Organization
Streamlining your organization – you can get that really right or really wrong!
It is not because the motivations are wrong, but more so because there are multiple imperatives that drive the organizational change and we have to assure that we stay true to them all, balance them all.
Often, one of the key imperatives for organizational change is cost. Looking to drive more bottom line by forcing productivity and efficiency.
At times this is a right move to “push” the organization to productivity.
And often, as we start to look at the opportunities associated with this, we choose to align our organization in different ways to allow it to become more effective – perhaps making adjustments to P&L structures, how we organize around products, verticals.
And this is where it often happens. It is common, and totally understandable that the executives who make the decisions, are more familiar with the people closest to them (the next levels) and the tasks that are required of them.
Often this leads to unequal justification of those corporate organizations.
It is only natural that our inclination to act on people and organizations most removed from us is easier (let alone that I can delegate that) but it is absolutely wrong.
Intuitively we know that we have to assure that we do not jeopardize the structure where the work is done for our customers – where execution happens.
Add to this that the cost of a corporate executive is multiples of a frontline person.
Add to this that all work done by corporate flows down to the field!
My rule of thumb has always been that when cost cutting is an imperative, I have to hold my executive team to cut their executive, corporate overhead by at least twice the percentage than the frontline field organizations.
So if, for example, my organization has a corporate structure, and a regional staff P&L structure and a field country P&L structure – Regional office cuts 2x% of field. Corporate cuts 2x% of Regional.
Why? The closer the organization is to the customer, to the work, the more we have to assure it is resourced to execute efficiently and effectively.
Yes, there are exceptions to this rule – if I am funding strategic initiatives, or if a technology implemented needs to drive frontline efficiencies – but don’t get fooled by the exceptions.
If I am not serving my customer well, all the rest does not matter.
organization
Organize accordingly.
