S1E8 - Structure – Scaffold or Straightjacket?

Most org charts are built for control, not speed. In this episode of Leadership Matters, Glenn Price and Terry Reynolds dig into structure as the first execution driver – and why “restructure” shouldn’t automatically mean “someone’s losing their job”.

They explore how great leaders design structure after strategy (not around personalities and legacy boxes), why unclear decision rights kill momentum, and how to shorten the distance between customer insight and action. From post-it-note org charts and span of control, to matrix reporting and leaders with no technical background in their function, this conversation reframes structure as a scaffold that supports results, not a cage that slows them down.

If your structure makes simple things hard and slow things slower, this episode will hit uncomfortably close to home.

Transcript

Welcome to Leadership Matters, a podcast series created by Leadershape Consulting to help leaders take their vision and deliver results. My name is Glenn Price. I'm joined again by my business partner and co-host, Terry Reynolds. And before we start, we'd like to create a little bit of signpost about where we're up to. So earlier in our podcast series, we talked about the three drivers that sit in the first rational step of set direction. And that included vision and strategy and alignment.

And then for the last three podcasts, we've talked specifically about the second step, engage and excite, which is the emotional component. And there were three drivers there as well, experience, believability and desirability. And it's those first six drivers or first step of set direction and engage and excite that create the context for performance. But now we're dropping down into the six drivers that drive the results, the actual execution.

And so this podcast is all about taking a look at structure. know in the book we say structure should follow strategy, not strangle it. But this is the first step in the enable and execute back to rational drivers now. And we wanted to have a conversation specifically about strategy. And let's be honest, more structures are built right. As I think about structure, most structures are built for control, not for speed. Yeah, I think they're probably historical though, aren't they?

And that's part of the problem is that they're not built. What you've just said is that structure should follow strategy. What's often happening is realistically in organisations, they don't even look at structure. Well, they're inherited, aren't they? something, yes. Something's already existing there. And then it's a matter of just filling the boxes. So do you think, how many leaders have you got examples of over the last 20, 30 years who have created, developed, sculpted that ambition or vision or mission or purpose, right? That first step. Then come up with a strategy to get there and then truly ask themselves, how should we be structured to take the best advantage of that strategy, to remain competitive, enable us to move at pace? Well, very few, very few. I think that what moves against following a process and putting the strategy together and then building a structure to support that is that I think that there is a common belief that the more you play with structure, the more potentially that you may upset, spook the horses if you like, the team, because once they hear the word there's a restructure going on, I think they all have, rightly or wrongly, they immediately believe what that means is job losses.

And that's interesting, isn't it? Because one, that's probably the lived experience previously. So I can get with that. I think that's a human response. And yet restructure often, when done well, it's simply about making sure that the information flows in the right way, that systems and processes are designed to be seamless and frictionless for our customers, let alone for our team members to enable us to do a really good job.

I think that there is a bit of a structure myth there or structural change myth. So you said, hey, as soon as a restructure is announced, people tend to go, right, that means job loss. And yet I've got a couple of really great examples where organisations have reorganised themselves, truly fundamentally changed the way in which they're structured because it made sense to do so in the strategy. And they were able to explain those moves and the reason why.

will come to the people in the boxes, but they were able to take blank boxes and go, if we were to start this organization with that strategy right now on a fresh page, this is what it would look like. And I know some people felt really uncomfortable when they were doing that and went, wow, but that's going to those people were never geared that way. But if you take the people out and simply looked at organisational structure, it can absolutely create not only the ability for you to execute fast, but to create clear blue water between you and the competition, right? So it doesn't necessarily equal job loss, but we understand that we're going to need to deal with that conversation at some stage. Yeah, look, and I also think that we also need to be realistic around going just by drawing some different lines and boxes. It's not going to fix all the problems. If there are problems, it's not going to allow you to immediately execute on a strategy. It's going to support that. But if culture, clarity, capability and all those other types of things doesn't start to change as well, then performance won't change either. You know, just because I'm now reporting to you and not this person over here, et cetera, I think there's a number of moving parts with that. Well, there's almost that, you know, I've seen lots of leaders do this. I think we've been guilty of doing this in the past is that you place every person on a post-it note and there's different colored post-it notes for different departments and you put it up on a glass wall like it is today and you start moving it around, but it's got real people in there, not roles and competencies and different strengths that you want to play to. And so we would always say, design the structure, then work out who's got the right competencies for those new roles. And inevitably there's going to be some boxes that don't have names in them. And there's going to be a list of people that don't fit the newly formed structure that enables you to execute on that strategy. And that feels uncomfortable, right? Because these are great people. They just don't have the skill set for where you need to go. And if you can't change the people, then you need to change the people. Yeah, look, think restructures often happen because leaders generally aren't clear on purpose and priorities. I think there's an issue there. And they tend to confuse maybe rearranging with realigning.

