The traditional organizational structure was a pyramid with the Chief Executive Officer at the top. Now, organizational shapes span the entire spectrum from pyramid, matrix, clusters, and virtual, including:
- Core process. A common business wisdom is to focus on core processes and competencies or in other words, stick to your knitting. In this way, key process, team, and individual skills are developed that differentiate one company from another.
- Project. More companies are organized around projects or activities. Highly focused teams do a specific job and when the project is finished, the team disbands.
- Organism. The organic organization is the current hot idea. Michael Rothschild in Bionomics: Economy as Ecosystem and others describe teams, organizations, industries, and even Gaia earth as organisms. The Internet is a commonly cited example of an organic organization. What characterizes these organizational organisms? The organism merges, melds, and morphs to fit external requirements.
- Federalist structure. Charles Handy describes a structure of separate companies or individuals loosely clustered into a federation. The companies are grouped and matrixed around businesses, functions, regions or customers instead of the hierarchal pyramid.
- Ever changing organization. The Newtonian business model doesn’t fit well in today’s chaotic marketplace. It’s being questioned as change occurs so fast that organizations don’t have time to react to reestablish stability. The stable state is evolving to the current norm – the chaotic state. This has become the rationale for continual organizational transformations.
Life Lesson Earned: Companies are trying to figure out what’s the best structure for them. Is there one best structure? No. The key is a flexible structure. The most effective organizational structure is one that satisfies multiple stakeholders using the fewest resources.