops are the basic structure of this system.
If this communication model aims to boost efficiency why not thinking of building organizational structures on top of it. Let’s give it a try.
Each loop is composed for a group of participants that trade with defined assets. These participants follow a certain set of rules in order to keep certain behavior in the loop.
The minimum size of a loop is two employees and a loop can be part of bigger loops. This allows companies to create a shared base knowledge per loop where participants of each loop can collaborate within other participants of the same loop. Or bigger loops where they also can collaborate.
This approach is quite easy to adapt, depending on the size or distribution of the company. It is all about the size of the loop and the amount of needed iterations.
Each loop has a leader or accountable person, responsible for the performance of her primary loop (team). Each participant brings her expertise to the loop and each one is accountable for an incremental at the end of an iteration.
Collaboration in this model is nothing else that merging loops on a bigger loop. Easy like that. The ones responsible for these bigger loops are the leaders of the sub-loops.
Each loop provides an incremental after one iteration is done. For instance a company, as the biggest loop, should create an incremental at the end of a quarter (this is one iteration of the biggest loop). Its performance can be measured from the ability of a company to satisfy its metrics and OKRs from a defined strategy. The final incremental is the sum of sub-incrementals.
The Loops Model has a structured management with the loops’ leaders being responsible for the performance of each loop.
The Evolutionary Leadership theory exposes that large groups just aren’t effective without leadership, and leaders aren’t effective without the ability to manage smaller groups.
This is how this model aims to solve the size and distribution problems. Leadership is also decentralized and accountable for shared goals.
It is not my intention to define what is good or wrong about this topic. In this article there is nothing else than some notes of different company structures and how it is possible to adopt a more flexible, generic and adaptable model summarizing the pros of the already existing model.
As I mentioned before. It just depends on the company. Let me know your thoughts. I will keep working on this topic.
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