Whenever a big business fails, we often hear about problems with their organizational structure. It’s a similar story almost every time: The organization grew so big, and as it got big, it grew more complex. It became unmanageable, and turned into a bunch of rival departments that competed against each other for resources and attention, instead of working together.
To maintain and encourage growth, on the other hand, requires a clear and simple organizational structure. It doesn’t matter whether the business is large or small. What is more important is for everyone to understand the different parts of the organization and how they are connected. It should not be a mystery known only to a handful of people in positions of authority—making those individuals, incidentally, indispensable to the business regardless of their contributions.
A simple structure will also help maintain trust between all the different parts of your business. Because everyone understands what is happening in other areas of the business, and how those parts relate to one another, team members can take a big picture view at all times. When things grow overly complex and isolated, distrust spreads between the different corners of the organization, who neither understand what the others are doing nor how those actions relate to their own tasks.
Sometimes, less is more, and simplicity both provides stability to team members and offers a guide to action when making important decisions. An important advantage of simplicity is that it encourages collaboration, instead of boxing individuals into independent departments. Collaboration is an important driver of growth, encouraging new ideas and solutions that might not come up on their own.
In addition to encouraging a relatively simple organizational structure, it is also important to leave room for innovation that comes from collaboration. There should be enough flexibility for individuals to work together and combine their insights and thinking into something new—and beneficial for the overall organization.
A simple organization is more conducive to growth. To keep your business on the path for growth, keep a firm grasp on your organization’s structure and hierarchy to prevent things from growing out of control.