Is It Time to Completely Reconsider Your Organizational Structure?

Business.com / Strategy / Last Modified: February 22, 2017

Business conditions constantly evolve, but how do you know if it's time to consider a re-org? Here are some clues and what to do.

Breaking up may be hard to do, but companies are increasingly finding better ways to enhance the value of different lines of business for investors, shareholders, and customers. According to The Wall Street Journal, corporations around the world have divested approximately $1.6 trillion of subsidiaries this year, after a decade of research that indicates that on average, large conglomerates underperform smaller, nimbler companies.

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While your small business may not be on the same scale as Hewlett- Packard or eBay, both of which recently announced significant restructurings, an effective organizational structure is just as critical. Unfortunately, as The Harvard Business Review blog points out, as companies grow and strive to meet new challenges, what frequently gets left behind is a serious consideration of a proper organizational structure that both fits how people are working and that allows them to work better.

How do you know if it's time to reconsider your organizational structure? And how do you decide what changes to make? Here are six things you may want to consider.

1. How Has Your Business Changed?

Examples of business changes include:

  • Entering new markets
  • Developing new products
  • Opening new sales channels
  • Entering into new partnerships

2. How Has Your Organizational Structure Changed (If It Has) to Address Changes in Your Business?

Even if you don't have a formal organizational structure with official management titles, someone is doing customer service, someone is handling partner relationships, and someone is managing sales. Are any of these functions stressed as a result of new business developments, or are there are any needs that are going unaddressed?

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3. Talk to Your Team

Ask your people about their problems, issues, and frustrations. What would make their jobs easier? What do they view as future opportunities? Ask them to come up with solutions to whatever they identify.

4. Share Ideas Among All Employees

The more your employees feel part of the process, the more likely they will become active participants in any new process. Moreover, you need to identify synergies between groups -- as well as potential conflicts. The whole is always greater than its parts.

5. Develop a Plan With Your Key People

Gain consensus, wherever possible. Sometimes, however, not everyone will get what he or she wants. While, ultimately, you as the small business owner gets the final say, it's a good idea to carefully weigh all options presented (and to explain exactly why you arrive at the conclusions you do).

6. Implement, Measure, and Adjust

Even the best ideas sometimes fail to anticipate actual operational conditions. Get feedback on what's working and what isn't. Make the appropriate adjustments. Then, in a couple of years when your business has grown and changed, take another look at your organization's structure and how it might need to adjust.

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