We recently initiated a blog series surrounding a fascinating topic – “The Bermuda Triangle of Growth.” We provided an introduction to this concept, describing it as the stage in a company’s growth when the business becomes stressed by a lack of structure, undocumented processes, and outdated systems. The second post discussed its implications for the people facet of this growth stage. On this third take, I will be focusing on organizational structure and the growing pains companies suffer as they travel through the “Bermuda Triangle of Growth.” To help you identify whether you are traveling through this complex zone, here are a few signs that can help you detect it:
- Functional kingdoms grow to new heights. The strength of silos increases, vertical layers multiply, and separation among them becomes apparent. Leaders continue to foster and nurture their “kingdoms” within the organization, protecting their own. As a result, key steps fall through the cracks, resting between the gray areas that are unattended by the newly created divisions.
- Great divides and rivalries begin to emerge. Animosity between Sales and Supply Chain, Sales and Marketing, Supply Chain and Manufacturing, “the business” and IT, or corporate and regions, to name a few, become topics of everyday conversation, rivalry and agitated discussions. Even worse, passive aggressive behavioral patterns begin to emerge where individuals show support in public but take subversive action – or no action at all – in private.
- Complex matrix organizational structures are implemented unsuccessfully. Most include unenforceable reporting dotted lines. In addition, there is a proliferation of marginally differentiating titles, coupled with an abundance of vice-presidents managing other vice-presidents.
- Misalignment and unnecessary red tape slow down business as usual. Approvals begin to take longer than ever before. When things fail, there is usually finger-pointing without true root cause analysis. Bureaucracy ends up significantly slowing down the decision-making process.
- The voice of the customer becomes harder to hear, which makes it harder to respond. With all of the signs above occurring, focus is taken away from the ever-important customer. When feedback comes in it is often shrouded, and then filtered by layers of communication, after which it’s difficult to ensure that corrective actions are taken.
An inadequate organizational structure forces companies to drift away, deep into the swells of the Bermuda Triangle. Without swift changes, the structure continues to gain complexity, even though its strength is diminishing. Over time it becomes so fragile, stagnating its growth, and rendering the company irrelevant. What is imperative is to conduct a thorough evaluation of the appropriate organizational structure needs, based on the current and expected conditions of the company. It is strongly recommended to challenge long-standing, siloed power structures, and to ensure that the new structure provides the right foundation for organizational growth. First, define the roles, responsibilities, and skills that will propel the organization forward, and then look to fill these roles with the right people, not just those available. Usually this exercise results in enterprise-wide restructuring. Great companies – those who get it right – do it quickly and transparently, without ambiguity; for this to happen, difficult conversations must be handled tactfully and tough decisions must be made swiftly. Always keep in mind that the right organizational structure can deliver a competitive advantage as you implement growth strategies. Setting the right foundation will foster innovation, collaboration, and agility, ultimately enabling growth. Done properly, organizational structures will allow process to scale as the company reaches new dimensions. Clearly defined ownership and accountability of budgets, goals, and decisions allows for faster adjustments to market conditions. In my experience, although simple is good, transparent is better. A full understanding of the organization’s transition, from both an individual perspective and a leadership view, will lead to faster adoption and execution. A new organization, built with flexibility and evolution in mind – built for the future – will lead you out of the Bermuda Triangle triumphantly. Don’t miss the next blogs in our Bermuda Triangle series on process discipline and technology.