Two Critical Things To Consider When Restructuring Your Company
Two Critical Things To Consider When Restructuring Your Company
“I’m thinking of restructuring my company”. That’s one of the statements I often hear.
Restructuring the company typically involves significant changes in roles, responsibilities, and reporting lines to name a few. This can be met with resistance from employees who are comfortable with the existing structure and processes.
There are different organisational structure examples, some of them focused on Functions, others designed around Products, or Divisions, and even more complex Matrix-based designs. However, those organisational structures have one thing in common, they are designed to optimise a specific objective driven by the company customers’ expectations and value chain.
You’re probably thinking, “So, which one is the right organisational structure design for me?”. To help you design the organisational structure optimised to meet your needs, consider the following questions:
- How can a better company structure make it easier for delegation?
- How can we accelerate decision-making to better service our customers?
- How everyone in the company can contribute to the company value chain?
- How our new structure can help drive priorities every quarter?
One of our clients, a tech company in Australia, noticed some decisions were taking longer than expected, ending up with the CEO having to be involved in most conversations and getting in the way of better servicing their clients. As they continued to hire and onboard new people this challenge was poised to escalate.
During my conversation with the CEO, the need to restructure the company came up, so we uncovered the challenges they were facing and the two critical things to consider to design an optimised structure tailored to their needs.
Critical thing #1 – Consider your Core Customer’s Needs
As we mapped and analysed the Job To Be Done with Customers, we listed customer attributes and then prioritised them based on what customers value the most.
Below is an example of the top 3 (tweaked to protect the name of the company) example of the top 3 (tweaked to protect the name of the company)
Critical thing #2 – Map how Functions interact in your value chain
To map the different Functions in the value chain, we needed to consider how the company makes money. Then start mapping those money-making Functions, and other supporting Functions.
The result was something like the image below:
When we overlaid the Customers’ expectations and the end-to-end value chain, four different “Value Functions” emerged. Each Value Function had a clear responsibility in servicing either their customers or their employees.
Forming Value Functions
Whilst initially there was no need to change role names or reporting lines, we noticed every single existing role could be mapped to a Value Function, making it easier to communicate expectations and how their efforts impacted the company’s end-to-end value chain.
When it was communicated to the wider teams, the CEO drew something like the below on the whiteboard.
Customer acquisition and onboarding: This Value Function brought together people with Marketing and Sales skills, and a shared set of results in line with their customers’ expectations, such as new customers and customer onboarding turnaround time.
Innovation and Value delivery: This Value Function brought together the Product teams, including designers and engineers to deliver on the product promise. In addition to the product functionality, customer retention was a key result of this Value Function.
Customer Success: This Value Function was formed by teams such as Customer Support, and Training; focusing on rapid response and playing a key role in the customer retention result.
Employee enablement: This Value Function included people from HR, Legal, Accounting, and Admin. One of their responsibilities was to provide the necessary data and measures to the other Value Functions so they could make better and faster decisions.
Having considered the Core Customer’s needs and the end-to-end value chain made it easier to delegate responsibilities, decision making, and to create a habit of accountability. Below is an example of the Value Functions’ responsibilities and measures.
As mid-market companies continue to grow, cross-functional collaboration becomes essential, streamlining decision-making and avoiding bottlenecks.
To learn more about how you too can design your company to optimise the right results, please contact us.
