The Mutidimensional Organization

post # 145 — July 30, 2006 — a Managing, Strategy post

I keep hearing from large, complex firms something like this:

“We have several overall departments in our firm, each with a number of product/service/discipline teams. We also have industry groups dedicated to developing a better knowledge of (and marketing to) specific industries. Recently, we added ‘client teams’ targeted at increasing the level of service we provide to our best clients. And all of these groupings exist in (most, not all) of our many geographic locations.

With all this complexity (discipline, industry, key account, local office or region) a key player could (and does) spend an inordinate amount of time in meetings around here. There has got to be a better way to organize our firm!”

I don’t have all the answers to this complex problem, but here are some rules I would apply in trying to solve it:

Rule 1: Use different levels of organization for different things: lots of little teams for client-level relationships, one large central group for administrative services; it doesn’t all have to be (in fact, can’t be) one clean organization. As long as everybody at any given time (say in a year) knows which team they are on and what their obligations to the team are, you can have teams of many different types and sizes.

Rule 2: Some forms of organization are better than others: Most successful global firms are now organized with the following levels of importance. Most important is the target client industry (or ‘vertical’ as people seem to insist we call it nowadays). Before anything else, most people’s primary affiliation is with an industry team (or two).

Next comes, any specifically targeted client team. Third (now a lot less important) is to organize by produce / service or discipline (i.e. your specific technical specialty.) Firms need to have highly focused an skilled technical people, but few, in most professions and industries, are still organized that way.

Finally, (and this is a huge revolution from the past) geography is the least important band powerful dimension of the complex matrix. Organize (and market) by client or client sector, not by discipline or geography

Rule 3: It’s always better to get people feeling like they are (a) volunteers -self-selected to (b) small (c) mission-oriented teams. Rather than being “assigned to large departments.” (see my blog post from last Wednesday on this

Rule 4. Don’t consume the scarce time of valuable people by assuming that ‘key players’ should manage or be involved in everything – ask where their highest and best use really is. Get key players willing to let other people decide some things even when they’re not there. (This is easier of the firm members share an ideology, impossible if they don’t actually trust each other!)

Rule 5:. Apply all the well-known lessons of meeting management. For example, never have a meeting without a goal, not just an agenda.

Rule 6: Shut down all committees – assign responsibility for a task to an individual, charged with the responsibility of consulting, coaching and getting it done.

Rule 7: Adopt modern meeting techniques (everybody has to stand – no seats)

Rule 8: Use as much use as possible of modern technology tools: internal blogs, wikis and ‘jams’ to get collaboration and participation around issue, without having to meet

Rule 9: Make sure every team leaders’ mandate, objective and accountability is agreed to up-front, and that team leaders receive training in how to be effective coaches.

Rule 10: Pete Friedes’ Rule. (Pete Friedes was CEO of Hewitt associates.)

One practice I had was to remind all those who reported to me that part of their role was to have my role in relation to their group. One way was to say that they should wear a CEO hat in managing their group. That change in perspective is significant. They were not to just be an advocate for their group or their people. They had to have a “whole entity” view. If one or two managers didn’t exhibit that approach and tried to gain advantages by doing things that didn’t serve the whole, I could gently remind them that part of their job was to have a CEO view of their part of the business.

(Peter’s a gentleman, but implicit in his remarks are the implication that if the various group leaders didn’t take that view, they might be asked to play a different role in the firm.)

Rule: 11: Remember, even if you have an ideal structure, there will always be problems with cross-boundary, coordinated behaviors. Beyond structure, you need to examine whether you have the right processes in place, not only better structures. You don’t get people to collaborate better by changes the boxes they’re in

And, finally,

Rule 12: Never forget that it’s always about personalities: getting the right individual people in key managerial roles is the essential lubricant in all of this.