And I think that that's a real problem. so what you're saying is that if the structure drifts away from the purpose, then actually they just end up juggling the boxes around, but it's not designed on purpose. No, I think the structure needs to literally amplify the strategy. It needs to bring it out. It needs to be able to, you know, put it onto steroids and not compensate for absence of something as such. One of the things that I love is when an organisation looks outside of its industry and goes, if we were a airline, how would we structure ourselves? If we were a call center, how would we structure ourselves? If we were a hotel group? I don't find that they do that. the one excuse I always get is, we should mirror the customer. Our structure should mirror, certainly in B2B or B2G, no, our structure needs to mirror the customer's structure. But what my hesitancy in doing that is what if it's really average, like the customers that we're serving, they haven't gone through this process and… You've got to ask the question whether they actually are looking too narrow in the vertical in which they play. Because, you know, we look at services type industries. It doesn't necessarily matter whether it's an airline or a retail outlet, but they're offering a service.

I think that's when you've got to be really broad around the structure. What's going to make it simple for the customer to buy, to purchase, to interact with you as the organisation as opposed to getting in the way. So I think we need to go very, very broad with our opinion of actually what we're trying to achieve, what we're trying to do as opposed to go we're an airline so we stick within an airline or we're a retail airline. Well yeah, what I was scared of is that, you know, that old command and control. you don't understand Glenn, our customer is very hierarchical.

So we must be hierarchical. Well, you can communicate in lots of different ways with different structures, but I don't think looking out going, hey, in the past, our people even have been very used to a command and control structure. gives them comfort. It's the world that they understand as opposed to truly challenging the status quo and going, how do we get agility and speed here? How do we make sure that the customer experience and the employee experience is seamless? It's frictional, or frictionless, I should say.

It's structure by design, not by default. Does that make sense? Yeah, yeah. And I think that, you know, you'll hear organisations use the throwaway line or, you know, customers are at the centre of everything we do. And then you look at the structure and you go, well, no, they mustn't be because the structure's not set up in a way that what your tagline is saying. It completely goes against it.

Do leaders underestimate how unclear decision making can paralyse progress, even in a well-designed org chart? Yeah, I think they totally underestimate it and to some degree that, you know, what we've got to be able to do is sometimes, you know, the people that are involved in that restructure, you need to involve a few other people, I think. The MD, the CEO … whoever's in charge or sitting at the top of that tree, may not be the only or the best person to be able to draw that structure together. would say they're the absolute wrong person. Right? In terms of setting the objective of why we're doing it, totally get you. But, you know, I've got an example just over the last couple of months. Large global organisation. Change of vision and ambition. Change of strategy.

And the CEO was bold enough to go, we're going to flip up this org structure. We're going to make sure that we're designed for agility and speed. We're going to match it and align it to our strategy. And what I loved about what they did is they set that goal, but then they got a broader range of people to actually take a look at how work really flows there. Who's signing off what, who's doing reviews on what. Because regardless of your org structure, somehow the work finds a way.

And what they found was that some people were working on spreadsheets, some people working on CRM systems, some people were going up and down floors, others would refuse to physically go and see that people aren't only worked through email, but as you mapped all of those processes, the actual right structure was there. They're almost producing results despite their organizational structure. And all the CEO did was empower a group of people to go, Hey, let's take a look at how we do work when we do it well, and then move the boxes around.

