The Critical Role of Organisational Structure in Effective Decision Making

What happens when you sit twelve owner-managers, in a hierarchical fashion, in a room, separated by screens, don’t allow them to talk to one another and task them with solving a puzzle that they all hold part of the answer to?

Well, let’s see…

As part of the BIG Network session on The Foundations of Success in Working Together we raised the question: how should we design our organisations? To explore this question we structured an exercise that enabled participants to experience, and explore the role structure plays in creating organisational environments where people can work well together and achieve success.

Setting up the exercise

The exercise [1] was simple enough; the participants could only communicate by written messages, and the leaders were given a task which required collaboration, throughout the whole system, for a solution to be found.

Two groups (i.e. organisations) of five people were split into three role areas that would be typically found in an organisation:

  • Leader (x1)
  • Middle Manager (x1)
  • Employees (x3)

And we also had two observers, and two messengers to deliver the written communications.

Interestingly, the two groups approached the set-up of the activity differently, with one consulting how to apportion roles, and the other choosing a more individualised, ad hoc approach.

What happened – an overview of individual and systemic response

To begin with, the leaders started considering the problem and everyone else sat reasonably still, however, before long boredom and frustration led to the employee groups taking some action.

After a while, notes from employees started to surface with the middle managers “why are we waiting?” “what is the issue?” and, not long after, notes from the leaders started to be fed down to the middle manager. The middle manager started scribbling notes in response to the enquiries coming from in from both directions however, more notes kept coming in. The middle manager frantically tried to get the notes ordered so responses could be drafted; however they received more notes until…

One of the middle managers announced their resignation! Both managers by this point had a mountain of notes to deal with. Of the employees, some were passing the time by writing playful notes, some had resigned themselves to a pleasant daydream, and for others the sense of frustration and boredom was palpable.

One group achieved the task (which happened to be the group who discussed roles at the beginning) while the other progressed for a further 5 minutes and finally time was called. We then debriefed what had happened, how and why.

Observations – in the shoes of the leader, the manager and the employee

In debriefing the exercise a range of observations were made, these were:

  • A lesson in how not to organise: it was noted that the traditional pyramid hierarchy in which the teams were organised was a great demonstration in how not to set up a business for this particular task and people directly related to the experiences of themselves and others through the process.
  • In the shoes of the Leader: Leaders spoke of feeling detached, unnerved and concerned at the huge amount of work they saw piling up for middle managers. The leader of the unsuccessful organisation froze, and held onto critical information, while the other leader shared information. Both leaders spoke of contemplating, and not always being clear at the time, how to best support the middle manager.
  •  In the shoes of the Middle Manager: Middle managers spoke of the huge and unmanageable amount of data they had flowing into them and the difficulty they had in prioritising and making sense of the inflow of information, whilst also having to send out directions and questions to the rest of their group. Some participants could appreciate that they, in their current ‘real’ organisational roles, were playing the role of the middle managers, whilst others noticed how vital the role of the middle manager was in their organisation, helping them to retain a more strategic role.
  • In the shoes of employees: The employees talked of how frustrating the waiting was, with one saying they held off for as long as possible before having to write a note, just because the isolation was so overwhelming. The difference in the emotional experience between two of the employees; one who could see what was going on and one who was facing the wall was an interesting example of how some knowledge of what is going on, as opposed to none, has a big impact on experiences of inclusion and involvement with the participant who could see out feeling much more relaxed throughout the whole process.

On reflection, all participants agreed the task could have been done better, the team organised better and yet, the whole thing was eerily reminiscent of organisational life. Sometimes confused, often lacking in clarity and even, at times, chaotic, stressful and not a place we wanted to be. However, success was possible, planning and preparation seemed to be a part of enabling that success however, it was clear that whenever multiple data flows through a single source, things get messy!

The literature – what it says and how this informs our understanding

What the literature tells us is that strategy and structure need to work together, to be as aligned as possible to allow for effective decision making, communication and all round optimum performance. Simply ‘restructuring’ can cause more harm than good, however, designing organisations to allow for the critical decisions to be made in the most effective manner and by the right people does lead to organisational improvements, growth and success [2].

Smart companies create structures that mesh individuals’ capabilities with the organisation’s decision-making demands and they also invest as needed to ensure that people have the skills required to be better decision makers over time.

So the question is not necessarily; “do we need to restructure”, rather it is, “how could we be structured to optimise communication, awareness and decision making?”

Working this out, or continuing to explore this, is a strategic imperative for leaders; and not one with simple answers! However, having people literally or metaphorically sitting facing the wall is definitely not part of the answer.

Make a Difference (MAD) challenge from this section: In reading this section, we would ask that you reflect on the following questions:

  • How do communications play out in our organisations and when is this most, and least, helpful?
  • How are your structures currently enabling or inhibiting decision making?
  • How can we best make, the best decisions?
  • What are the roles that are required to get the most out of the people in our organisations?
  • What is your role? What should it be? How can you change/adapt to what the organisation needs?

To read the introductory blog that forms part of this series on “The Foundations of Success in Working Together” click here.

For further information on the BIG Network or any of the Business, Improvement and Growth (BIG) programmes for ambitious owner-managers, and their teams, please get in touch with Simon on 01227 824740 or S.O.Raby@kent.ac.uk

[1] The exercise was adapted from a team exercise experienced through a FIRO-B Qualifying Programme provided by OPP, to model the way control plays out through a traditional organisational hierarchy.

[2] Blenko, M.W., Mankins, M.C. and Rogers, P. 2010. The Decision-Driven Organization: forget the org chart the secret is to focus on decisions, not structure, Harvard Business Review, June

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