Sometimes I envy startup culture.
Fast moving. Innovative. Fearless.
I envy that entrepreneurial spirit you can just feel coursing through a startup organization which, ironically, may have very little formal “organization” at all when it comes to hierarchy or processes. They have to get a lot done, and they have to get it done fast. There’s a buzz. An energy. An excitement.
Almost inevitably, as a company develops, more formal processes and structure are introduced. Operations are separated from support functions, and there are mandatory approval levels for decisions. Sound familiar?
Hierarchy is put in place to establish responsibility and, hopefully, accountability. Who is ultimately responsible for making sure that the staff is doing their jobs as intended? Who is responsible for setting and communicating the company’s vision, mission, and goals? Who will be held accountable for shortcomings, and who holds the responsibility to turn things around?
In a perfect world, an organization’s structure would work out perfectly the first time, be able to accommodate future growth, and there would be no turnover or inhibitors to operations running smoothly. But that’s just not the world we live in. There are problems. Customer complaints, product defects, financial problems, down time, personnel issues, policy restrictions, and a million other issues can create barriers to getting things done quickly and efficiently.
Companies change, and so organizational structures must change. There are restructurings to boost efficiency, implement new systems or technologies, downsize, or simply to accommodate the changing needs of a business.
Problems arise when the complex needs of an organization are simplified, and the changes to process or hierarchy don’t take into account the real operational requirements that help a business run smoothly.
I recently heard the story of a new hire who wasn’t immediately issued the equipment required to do his job. In fact, it took almost a month for his direct manager to get the necessary authorizations to issue him a computer. Because of a company-wide freeze on new IT equipment, it took so much time to creep up the approval ladder that this company paid a person to sit around for nearly a month. What type of insanity is that? I can imagine that manager being infuriated… thinking “Somebody Just GO! Make a Decision!” But the question is, why wasn’t this manager able to make the call, get the equipment, and get his employee productive?
The answer is hierarchy, and the approval levels that come with it. I’m not arguing against hierarchies in organizations. There are real benefits to having reporting lines, escalation paths, and centralized accountability. But when organizational structure becomes a series of circus nets, one layer on top of another, we spend all our time tangled and none of it moving forward.
The three keys below can be used to assess whether your organization’s hierarchy is staged for success or a barrier to productivity.
Authority + Accountability
It’s fairly well understood that when a new manager is put in a position of authority, it comes with accountability. She is now responsible for new business sales, financial performance, operational activities, or whatever else may come with the territory. It’s typically her responsibility to report to the higher ups on whether targets are being achieved, and it’s usually bad news for her if they aren’t.
The reverse is where things can fall apart. When accountability is assigned to a manager or management team, they must have the authority to control their own results. There’s nothing more pointless (or frustrating as a manager) than to be accountable for results or performance over which you have no control. Tensions rise, but too many spoons in the pot can mean there’s no action, and that means no improvement.
Managers Must Manage
Is this obvious? Hopefully.
But then reality kicks in, and issues arise. Management gets pulled into microscopic issues that could very well be handled by an empowered employee, and focus is pulled from the manager’s primary responsibilities. Putting out fires becomes the daily work, and the big picture fades into the background, pulling management effectiveness with it. How can that vicious cycle be prevented? Give managers the time and the permission to manage. Because they don’t depend as heavily on hand-holding by management, empowered employees are important for this to work, and managers at all levels should strive to be experts in creating an engaging, empowering environment for their employees.
It’s my honest opinion that if an employee never makes mistakes, she isn’t taking enough chances. Perhaps more importantly, the same is true for managers. Adding levels to an existing hierarchy is tricky business. It’s foolish to add a level to an organizational structure, for example, but not give the new managers the power to make decisions or the support they need to do their job well.
Too often, experienced managers confuse support and management. Whether an employee is new to their role, new to the organization, or maybe just hasn’t been performing, part of being a manager is being a coach and mentor. A good manager will listen, advise, and give feedback on a regular basis. The result is a happier and more engaged management team and staff, so everyone benefits.
Hierarchies are established to create clear responsibility levels. In order for them to be effective in practice, authority and accountability have to go hand in hand. Managers must be given the time and permission to manage, and management at all levels should work to create an environment where occasional mistakes are valued over inaction.
What do you think? What positives and negatives have you seen hierarchy have on your organization?