Running Your Business

Organizational Restructuring: Should Your Company Consider One?

  • Many companies are switching from a traditional top-down management system to a lattice organization

  • The lattice structure works well for some companies, but not well for others

  • Before you go through the trouble to reorganize, decide if it's really for you

Read More
Posted by October 31, 2017

Many companies have gone through an organizational restructuring, where a traditional top-down management structure with a strict hierarchy is switched out in favor of something that more resembles a lattice. In a lattice (or horizontal) organization, employees may not have one direct supervisor; instead, they have connections and responsibilities that span departments and lines.

Should you make this switch in your business? If so, how? Here are a few points to consider before taking action.

Is It Really for You?

The lattice structure works well for some companies, but not well for others. Before you go through the trouble of reorganizing, think about why you need to do this. Do people often function across departmental lines, or is everyone pretty well siloed? It can be a difficult task to make this kind of organizational restructuring work, so make sure it’s what is best for your business.

Ensure Lines Are Clear

A common scenario in a lattice organization is for marketing team members to report not only to the head of marketing but to the product manager for the product they work on. This makes a lot of sense, but would it cause your flexibility to suffer? Everyone needs to know where their reporting lines are and what is expected—but if your staff often helps each other out, consider how that is going to look for reporting. Does Jane report to Product Manager A and Product Manager B because she works on both products? And what happens when John goes on vacation and Jane takes over Product C for a week? These situations will happen, so be prepared.

Decide Who Has Hire/Fire Authority

In hierarchical companies, the boss has the authority to hire and fire employees, usually with approval from their boss. It’s pretty clear. But, in a lattice organization, you can have input from several different departments. When Group A wants to fire Jane, but Group B thinks she should stay, how will you sort that out? Decide before you implement the structure.

Let Your Staff Have Input

When you are deciding on your new structure, get input from all levels. It can be self-defeating to announce a lattice structure on which the senior team worked alone. You may think you understand what the line employees do all day and what structure makes sense, but you may be surprised what you learn when you ask. So, ask.

Focus groups, one-on-ones or even surveys—depending on your company size—are necessary to learn about the horizontal relationships that already exist in your company. This will greatly reduce disruption when you implement the new structure. People will end up where they naturally belong, instead of landing in strange places.

Communicate Clearly

Don’t just say, “We’re doing this.” Try leading with, “As you know, we’ve been working on this for a long time and we’ve taken everyone’s input into consideration, so our new structure is [this].” Then, explain why this will be successful for your organization and what you hope to achieve with the changes. If you cannot articulate what benefits you expect to experience with the change, it’s probably not the time to change yet.

Lattice organizations can result in better communication across departments—and that is great for any business. If you’re ready to reorganize your company’s structure, make sure to thoroughly think things through, act in a logical fashion and communicate clearly.

You may also like