Rotten Habit #4: ignoring structure as a key driver of your culture

Welcome to the fourth edition of the Rotten Season, our weekly insights into the hidden factors destroying your culture.

In our work, organisational structure is something of a Pandora’s Box. Like process and politics, structure drives culture (and vice-versa). But people inside organisations can be resistant to this fact. They say things like: “We have to deploy certain people in certain roles to do certain jobs. We’ve always made ball bearings this way.” And, “We’ll start thinking about culture when we’ve got this re-org finished, thanks.”

Of course, every organisation needs people to perform certain functional roles. But handling a re-org without paying attention to its cultural impact is, at best, a game of hit and hope. I am not talking here about the immediate morale impact of structural change (although that does matter). I am talking about the significant second and third-order consequences that are involved in changing structure. The way we define and organise our roles at work influences the stories we tell ourselves about what our businesses do and why. In turn, this drives outcomes, both good and bad.

So, what is a ‘good’ structure? Organisational design is a favoured topic for many consultants. And yer gurus’ latest thoughts on, say, holacracy keep the likes of the Harvard Business Review pulling up trees. At one level the problem with such debates is that they ignore a simple reality. All businesses are different, and structures (like processes) have to work in the unique context of the business in question. 

But in principle a good structure enables two things to happen. 

One, intuition gets fully connected with experience. Traditional hierarchies are good at disconnecting these attributes. Leadership has the grey hair required for effective decision-making but limited native insight and connection to broader cultural trends. Junior staff have new insights borne of a different life experience but lack the clout that comes with the grind of years. Finding new ways for these qualities to interact is a prerequisite for organisational inventiveness.

Two, talent is secure and flexible enough to go where it’s needed. Matrix structures are notorious for constraining organisational talent flows. This can result in resources being locked into lower value activities and opportunities getting missed. So, the challenge is to make the matrix malleable.

Fundamental decisions on structure are often settled very early in a business’s lifecycle. Even the largest corporate organisations rarely challenge the basics. This holds true no matter how many times they restructure – despite this being a seemingly annual process. In truth, structure should be an ongoing discussion, with leaders playing an active role. 

The advice, then: make sure that, “how should we organise ourselves to best effect, given what we know now, and where the future is going?” is a question asked in the far-reaching spirit that it deserves.

Explore more