Henry, the CEO of a technology company, lamented the inability of his business to maintain focus on and carry out priorities during our initial conversation. Every quarter, we establish our priorities together, but when it comes time to review them, I’m informed that pressing crises have impeded our ability to move forward. We never get anything done. ”.
When I questioned Henry about strategies he’d tried to get his team back on track, he recited a long list of initiatives, including weekly check-ins, protocols for limiting excessive email, and online dashboards that show progress—or lack thereof—against important initiatives. Henry defined their issue as one of capacity (frequent progress meetings and open dashboards) and accountability (efforts to reduce email traffic), as evidenced by these solutions.
After working there for a while, I understood that Henry’s issues were really caused by a subpar governance system. The “urgent crises” impeding his team’s progress were the result of ineffective communication between two crucial areas of his company. Because of this, there was no platform for leaders to effectively resolve difficult tradeoffs.
Henry had misdiagnosed the problem. However, he is not the first capable leader to err in doing so. After 35 years of consulting, I’ve discovered how simple it is to do, largely because persistent performance issues are more complex than they first seem. Most frequently, they are signs of a more serious issue stemming from organization design. But when leaders misdiagnose symptoms, they waste a lot of time looking for superficial fixes that don’t work.
Competing priorities, unwanted turnover, inaccessible bosses, and cross-functional rivalry are four of the most frequent annoyances I’ve observed to develop as a result of ineffective organizational design. If you experience any of these problems, think about whether the design issues I discuss below might be the root of your problems. By doing this, you might be able to identify and address the true issue.
The matrix organizational structure of Henry’s business meant that most employees had two bosses. They were arranged according to the following functions: marketing, sales, and engineering. Additionally, they were divided into three groups of clients: small businesses, individuals using software, and users of enterprise platforms. Each team was headed by a functional head and a division vice president who oversaw the designated customer segment.
In short, Henry’s company wasn’t designed to govern a matrix. His business was created to oversee a functional, vertically structured organization. Decision-making systems must be established in a complex organizational structure, such as a matrix, to control the inevitable conflicts that arise over priorities and resources. Otherwise, as was the case with Henry, those unresolved conflicts will become dysfunctional. No quick fix would be able to solve the problem of conflicting priorities until he addressed this more fundamental issue. Upon realizing this, he expanded his leadership team to include the VPs of the customer segment, and he started giving the three customer segment teams the authority to manage operational tradeoffs by allowing them to establish short-term priorities for both segments and functions.
Unwanted defections are frequently referred to as a retention issue by leaders, who send HR to encourage people to stay. To appear to be promoted, stock options, bonuses, and/or fabricated new titles are given. If the defections are caused by overworked departments or toxic managers, this might temporarily work. But if they are widespread, it’s likely that an organizational issue is to blame.
One company I worked for struggled with higher turnover after several years of disastrous reorgs. The executives dismissed it as a result of people being frustrated by too many changes that failed all at once. But that wasn’t the problem. The real problem was that leadership had used some of the reorgs to combine specific jobs, like finance, accounting, and purchasing, into overly broad roles with a wide range of responsibilities in an effort to cut costs. Other reorgs were used to narrowly define certain jobs, forcing many employees to collaborate closely with one another in order to complete their work. Some people were stretched far beyond their capacity due to these poor role designs, while others were stuck with menial tasks that required excessive coordination. For many, quitting was the best option.
The company needed to understand that high-quality roles are created to achieve desired results rather than focus on people. When businesses create roles for people, they unintentionally define their value as the sum of everything that person can accomplish in that role. Due to this, a role is only considered important when a superstar performs it, regardless of how crucial it is to the success of the company. Similar to this, a role played by a subpar performer is viewed as unimportant.
The issue is that not all roles within an organization are equally crucial. A role’s value is defined by effective design according to how it affects competitive performance. The company I advised discovered that a role should be defined by the skills an employee would need to have in order to fulfill it and provide a set of specified metrics to the entire organization. Only then should qualified talent be appointed to it.
Too frequently, when metrics like “my manager is available when I need them” in employee surveys show low scores, people assume there is a problem with time management or that managers don’t make an effort to meet with their direct reports. When this occurs, managers are given prepackaged tools that instruct them on how to conduct one-on-one meetings more successfully or prioritize their tasks more effectively. Training on empathy may get added to the leadership curriculum. Coaches may even get hired. However, in practice, this problem frequently affects much more than specific leadership techniques.
This was the case in one organization I worked with. Their workers complained that their leaders never provided them with enough direction or feedback. In contrast, leaders complained about having too many direct reports below them and having to work through too many layers above them in order to secure resources. The average middle manager had 12-18 direct reports. The company, like many others, used spans of control as a way to “stretch” its leaders. They believed that the more direct reports you had, the more significant you must be.
However, for teams to function well, the number of direct reports on a leader’s team and the number of layers in a hierarchy must be carefully chosen based on two factors: the nature of the work being performed and the level of coordination required to complete it. It frequently takes extensive coordination to carry out effectively highly complex or high-risk work, such as scientists managing clinical drug trials or analysts interpreting sensitive data. Because of this, it makes sense to limit a manager’s scope to ensure high-caliber performance. Engineers writing technical code or teams working on manufacturing lines, for example, are examples of standard, more repetitive work that typically allows employees to be more autonomous, allowing a manager’s span to be wider. However, if these details are missed, a manager’s accessibility may be severely limited. But regardless of the work those people are doing, it is unrealistic to expect any leader to effectively attend to 12 or more direct reports, as was the case with the organization above.