So it made that seamless and easy to do and therefore increased the level of desirability to do the new strategy that he had in mind. You know, it's funny, I remember many, many years ago working in a government department and I was consulting to this government department and I was doing job redesign, if you like. And I remember at the time reassessing a bunch of job descriptions because in the government you use this BIPERS method, you follow this evaluation, comes out at 80 points. 80 points means that you're a level four or whatever the case would be. And part of this was your reporting line and how many direct reports you had. And it started now, just as we're talking about this, I'm starting to think about, isn't it interesting, is that the way people are paid could sometimes be based on how many direct reports they have, where they report through. Now does that impact the way that structure is built? Because some people are going, you can't take them off me, I need as many direct reports as I possibly can because it's going to pump up the level and the senior oratory of the way that people deal with me in the organisation. And yet isn't that interesting, on our previous two podcasts we've talked about believability and desirability and the criticality of the leadership role to be human and have one-on-one conversation. And we talked about the fact that time gets in the way, right? Doing the work gets in the way. 

Richard Branson was once asked, how many direct reports should you have? And answered, shot back an answer incredibly fast in a heartbeat, right? And he just went 12 and the reporter went. Wow, that was incredibly fast. How did you come up with 12? And he just smiled and said, hey, it works for Jesus Christ works for me. 12. I've never been able to do 12. I'm not sure about you. I think the perfect number is probably about eight. If you're having me during a conversation, if you're doing it well, if if the leadership is rewarded and actually is valued, then that I think that makes a big difference. The other thing that we see with our best clients is we're beginning to see people put into very senior leadership roles. And as you say, with limit the amount of direct reports, with no technical capability in the department that they run. Now I didn't say chief financial officer, right? Obviously you need some numeric reasoning there. But we are seeing heads of sales, heads of research and design, right? Heads of customer experience with somebody that doesn't come from that industry and what it creates is this requirement for the leader to be incredibly curious within the structure that they've got. They're surrounded by the subject matter experts. So I didn't say that they're idiots, right? They're still decisive. They ask really great questions. They're constantly customer facing so that they can understand how we can reply to people's underserved needs and create great value propositions. But ultimately they have to trust their team. And so back to what we talked about before, because they have to give that level of autonomy and and mastery to those around them. Therefore, you couldn't get more than eight. But if you're truly dedicating yourself to those eight, then believability goes up, desirability goes up. You're not taking work off these people going, I know best because I'm the most senior person. And so we're beginning to see Australia catch up to where Europe and the US is with how we build structures to win. Hey, what are your thoughts about, you know, dual reporting lines?

You often see on In structure where I report to somebody locally and then I've got a dotted line, normally referred to, of somebody sitting in Europe or the States or whatever. I think if I was that individual reporting through two people becomes actually quite challenging. But I'm interested in your thoughts. Well, it certainly takes time. I think all of these things, know, matrixes, they work in a cycle and we're still in the cycle of a matrix organisation, certainly if you work for a globe.

Here's what I found when I had dual reporting lines is I worked with the leader that was closest to me for the majority of the time. And so I think if you, I believe in order to lead people, you need to be physically there. And so I would spend a lot of time on a plane and I would move around so that I could listen to customers and listen to team members. And I reported to my direct leaders, the ones that were closest to me.

I was a bit more mercenary. I just…I worked out who paid the bonus. And that's where I spent most of the time. Yeah. Look, I think what gets in the way of matrix, if I change your question, is not whether matrix works or not. That's been proven that it can work really well. It's the degree that you value, that you trust and you have this level of transparency with both of those people. And you understand that you're in a matrix not to collaborate and share the work. You're there to amplify the impact. That's the biggest difference for me. 

So here are some top tips for leaders how to build structure that enables and doesn't inhibit. One, start with purpose. You've talked about this, not people. So design your structure around what must be achieved, not necessarily around, as we said, personalities or tenure or how am I going to get Bob into the framework. 

Two. Clarified decision rights, quite quickly. People will freak out, you use the term, spook the horses. Every role should know what it can decide and what it must escalate and what it must consult on because that ambiguity is much more important and it kills energy and pace and momentum much more than the structure itself. 

Three, shorten the distance between decision and action. So the fewer layers between the customer insight, for example, and the actual execution of it, the faster the organisation moves. And then last of all, make sure that you're designing for connection and not control. And so we want you to encourage lateral collaboration or co-elevation, which we'll talk about, and we'll make silos impossible by design. People are having to work together, not because it makes logical sense, but because they want to. And that makes it a huge difference. we want structured, look, it needs to be there, but we want it to be a scaffold not a cage. want it to be able to help accelerate the results that you're looking for, give you competitive edge and to end this podcast with a challenge and a question if your structure vanished overnight, would people still know how to get work done?