The Corporate Bermuda Triangle

Continueing from from where I left last........When does an Organination structure become a liability instead of facilitating seamless interaction between various functions? When a structure is decided upon much before the intricacies of activities are understood, it will give rise to what could easily be identified as a corporate equivalent of the notorious "Bermuda Traingle"; unexplained activity (read accountability) dissapperances within loosely defined boundaries. In all such cases, "Bermuda triangles" will give rise to adhoc appointments, that usually end up being permanent, like the ones most of us are already familiar with 

• OSD (Officers on Special Duty) reporting directly to the CMO/CEO/COO
• Expediters at the factory floor with "special powers" to bypass any process
• Favoured lower level employees with substantial funds under thinly veiled expense heads like the "Business Promotion Expense"  to grease the wheels that move things. I have come accross a GM(PR & Logistics) who managed this function with elan. 

While a Functional structure gives rise to functional experts who can offer only futional solutions for business problems, the Bermuda Triangle gives rise to a culture of adhocism and "jugaad"  - creating heroes out of ordinary people.

Where, in your organization, do you see the corporate equivalent of  a "Bermuda Triangle"? A flawed organizational structure could be the one that needs fixing.

What comes first ?

Managers take pride in being a part of a structure that produces results. Every output seems to happen just as planned, with no activity left uncovered. How does this come about?

Some time back, I was a part a discussion that centred around various organizational structures and this discussion seemed to get stuck on what could be regarded as the one that delivered results, consistently.

An organization could decide on any structure or a combination depending upon how each one served its business interests. There are several options to pick from

• A Functional setup with regional reporting for an MNC
• A Project based reporting & setup where the organization specializes in project execution or a R&D arm of an organization.
• A Matrix structure, with business interests taking precedence over functional reporting
• A Regional structure where different products or services may be preferred by its customers. 
• A Business vertical covering Institutional sales, Retail, Governments, Defence sector, Overseas, Special purpose vehicles etc
• Product verticals where the organization approaches its customers with a wide offering of product options for specific customer needs

In all these options, the question is not which is the best one. The question is "what comes first" ?

• What business are we in? (Products, Services, both, R&D organization, Projects....)
• Who are our customers?
• What do they expect from us?
• How do we structure ourselves so that we can deliver what customers expect from us, consistently?
• In a project based organization, this becomes even more critical. Does every large activity in the WBS (Work Breakdown Structure) have ownership in the proposed structure?

Several large organizations are a combination of different "businesses/entities/profit centres" like R&D, Pojects, Operations & maintenance, Post-Sales Services, Manufacturing -(for themselves as well as the industry they are in), but, most inexplicably, have a single structure to support activities with contrasting requirements and approaches.

A Functional structure, while it may work fine for Operations, would fail in an R&D or a project environment. Several organizations have fallen prey to the allure neat looking organizational charts only to get up bruised and rarely chastised.

Such organizations experiment with one structure after another, rarely realizing that it is the nature of their most important activity or work, the markets that they are present in, their customer and their continuously changing preferences, the nature of their products & services or the changed regulatory environment and hence the new customers............. that decide how they need to need to organize.

Coming back to the quation "What comes First" - Is there any doubt?