Organizational Design

The CEO Project Podcast

In this episode of The Lazy CEO podcast, host Jim Schleckser discusses organizational design for mid to large-sized companies. He emphasizes that there is no perfect structure and that the key question is what inefficiencies or problems one is willing to tolerate in a particular structure. Reorganizing too frequently can be detrimental to organizational performance, as it disrupts stability and takes time for teams to readjust and perform. Jim suggests using reorganization as an occasional tool when the current structure no longer delivers value or desired results.

He explains that structure should follow strategy, meaning the organization's structure should align with its strategic goals. Different strategies, such as cost focus, customer intimacy, or innovation, require different organizational structures. The organizational design should elevate critical processes that drive competitive advantage while less important processes can be minimized. The importance of roles should be based on their relevance to the company's success. Jim advises considering talent-driven approaches and ensuring that high-potential employees have room to develop and take on important positions. Middle management is crucial for organizations with around 50 to 400 employees to coordinate work and facilitate progress.

Jim also discusses the impact of reorganization on social networks, power dynamics, and influence within an organization. Reorganization can disrupt these relationships, affecting leaders' effectiveness and performance. He advises being cautious about reorganizing and emphasizes that no structure is perfect, but occasional changes can provide different forms of optimization and improved outcomes.

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