Labels like “uncooperative,” “bureaucratic,” or “political” are frequently used to explain why divisions like sales and marketing don’t get along, or why operations and R&D are at odds, when people find it difficult to collaborate across silos. Employees are moved into liaison roles or team-building exercises are implemented to increase trust and foster cohesion. But frequently, misaligned metrics and/or incentives that actually encourage rivalry lie beneath divisional conflicts.
Metrics and incentives are vital to aligning work across teams. They synchronize tasks by ensuring that everyone is working toward a common goal, which shapes people’s behavior by defining what is important to the organization. Contrarily, misaligned metrics and incentives may act like grinding gears, luring individuals away from one goal and toward another.
Two marketing divisions in one company I spoke with experienced this. One was compensated for bringing customers to the business’s website, while the other received compensation for turning those customers into customers. Due to the conflicting messages on the landing pages, the finger-pointing, missed goals, and reluctance to share crucial analytics despite their dependence on one another for success, these events caused
They must be able to closely examine their individual incentives and metrics when two functions interact to produce shared results in order to make sure that they encourage, not discourage, the necessary collaboration. The two divisions worked together for a day to create a strategy to ensure that driving traffic and conversions were not treated as mutually exclusive goals. They also established shared access to one another’s analytics so they could consult before creating plans for doing so.
Chronic issues are not random, but they do have deeper roots than we typically see. Even if the results you’re getting aren’t what you want, your organization is perfectly designed to get them, I tell my clients. If you step back and take some time to observe the factors contributing to your problem, you will find a workable solution. “The next time a persistent organizational irritant won’t go away despite your best efforts, ask yourself, “What deeper organization design issue might this be a symptom of?”
- Absence of clear direction. …
- Difficulty blending multiple personalities into a cohesive and unified team. …
- Failure to develop key competencies and behaviors. …
- Poor communication and feedback. …
- Lack of awareness.
Why is it important to resolve organizational issues?
Both the organization and its employees stand to gain significantly from identifying and resolving organizational issues. The sooner you can fix organizational problems, the sooner you can improve the environment at work and devote more time and resources to other business-related tasks. Good organizational practices encourage a feeling of accomplishment and success within the business. Organizational improvements can also serve as inspiration for a company to keep pursuing novel approaches or implementing preventative measures to steer clear of future problems.
7 common organizational issues (with causes and solutions)
Although some organizational problems are more frequent than others, they can all be difficult to resolve. These problems can be resolved if one is dedicated and committed to producing favorable results. The seven organizational problems listed below, along with possible causes and remedies, are:
1. Turnover
When employees leave their companies frequently and in large numbers, it is referred to as high turnover in an organizational setting. To make up for it, a company must frequently hire new employees to fill those positions. This could consume company resources and slow down workflows. Some reasons for high turnover rates may include:
Organizations may find success in overcoming this obstacle if they consult with their staff and get their feedback. It’s advantageous for managers to pay attention to the issues raised by their staff and carefully consider how they can change or improve. Taking concrete actions to address team members’ concerns can help boost productivity and employee retention rates.
2. Productivity
Productivity is the amount of work that employees successfully complete on schedule. High productivity indicates that a business is meeting its production targets, that operations are on track, and that it is completing all orders on time. An organization may suffer from productivity losses because:
Managers may benefit from adding more staff or giving employees breaks so they can relax in order to address this organizational problem. Set reasonable and achievable deadlines and gradually acclimate your team to upcoming changes so they can prepare.
3. Process management
Process management is a tool used by managers to make sure that their team adheres to the best procedures for completing tasks quickly and effectively. The manager must establish the rules and regulations, choose which practices to uphold, and determine which ones don’t add value. Poor process management can occur because:
A manager should collaborate closely with their team, comprehend their needs, and take action to implement procedures that will help them complete their work quickly and effectively to solve process management issues.
4. Role specification
Role specification entails selecting the person who is best suited for the position and giving that person the appropriate amount of work. Role specifications that are inadequate can interfere with processes, decrease productivity, and hinder teamwork. Role specification issues can occur because:
The ability of managers to assign work to the most qualified team member or provide training for team members to succeed will help the organization overcome this organizational challenge. Additionally, managers must conduct a careful hiring procedure to select applicants who are qualified for available positions. They might seek the assistance of recruiters who are better at locating qualified candidates for particular roles.
5. Customer satisfaction and relationships
Relationships with customers are among an organization’s most critical components for success. Increased revenue and consistent purchases as a source of income are a result of happy customers. Poor customer service or subpar products or services may cause clients to lose faith in a business.
Retraining staff on how to deliver the best customer service and interact with customers through surveys, social media, and market research could be one organizational issue’s solution.
6. Innovation
Companies use innovation to create fresh concepts and broaden their product and service offerings. An innovative company embraces new possibilities, incorporates modern technology tools, and establishes itself as a market leader. Organizations experience low innovation and grow stagnant because:
By paying attention to your team members’ ideas and fostering an environment where they feel free to express themselves honestly and openly, you can promote innovation in your business. It’s also beneficial to carefully examine current business procedures and make the necessary adjustments so that fresh concepts and innovations can be quickly incorporated into the operations of the company.
7. Teamwork
Teamwork involves employees working together to achieve a common goal. Effective teamwork makes everyone’s job easier to complete and increases productivity and revenue. Teamwork within an organization can falter when:
Try organizing team meetings to address this organizational issue so that everyone can voice their concerns and develop solutions. Avoid favoritism so that everyone feels appreciated and motivated to express their opinions. Additionally, you can hold individual meetings with each team member to determine how to best advance the group in light of each person’s feedback. When personalities clash, it’s crucial that the parties involved have a civil discussion about their concerns in order to find a peaceful solution.
