Traditional team structures have gone unchallenged for too long.
For those who’ve ever seen a pyramid-shaped organizational chart with the CEO at the highest and a cascade down through the ranks to frontline employees, then you already know the style of structure we’re talking about.
Like many business “rules,” this top-down hierarchical team structure has ancient origins and was codified in the course of the Industrial Revolution.
However the world – and work – has moved on. The “rules” are changing.
This raises some thorny questions. For instance, do traditional team structures still work in hybrid work models? How are you going to apply structure to distant employees working in several time zones? What’s leadership’s role in modern organizations?
In your seek for answers to those questions, each operational and existential, you’re prone to encounter a variety of opinions. Greater than just a few buzzy-sounding team structures, too, like “flatarchy” and “holacracy”.
To assist you sift through all the data on the market and discover the team structure that best meets your needs, we’ve collected insights and examples from high-performing teams.
We’ll also outline the best way to transform your team structure, manage employees effectively through the change, and construct an adaptable culture where structure enables excellence.
Table of Contents
The anatomy of effective teams
Only a heads up before we get too far: this isn’t going to be one in all those blogs that espouses the necessity to abandon structure altogether.
Structure is essential. It helps employees (and leaders) understand where they belong and the way their contributions matter.
For those who don’t define and design a team structure, one will form organically. That comes with risks you need to avoid, like dominant personalities overshadowing hard employees, or hybrid work schedules leaving employees feeling disconnected.
We’re not even suggesting that traditional team structures are irrelevant. Nonetheless, they’re typically too rigid for the complex challenges of managing distant employees, navigating globalized markets, and maintaining customer loyalty amid increasing competition.
Traditional top-down teams
That pyramid structure, with a single leader at the highest and layers of employees reporting upwards, is known as a “hierarchical” or “tall” structure. It thrived after the Industrial Revolution and was especially popular in large, bureaucratic organizations.
Listed below are some key characteristics of traditional top-down teams:
- Clear lines of authority: Decisions flowed from the highest down, with little room for worker input.
- Functional departments: Employees were grouped by specialized skills, creating silos and limiting cross-functional collaboration.
- Give attention to efficiency: The first goal was to maximise output, often on the expense of worker autonomy.
While the simplified, straightforward, chain-of-command model improved efficiency for traditional organizations (especially manufacturers), it imposes limitations on modern organizations. Namely, there’s little room for innovation, employees feel disengaged and demotivated, and the organization is slow to adapt.
Evolutions within the distant and hybrid era
The rise of technology, globalization, and the knowledge economy forced a shift in how teams operate. The restrictions of traditional structures became more apparent, paving the way in which for a brand new era of team structures.
These models are characterised by:
- Autonomy: Teams are more free to administer their work and make decisions.
- Emphasis on collaboration: Cross-functional teams and project-based work encourage collaboration across departments.
- Adaptability: Flexible structures and processes allow organizations to reply to market changes and take technological advancements in stride.
Removed from rendering traditional structures obsolete, the evolution has as a substitute highlighted the necessity to adapt and integrate latest practices.
Organizations are actually fusing elements of traditional hierarchies with the flexibleness of recent approaches as they transition to hybrid work schedules. There’s no rule against mixing team structures, and doing so can yield the most effective of each worlds.
Definition and descriptions for the ten common team structures
1. Functional team structure
Teams are organized based on their specific functions or roles. Think marketing, finance, product development or customer support.
This structure allows for specialised skill development and fosters deep knowledge inside departments but limits cross-functional collaboration.
2. Market-focused team structure
Teams are built around specific market segments or customer demographics, enabling teams to tailor their strategies and services to fulfill the unique needs of various customer groups.
This approach is tailor-made for organizations serving diverse markets, like a multinational using different strategies to have interaction customers in (for instance) France, Germany and the UK.
3. Product-focused team structure
On this structure, teams are organized around specific products or product lines. This permits for concentrated expertise and responsiveness to market trends, although being hyper-focused can limit the sphere of view.
Apple transitioned to this model under Tim Cook. Although Steve Jobs preferred a standard hierarchical model, the evolved product-focused structure gives department heads more independence. You simply need to have a look at Apple’s sky-high revenue and the modern products released under Cook’s leadership to see that it worked.
Elements of product-focused team structure are helpful for firms with a various range of products. Just be sure that to think about the shopper’s needs from every angle.
