A template for Good Structure
Last updated
Last updated
Here is the structure I recommend as a basic template. (However, as I have already said, it must be customized for every company’s unique goals and resources and current phase in the corporate life cycle.)
Eager to enhance your knowledge of management dynamics? Take the first step towards a deeper understanding by contacting us today here!
To emphasize the critical driving role for each task, I have listed only one (PAEI) role for each. By now you should understand that the other roles must also be present, at least at a threshold level of competence. There cannot be any dashes in the code of a good manager. In fact, it is much better if two roles are performed well; thus marketing should ideally be (PaEi), sales (PAei), and new product development engineering should be (PaEi).
I have oversimplified the chart above to put one point into sharp relief: To have the diversity of styles necessary for a complementary team, you must also have a complementary structure that nourishes diversity. The reward structure should be different too, but before we get there, let’s talk about how to organize small start-up companies that cannot afford many vice presidents.
In a small company managed by its founder, there will probably be a salesman to do the selling or help the founder do the selling, so the (P) role in client interface can be delegated. But who decides what to (P)roduce, which market to go after, how much to charge, and how to promote – “product, place, price, promotion,” the famous “four Ps” of marketing? The founder decides, of course.
The founder might hire someone to supervise (P)roduction or assembly or operations – but who decides what technology should be used, where to locate the plant, how big the industrial park will be? Again, the founder.
What about finance? Even if the company has a vice president for finance – even if he is called the CFO – who really decides whether to take loans, what kind of loans, and what amount? Who woos investors? Once again, it is the founder, the CEO.
If there is a human resources department, it might also have a vice president; however, this person is usually one level above a secretary and would not normally attend the executive committee meetings. As to human resources development, it probably does not exist.
How would this structure look?
As you can see, the (E) role is monopolized by the founder or CEO of a start-up company.
The danger, which I call “Founders trap,” is that when the founder leaves or dies, the company’s (E) dies with him – and the ill experience seizure.
The various techniques for structuring a company so complementary teams can emerge and be nourished could fill several books. At the Institute, we have hundreds of pages of manuals on how to build a complementary structure in order to get a complementary team, and then even more pages and manuals on how to (I)ntegrate the team – since, by definition, the styles of the team members will be different from each other, and these differences will inevitably lead to conflict, which can become destructive. In the next chapter, I will discuss a few techniques for fitting a manager’s personal style to a particular task; and creating a complementary team from the disparate talents of your staff.
