Organization Design Impedes Lateral Relationship Building

In addition to the top-down flow of communication in both formal and informal channels, the organizational design may impede the development of strong lateral relationships. Typically, meetings focus on the vertical organization—managers and their direct reports. The opportunities to meet and get to know peers—those at the same level across the organization— are rare.

As we mentioned earlier, some enlightened organizations try to create esprit de corps among their managers by hosting large leadership conferences. However, as we also previously noted, these events may focus more on style than substance. Further, the schedule can be rigidly structured with huge plenary sessions coupled with concurrent breakout sessions that follow. Generally, these breakouts are either designed to entertain or are structured to serve a vertical slice—again managers and their direct reports. In either case, there is little opportunity for networking and cross-functional or cross-unit relationship building. So, the vertical design of the organization defines—and restricts—relationships. Consequently mid-level managers find it difficult to gain a broader, more strategic view of the organization and how their work combines with others for the success of the firm.

Moreover, management retreats that are designed to build teamwork and esprit de corps are limited to functional teams with a leader and his/ her direct report team. Although there may be value in such events to build internal teamwork, they generally focus inward on the needs of the group rather than on the broader strategy. If "guest" executives are asked to attend to address broader organizational issues, their vantage point is that of the executives rather than peers of the target audience. Once again, there is limited opportunity to develop peer relationships and to learn more broadly about the organization from the perspective of peers.

Conversely, in an unprecedented move, an innovative executive in one large publicly traded company sponsored a customized leadership-development program that was designed and delivered to a horizontal slice of the organization. In the program, one segment was focused on identifying common problems and brainstorming solutions. Each individual was asked to bring a recurring problem and brief the larger group. As the problems were identified and the discussion ensued, participants discovered that others had solved the very problems that they had found so perplexing. One rather quiet participant raised his hand and commented, "You know, I just realized that for most of our problems, the answer is in the room." An inspiring silence fell over the group as people began to nod and smile. That evening over dinner, much of the discussion focused on the fact that though the participants had much in common and in some cases had worked in the same company for many years, they had never had a chance to really get to know each other and explore what they had in common and how they might help each other.

With a matrixed organizational design, the design itself can present challenges. In such a design, an individual might have two or more bosses. In such situations, the competition for attention from those bosses may cause great confusion and stress. Having to juggle priorities, meeting schedules, and performance expectations from more than one boss can breed despair and undermine teamwork. Again, competition is likely to eclipse cooperation when rival loyalties and competing priorities abound.

Interestingly, although matrixed designs might sound effective, working inside such a design is extremely complex. In his book, Designing Matrix Organizations That Actually Work,6 Jay Galbraith, a recognized expert in organizational design, describes companies that may have as many as six matrixed dimensions around which they are organized. Then, he suggests that perhaps the number of dimensions that could be used within an organization is unlimited. However, many who live the matrixed life might disagree, as the complex web of relationships in such organizations cannot help but cloud messages, strain interactions, confound loyalties, and confuse priorities.

In smaller, entrepreneurial organizations, the organizational design may be "flat"—with the founder and a few trusted "lieutenants" running the show. As the organization grows and new talent is hired, the relationships and responsibilities may evolve in the minds of those at the top but can be quite obscure to those just joining. In one such organization, one of the trusted lieutenants was expected to train new hires but was given no formal charge to do so. A new hire, selected for considerable expertise and talent, then resented the guidance of the lieutenant. There was no formal reporting relationship and the leaders had not made clear that the new hire should look to the lieutenant for direction, support, and training. Not wanting to disappoint the founder, the lieutenant struggled for months to make the situation work. By the time expectations were clarified to get everyone back on track, the new hire's relationships within the firm had deteriorated beyond repair and he left the organization.

In sum, talented people can struggle in an organization where roles and expectations are not clear and where relationships are not strong. If the organizational chart has so many arrows and dots that it starts to look like a Ferris wheel, rest assured that there is sufficient role confusion. Such organizations may waste resources and lose needed talent—and results are likely to suffer.

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