The structure component – in detail
How roles and teams combine to create a tangible form for the business.
Part of the building the organisation layer
INTRODUCTION
Structure is the mental model that most people use first to understand an organisation. But this component is not about just drawing a nice structure chart.
The structure component of the B3 framework is about understanding how people and activities are best grouped within the operating model to get the right work done.
Think creatively and engage frontline teams in considering how to best organise for autonomy, engagement and productivity within the business.
Never assume it needs to look like the traditional pyramid with senior people at the top, a middle management layer and then the frontline work happening at the bottom.
In the fast moving and disruptive environment most businesses operate in, a pyramid structure doesn’t enable the agility and innovativeness that’s needed now. It also stifles autonomy and reduces employee engagement.
A more progressive organisational structure creates entrepreneurialism and encourages a culture of ownership and responsibility among team members.
In detail
How does structure evolve with growth?
There are two broad types of role change that happen as a business grows:
- Roles become increasingly specialised – this means the structure needs to accommodate more specialised roles, without creating expertise silos.
- Roles are increasingly duplicated – so there are many identical or very similar roles, meaning that different approaches to management or oversight are required.
A well designed structure takes account of these changes and so won’t need major change during growth.
If you’re designing a structure, do a paper stress test against these role changes. How would the structure cope if specialist teams emerge or if headcount in one part of the business grows significantly?
When does structure need to change?
There’s no single answer to this question, but there are some typical “break points” in headcount to watch out for during growth:
- Around 10 people – most businesses start to see a need for roles to hold some responsibility for co-ordination and communication. These don’t necessarily need to be dedicated management roles, but do require skills that haven’t been required so far.
- 20-25 people – some dedicated leadership roles are needed to keep growth moving. There’s a growing split between working in the business and working on the business – but leaders have to do both.
- Around 50 people – a group of dedicated leaders is needed, usually with each leadership role having a functional focus. Collective leadership of the business by this group and introducing external expertise is increasingly important.
- Around 100 people – by this stage there’s a need to have a well-functioning senior leadership team that spans all the areas of then business running the business.
It’s worth noting that for businesses with greater complexity (for example, operating in multiple territories), these thresholds might be reached at lower levels of headcount.
What types of structure should I consider?
Check out the types of company structure explained in this article as a starting point.
Think about the operating model you have chosen for the business. The structure needs to be congruent with that model, enabling teams to operate to deliver the strategy you’ve adopted.
Don’t blindly copy other companies’ structures and assume they’ll work for you.
Understand why those structures worked for those businesses at that stage – and then incorporate those insights into your organisational design.
Background reading
- Guide to Organisation Design: Creating High-performing and Adaptable Enterprises (book)
- How to structure your company to successfully scale (article)
- Lessons from re-organising a lot (article)
- Start-up Maturity Framework (multiple articles)
- Reshaping the tree: rebuilding organizations for AI (article)
