Aim
The aim of this module is to:
- understand different types of organisational structures
- think about which structures may be good for your business area.
Objectives
By the end of this module, you’ll:
- understand different organisational structures that you may want to use for your business area in the future
- know the pros and cons of a structure and when it should be used.
Activities in this module
Activity 1: POLISM framework
POLISM stands for:
- Process
- Organisation
- Location
- Information systems
- Suppliers
- Management.
It’s a tool that may help you review an organisation’s structure.
How to do this activity
Use the:
POLISM framework template (PowerPoint, 1.1MB)
Answer the following questions for each element of the POLISM framework to inform your decisions around structure:
Process
What are the steps in the process we’ll use to deliver value to our users?
The strategy map exercise in Discover: Module 5 – map your value chain can help you identify your process steps.
Organisation
- What is the best structure to deliver your services/product to your customers?
You’ll work more on this question in Activity 2: organisation structures.
Location
- Where does it make sense for your workforce to be located?
- Should we consider hybrid or flexible working?
- What ratio of work can be delivered remotely vs on site?
- Are co-working spaces desirable?
- How accessible are work locations?
- What policies or strategies will we need for our location, such as regional development?
- What assets or systems (such as IT) are available?
- What health and safety issues do we need to think about?
Information systems
- What technology will our organisation need to deliver our work?
- What information do we need for our team to work well?
- Who needs and distributes our data?
- Where do we get our information from?
- Is it easy to get our data – can you access it from one or multiple places?
- Is the data of high quality?
- Do we need to invest in other IT infrastructure?
Suppliers
- What internal and external suppliers will we need to support our work?
- Which activities and processes do we deliver internally or externally?
- Who are our internal suppliers or subject matter experts?
- Who are our external suppliers or subject matter experts?
- Which roles manage or own these relationships?
Management
- Which management processes will we need to deliver work, such as planning, budget, performance management and so on?
- What examples of decisions do we need to make, such as procurement?
- Which decisions need escalation or endorsement?
- Do we have or need a dedicated governance function?
- What differences do we need to think about, such as approvals for business as usual versus surge approvals?
Activity 2: Organisational structures
In this activity, you’ll look at 4 types of organisational structures to decide which one works for your business area.
These are the 4 structure types:
Functional structure
This structure:
- is organised by process or activity
- creates consistency and efficient delivery in a team
- is effective in the delivery of limited products or services.
It can present challenges when:
- employees focus on their own goals, which may lead them to disconnect from the organisation’s purpose
- customers or users are different and have varied needs.
See the evaluating structure templates for more information.
Divisional structure
This structure:
- is organised by customer types, sometimes called customer segments
- helps a team be more responsive and tailor their services to their customers
- can promote employee mobility across divisions leading to more career development opportunities.
It can present challenges:
- inefficiency as a result of duplication of work between divisions
- when competing priorities arise.
Matrix structure
This structure:
- is organised by both process and customer segments
- commonly has employees managed by more than one manager, for example a project manager and a functional manager
- can be good when coordinating across many different parts of an organisation
- allows for collaboration and flexibility
- can provide career development opportunities to employees who work across both project and functional areas, like the divisional structure.
It can present challenges:
- as it can be complex and expensive to maintain
- when competing priorities exist across management.
To avoid confusion or competing demands, clearly define roles.
Agile structure
This structure is organised by competencies and project outcomes, often called tribes.
Teams within the tribes are called squads.
Squads are responsible for the end-to-end delivery of their work and are made up of people with different skills, such as marketing, user experience, data analysis and so on. Each squad has a product owner who is responsible for what the squad does and sets priorities.
Chapters sit across teams and are made up of people from the same discipline or technical skills, such as data analytics. A chapter is responsible for how the job is done and skills development
In an agile structure people will sit within a Squad and also a Chapter.
This structure:
- is non-hierarchical where individuals are empowered to make decisions to get things done quickly
- has employees often complete work in short activity cycles called sprints
- sees products and services released in phases for user testing and feedback to inform ongoing product development and service improvements.
- encourages innovation
- is useful when you need to focus on speed and adaptability.
It can present the following challenges:
- lack of documentation and processes can mean teams get side-tracked
- the high levels of collaboration required can be hard to maintain in the long term.
For more information, see the:
Evaluating structure template (PowerPoint, 1.2MB)
How to do this activity
To do this activity, you’ll need:
Evaluating structure template (PowerPoint, 1.2MB)
Step 1: Identify and map your future functions
Using the process and systems on your strategy map as a prompt, list the functions you need in the future for your business area.
A function is the core process or set of activities carried out by the business area. For example, finance, marketing or customer service.
Map your future functions against each structure type using the Evaluating structures templates.
Use these questions to guide discussion:
- what roles may sit under each function?
- how can you organise our functions in each structure?
- when would we adopt each structure?
- what may we need to consider before we adopt each structure?
Step 2: Rate each structure
Use the sliding scale in the template to rate your structure against each of the structure orientations.
Step 3: Consider when you’d adopt each structure
Consider the structure orientations to identify if the structure is suitable for your team and under what circumstances you may adopt the structure.
Discuss the potential drawbacks and benefits of each structure for your team.
For example, positive culture, skills and career development, customer responsiveness and so on.
How to run this module as a workshop
Design: module 3 workshop slides, facilitator guide and speaking notes (PowerPoint, 1.2MB)
Workshop facilitator tips for this module
If you run this as a workshop:
- be mindful that discussions around change can make people nervous
- remember your current structure may still be the best for your team but this is an opportunity to review it in line with your strategy map from the discover phase
- keep the session high level by focusing on functions and not on individual roles – you don’t need these details at this stage
- think if you want to use an online survey tool in or prior to the workshop to understand what organisational elements are important to your team.
Workshop timeframes
POLISM activity: 1 hour
Run workshop: 2 hours
Analyse workshop outputs: 1 to 2 hours
Total: up to 5 hours