Every organization has a defined structure that includes a hierarchy of who reports to whom and the responsibilities of each role within that structure. That formal structure is defined by the hierarchical boundaries. All that looks good on paper, but in reality, every efficient organization also has an informal structure comprised of relationships, hand-offs, and processes. Those cross-boundary interfaces between different parts of an organization are called linkages: mechanisms that identify how individuals and departments within an organization work together outside of the established formal structure.
When you build an organization structure, many of the formal boundaries created are organic and appropriate. But when there’s an over-reliance on the formal boxes and lines in an organization’s structure instead of on identifying and building linkages, it can be a challenge to get decisions made, allocate resources, or align on priorities and action.
For example, suppose a sales manager needs an additional salesperson. In most large companies, the human resources (HR) department is charged with hiring all new employees. The sales manager has a limited role in the recruiting and hiring process other than conducting final interviews and making the final hiring decision. The sales manager has to trust another part of the organization—in this case HR—to conduct a series of essential activities to ensure they hire the best salesperson. To do that, HR needs to create linkages with the sales manager to facilitate the definition of the hiring profile, coordinate recruiting, organize interviews, and facilitate final candidate selection. The more effectively this is enabled, the better the decisions that can be made about talent, and the more effective the sales manager will be in delivering for the organization. Of course, most HR or talent acquisition teams have established these linkages, but hiring managers everywhere have experienced situations where linkages as simple as these broke down or were inadequate for helping work get done across the organization.
Encouraging leaders to examine where linkages could help their organizations be more successful is a key aspect of every design. Here are three steps to start that process:
- Identify the most crucial areas within the organization that don’t naturally mesh and for which a formal linkage could be helpful.
- Ask yourself: What mechanism can I put in place that will make these different parts of the organization work effectively together?
- Monitor the linkages and adjust as needed.
Each organization is unique; there is no one-size-fits-all design template for developing the formal (boxes, lines, roles, etc.) or the informal structure (linkages, decision rights, etc.). When the sharing of information or resources is fairly simple or ad hoc, linkages can remain informal because there’s not a lot to orchestrate or coordinate. In more complex situations, a formal linkage may be required, such as when key business decisions need to be made, more information or analysis is required, resources need to be allocated using a thorough prioritization approach, or cross-organization input is needed.
Let’s use IT as an example. Everybody always seems to be frustrated with IT, from executives to employees—they don’t understand why the technician doesn’t immediately come when they have a problem; when they do show up, they take too long to fix the problem; the department costs too much; project takes too long—and the list of complaints goes on. What often needs to happen is establishing a process for prioritizing IT’s tasks, so people are less frustrated and so those in IT don’t feel like they’re the bad guy in every situation. Decisions need to be made about what the company is and isn’t going to spend money on. There also needs to be service level agreements for when and how quickly users can expect support. Take the issue of setting priorities for IT; there are different ways that could be accomplished, such as setting up a council to review IT investment requests and prioritize them based on the needs of the business. Many voices, including those in IT, can be heard in the council, and then decisions can be made that everyone involved understands and accepts.
In a smaller, less complex organization, linkages are easier to facilitate, and it often happens organically. In a big company with huge departments and multinational offices, people often don’t know who has expertise in specific tasks or where to go for information or decisions, so linkages become an integral consideration in organization design. By taking the time to plan the linkages, you can avoid wasting resources and energy trying to constantly adjust your formal structure to deal with what could easily be addressed through your company’s informal structure.