I often work with emerging companies , organizations that have survived the initial growing pains of a start-up, have sustained profitability, and now are considering what’s the next level of development. There are several questions that these companies must address as they consider what continued success will look like:
1. What are the specific business results that you want to attain and by when , and is everyone in the company committed to those results and clear on what it will take to achieve them?
2. How do you expand the business without losing sight of the things that worked well up to this point , like great customer support or high levels of responsiveness?
3. Do you have a strong pipeline of developing leaders who can take the business to the next step?
4. What changes in the organization’s structure are necessary to sustain growth?
What I find is that companies tend to do is focus on question 4 before they’ve addressed question 1. Without a commitment to a set of results on the part of the key members of the organization, answering the remaining questions will not have a context. For example, the result some seek is to be able to take the business to a point where it becomes an attractive acquisition for a larger entity; others may want to focus only on sustainable growth rates. Clarity and commitment around results then makes it easier to answer the remaining questions.
Finally, remember that intended results drive decisions about the appropriate organization structure; in other words, we organize around a purpose. And every organization is perfectly organized to get the results it gets!
John: I just read The Tipping Point by Malcolm Gladwell, that discusses the concept that people organize themselves in units of 150 or less. He uses the example of Gore Industries (makers of Gore-Tex products), who open new plants when the number of people across all functions in one plant gets to 150. He also uses the example of Hutterite communities who split when their membership reaches 150. Apparently, at or over 150 people units, a person can’t keep all the relationships between people straight, and thus the sense of community is lost.
Any thoughts on how this relates to the intended results an organization might want?
Thanks for the comment, Kelly. Malcolm Gladwell’s premise limiting the size of organizations is perfectly consistent with my concept of organizing around a purpose. Once an organization is clear about its purpose, there are many structural options that will ultimately determine how the organization will choose to organize itself. Size of the organization is one of those options. And there is nothing magical about “the rule of 150 , it works for the two example you cited , Worthington Steel limits the size of operating units to 400. The key point is that each of these organizations , Gore, the Hutterite community, and Worthington Steel made purposeful decisions about what each does and then organized the entity accordingly.