After an almost 40 year career at various Corporate, Crown Corporation and Public Institutions I have come to the conclusion that organization structures really matter and fact can be the difference between high quality outputs (product, service) provided efficiently (time frames and cost).

A Model to Consider

Years ago I worked with an organizational psychologist.  I was fortunate to be exposed to his theories about companies structures.  There are many of these theories, however, those of Elliot Jaques really resonated with me.

Organizations consist of layers of complexity.  Let’s call these strata and number them.  The lowest number the most simple and the highest most complex.  So S1 (strata 1) is junior and say S5 would be much more senior.

In order to keep the model simple and effective we determine which strata of the organization you reside in, based on the time it takes to do your longest task and the complexity associated with that task.  Complexity ranges from do this/do that to do this, consider that, if this happens then possibly that etc.  Basically complexity is related to the information tree associated with making a decision and completing the task.

How about and Example

Take a bank.  A teller’s longest task is weekly balancing.  The decision tree is simple, count this cash, make a deposit.  Check the end of day balance and confirm it is correct.  Fairly straight forward.  So this role would be a S1.

The head teller’s longest task is scheduling the tellers over a month and the decision complexity a little higher.  What will the line up be at noon, should I schedule more tellers, if the commercial customers come in a ten in the morning I should have three tellers on duty but what if they come in at eleven. This role could be a S2.

You can following this process up the strata’s from supervisor to manager to director, vice-president, senior vice president, etc.  Regardless of the specific title the actual work can be mapped to an applicable level.

Note:  This model is not predicated on titles (although I have referenced those above, the key to this model is to determine each strata based on the work being completed by the role (longest job and complexity), not the title.

Using the model to improve organization structure.

Like the basic definition of the model using it to improve quality of organizational output and overall efficiency is very simple.

• When people at the same level report to each other you get compression.  That is someone whose work fits the S3 criteria reporting to someone else whose work also fits the S3 criteria.  Typically these two individuals will both be frustrated, not feeling comfortable in their roles and this effects their work.
• When a person at one level reports to another 2 levels or higher you get a gap (i.e, an S1 reporting to an S3)  This gap results in a deficiency in the level of support the lower level role is receiving and work quality is impacted negatively.

The fix is to identify gaps and compression within your organization structure by reviewing the work done by each role (e.g., tellers, head tellers, customer service representatives, assistant managers, deposit analysts and so on for whatever roles exist in the Corporate or Institutional area).

Then simply validate the reporting relationships and re-organize to eliminated any gaps or compression identified (i.e., add or eliminate roles and reporting lines as needed).

Voila, your organizations performance will improve within six months.