5 principles of designing an organization structure

This post is about 5 principles that could be useful when designing an organization structure in an IT company. Shortly, it’s about hiring people, organizing, and managing processes in a company, and supporting a creative and collaborative environment.

1. Hire when it hurts

This common sense principle is described in the book called “Rework” by Jason Fried and David Heinemeier Hansson. “The right time to hire is when there is more work than you can handle for a sustaind period of time. There should be things you can’t do anymore. You should notice the quality level slipping. That’s when you are hurting. And that’s when it’s time to hire. Not earlier.”

2. Engineer it

In one of the interviews Mark Zuckerberg said “building a company is no different than a normal process of engineering”. For people with an engineering background it’s easy to think of an organization structure as a higher level of abstraction than classess, libraries, or systems with easy to use interfaces and communication protocols. Organizing your company into teams and departments in an efficient way might follow good programming principles. Organization structure should be easy to understand, each element should serve a purpose, have clear distinctions between each other, in order to not duplicate functions. Eventually, the code will reflect company’s organization structure.

3. Allow flexibility

Organization structures should provide basic level of stability in order for the people to focus on achieving team, department, and organization goals and not being distracted. However, they should be allowed to adapt to always changing market conditions or client demands. In his book “To sell is human” Dan Pink puts it in the following way: “A world of flat organizations and tumultous business conditions – and that’s our world – punishes fixed skills and prizes elastic ones. What an individual does on day to day job must streach across functional boundaries. Designers analyse. Analysts design. Marketers create. Creators market. And when the next technologies emerge and current business models collapse, those skills will need to stretch again in different directions.”

4. Create the collaborative and responsible management team

It’s really important to have a collaborative an responsible management team. People whom you can trust and rely on. One of my gurus, Steve Jobs, has put it in the following way: “Tremendous teamwork at the top of the company filters down to tremendous teamwork throughout the company. And the teamwork is dependent on trusting the others folks to come through with their parts without watching them all the time. We are great at figuring out how to divide things up into those great teams that we have. And we all work on the same thing, touch base frequently, and bring it all together into a product.”

5. Be run by ideas, not by hierarchy

Last but not least, it’s important that the organization structures, positions, or hierarchies don’t disrupt the creativity, openness, and innovation. The best ideas should be able to find ways to win in the arguments and shape products, processes, and company culture. In order to achieve that team leaders and managers, or anyone who is “higher” in the company structure, should foster trust, openness, and honesty where best ideas can always win.

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