6 reasons why your corporate problem is in the organization chart

Here is an understatement: 99% of the corporate problems are caused by the organization chart that does not match the innate business processes and your client's needs.

My examples are from software and marketing agencies but they can be expanded to other industries.

6. Too many divisions, positions, departments, etc

Organization chart is not simplified to the lowest common denominator and creates operational expenses overhead, difficult decision making, unsatisfied clients, stressed teams, loss of productivity, you name it.

5. Merging conflicting positions

e.g. Merging PMO and CTO or software architecture and production management.
These are capital mistakes that create internal and eventually a metaphysical conflict of interests inside the same person... And unless you're Freud it can create bunch of existential doubts :) ....

4. Bad decision-making process - using the organization chart to make decisions

Decision-making process uses the highest-supervisor-shortcut: this VP usually is not at all competent to make this call, and does not have the time to properly assess the situation.

3. Strategic positions are not close enough on the organization chart

e.g. Client management is too far away from R&D, tech support and product development, etc

2. Gray zones where working processes overlap on several job positions are not well defined and understood, and the decision process is not clear.

Too many positions fighting over the same gray zone: production manager, PMO, CTO, product managers, account managers, software architect, creative directors, information architect, project managers.

Top deciders are not aware of the gray areas created by the processes and they unknowingly push the decision making into these zones. Yes, this comes as a corollary of 4 (Bad decision-making process).
The decision-making process should be clear and tailored on specific issues. Several people might have the decision power over the same gray zone depending on the issue type (technical, client satisfaction, budgetary, timeline). The top decider should solely prioritize the issue type and support the specialists in the decision-making.

1. Focus on processes and on independent disciplines rather than on client's need

If you are selling branding, have a Branding Department!!

Don't break your company in departments of 4 persons each... IT, design, storyboarding, strategy, etc

A company lives with money. Money is brought by clients.
Clients pay to get THEIR problem solved.

Clients don't care about your independent disciplines.

"Our branding department is working on it"

sounds better and makes more sense than:

"Our strategist has spoken to the creative director who has to inform the design department of the change and ... hold on.. which reminds me i have to speak to the CTO about this change... man they won't like it... with the CTO or with the architect... oh no, i better speak with the project manager or with the PMO... wonder what would the QA department think if they find out... gotta talk with the deployment department and set up a meeting to set up the new upgrade schedule... damn this is complicated... ok ok imma do it myself by tonight, but don't tell anyone..."

So focus your organization chart around your client's needs.


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A great example of business re-engineering is Louis V. Gerstner for IBM in the 90s.
Check out this book for an interesting analysis and other cool examples. Seduced by Success: How the Best Companies Survive the 9 Traps of Winning by Robert J. Herbold (former Microsoft COO). In the book he is arguing how success might be a great vulnerability to companies and the importance of knowing how to capitalize on inflection points.

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Octavian Mihai