Organizational structure is the foundation for how people communicate, collaborate and perform on the job and affects overall performance of the company.

Most people talk about organizational cultural as being one of the key principles of creating a great company but structure is equally important. Culture is a function and reflection of the structure.

Leading companies use the customer’s voice to align the organization, foster teamwork and create products that meet the customer needs.  Most have adopted a matrix structure and assigned people from functional departments to cross functional teams responsible for managing products and/or services.  Moving more expertise to the front lines gives the product managers and/or general managers respectively the timely support needed to solve problems, develop solutions, create new products or processes and enhance service that meets the needs of their customers.

Many companies operate with a weak matrix structure meaning the company is structured according to function [aka: functional silos] rather blending resources from the different functions into cross functional teams.  A functional structure helps develop expertise, systems and processes needed to enable staff do a specific job well, but are weak structures for promoting collaboration and enhancing customer focus. In fact, functional structures are thought to tilt the organization away from the customer which is never a good thing.

Granted there are challenges with every organizational structure and matrix structures are no different.  Studies of cross functional teams have reported that 75% are dysfunctional.  Getting people to work together is no easy task.  However, there are a few learnings from leading companies that can help make cross functional teams more successful in any organization.

People: Functional managers need to assign people who have the knowledge and experience to contribute to the cross functional team and the people assigned need to be open to working with others that think differently than them.

Support: Functional managers need to support the cross functional teams and evolve their method of monitoring, developing and supporting their people working outside the department.

Rewards: Functional managers need to be rewarded for supporting the cross functional team and the success of the team.  Broader metrics that reflect the company goals should be more heavily weighted in their compensation structure.

Developing an organizational structure is not a one and done type of exercise. Structures need to evolve to help the organization outperform in good times and be resilient to changes in the economy, industry and technology.

The changes underway in healthcare are a good example. With healthcare becoming more consumer focused, healthcare provider organizations should be adopting a matrix structure of cross functional teams to support and develop their service lines. The main role of a service line manager is to help build the business – similar to a Product Manager or General Manager in other industries. Speaking from my own experience working as an interim Service Line Manager for a prominent teaching hospital, few have the direct support needed.  Most have to manage from the middle with influence as their main method to get the information and resources needed to do their jobs well.  Granted influencing others is an essential skill for any manager but influence alone can limit management effectiveness especially in a weak matrix structure.

Structural changes should also be made to help employees be more efficient and productive with their time so that they have time off from work to live healthy, happy lives. If people are routinely working more than 8 hour days, is it a function of the culture, structure or their job? It would pay to find out.

“Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.”

– Peter Drucker

About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success.  She is also the founder and CEO of Hello Workout.