There are many different types of organisations, each with an organisational structure. Every structure has its own merits, and implications on leadership, and innovation.
Some are great for innovation whereas others are not.
It’s possible to find a hybrid approach, by combining structures, although certain structures simply do not work together. A mismatch. The trick is to marry suitable parts.
Company structure influences innovation performance.
Different structures can achieve very different results, but it’s only part of the picture that affects innovation. Other factors include culture, diversity, and behaviours. Although structure does have a significant influence.
This article will discuss various organisational structures.
Knowing fundamental organisational structures and the potential impact on innovation is key. It enables leaders to create an environment where innovation can flourish.
Let’s walk through each.
These are rigid organisations. Employees have specialised roles and specific tasks. Relevant training, incentives, and rewards are designed for each role.
There are rules for almost everything, and people are not always honest with their boss. They behave as if the rules work, even when they don’t, so rarely do anything new. They complete tasks in isolation from overall objectives.
Mechanical impedes creativity.
These are the opposite of mechanical. They’re more fluid and teams collaborate towards an overall goal. Everyone contributes.
Roles and tasks are reinvented, redefined, and adjusted as required. Decisions are made collectively, in groups, by those best qualified for the task at hand. Employees are valued and rewarded based on their contributions.
Organics’ are highly creative, a key ingredient for innovation.
These are organised around one person. The owner or founder. This is good for innovation as decisions lead to rapid action as individuals simply need to influence one person to ensure that their ideas come to light.
The disadvantage is that all employees are dependent on the views, opinions, and availability of that one person. The business owner. Poor decisions can continue unchallenged or important decisions overlooked.
Although if the founder has the right leadership qualities, breakthrough innovations are quite likely.
A decentralised structure due to the profession of workers it employs, which are harder to manage, like a law firm or an architectural practice.
The problem for innovation is that each professional or team specialises in a certain field. These specialty verticals go against the communication and fluid collaboration that innovation needs.
Built for efficiency. This type of company hires experienced managers who bring more rules to meet the needs of bigger deals to grow sales.
Everything is organised like an assembly line.
Managers in this structure don’t believe in the need for new ideas and ignore anything that interrupts efficiency, dispelling the ideas of their people.
This approach arrests experimentation, creativity, so innovation stalls.
Can be organic and decentralised. The cogs in this type of organisation are empowered to make their own decisions. Each focuses on innovating to meet local demands, ignoring a centralised cross-functional approach.
As a result, learning is diminished and opportunities are missed.
A flexible, “adaptable and informal form of organisation that is defined by a lack of formal structure.” It’s the opposite of bureaucracy. “The term was first popularised in 1970 by Alvin Toffler, and has since become often used in the theory of management of organisations.”
Mintzberg further developed the adhocracy concept.
Adhocracy is characterised by a creative, “integrative behaviour based on non-permanence and spontaneity. It is believed that these characteristics allow adhocracy to respond faster than traditional bureaucratic organisations, while being more open to new ideas.”
The advantage is that employees learn quickly so adapt and innovate rapidly.
While it’s good to understand the limitations of known structures, it’s even more important to design structures to cultivate innovation.
Most companies lie somewhere between two extremes. Mechanical organisations succeed if market conditions are predictable and stable.
In contrast, if market conditions are unpredictable, unstable, and fast-moving, organic organisations thrive. The same applies to across teams.
It’s possible for organic and mechanical structures to co-exist at the one organisation.
The best approach is to carve the best parts of various structures and merge so that the advantages of one structure compensate for weaknesses in another.
There is no one right way, no one-size-fits-all, but testing and adopting different structures is the essence of innovation. – Ilumination (Online)