4. Process-based team structure
As you would possibly guess, this model focuses on optimizing workflows and processes. Teams are organized around specific end-to-end processes like R&D or customer acquisition fairly than dividing those responsibilities along functional lines.
This structure goals to optimize efficiency and quality by aligning employees’ efforts with the important thing processes for strengthening the organization’s value chain. It’s especially useful for firms focused on continuous improvement and operational excellence, although departmental siloes are common.
5. Matrix team structure
This more complex framework combines functional and project-based approaches to create cross-functional teams. Employees report back to multiple managers, typically a functional manager and a project or product manager.
It’s excellent for complex projects requiring input from various departments but often results in confusion about reporting lines and priorities.
Unless you’re Cisco. Facing rapidly increasing competition, and unable to adapt fast enough under a standard model, Cisco embraced a matrix-style cross-functional model that created “a bridge between siloed architecture experts and customer-facing staff in diverse groups across the corporate,” in response to a 2011 case study.
6. Agile team structure
Agile teams are cross-functional, self-organizing groups that work on projects briefly cycles or sprints. An iterative development cycle and continuous feedback allow for rapid adaptation to vary.
Agile team structures are particularly popular in software development and modern projects where speed and adaptability are critical. They’re less popular in relationship or service-focused organizations.
7. Circular team structure
A brand new twist on traditional hierarchies, circular team structures arrange teams in concentric circles around a central leadership point. This symbolizes the flow of knowledge from the core outward and back, aiming to boost communication and improve collaboration.
It’s particularly effective in flattening hierarchies and fostering a way of shared purpose, even though it may not scale for giant organizations.
8. Flat team structure
Now we get to the “flatarchy”, characterised by a minimalistic approach to hierarchy and management layers. Communication and collaboration thrive, decision-making is decentralized, and employees have more autonomy.
Netflix may be essentially the most famous example of what happens when flat team structures scale up. The undeniable fact that it’s not entirely flat is evidence that there’s rarely a clear-cut example of team structures within the wild; Netflix’s corporate HQ still calls the shots, and there are functional and geographical dividing lines.
Still, designing out management levels has evidently removed friction. Little doubt we have now this to thank for a glut of incredible original programming.
9. Network team structure
Arguably the most up-to-date team structure, a network model consists of an online of interconnected individuals and teams linked through technology, collaborations and shared goals.
Teams operate as independent hubs connected through central points for communication and coordination. This structure is adaptive and highly scalable. It’s also one of the vital suitable for managing distant employees or outsourcing some functions to external partners.
10. Bonus: the Holarchy
More thought experiment than team structure, holarchy is an organizational philosophy that emphasizes wholeness and autonomy. It views a company as a network of self-governing entities (holons) that collaborate and contribute to a bigger whole. Holons are concurrently a part of the system and fully formed individuals.
In practice, this looks like a combination of team structures inside a company. The engineering division might determine to be agile and HR might go for a market-focused structure, depending on their specific needs.
Designing your team structure
Organizations are available in all sizes and shapes. Understanding the differing types of team structures is useful for setting a framework, however the Netflix example illustrates the unlikeliness of any team fitting neatly into one category.
The perfect approach depends heavily in your organization’s unique DNA. Aspects like size, industry, company culture, hybrid work models and project scope all play a vital role.
Nonetheless, by understanding your specific needs and embracing flexibility, you possibly can design a structure that works – and, crucially, scales as your organization grows.
Assessing your needs
Before deciding on specific structures, analyze your organization’s current state, emerging challenges and future goals.
Listed below are some key questions to think about:
- What are our core values?
- What’s the dimensions and composition of our workforce (distant, in-office, hybrid)?
- What sorts of projects will we undertake (ongoing, short-term, complex)?
- What level of collaboration is required across departments?
- How will we measure success (efficiency, innovation, customer satisfaction)?
Answering these questions can assist you clearly understand your priorities. Then, you possibly can start sketching out a structure that aligns with strategic objectives, supports team capabilities, and acknowledges resourcing realities.
Constructing flexibility in team structures
The undeniable fact that we’re even talking about team structures proves that whatever structure works today will need adjustments in the longer term. Five years ago, you likely didn’t expect to be managing distant employees. Now, that’s roughly the norm.
Constructing flexibility into your team structure enables your organization to adapt when things inevitably change again.
- Embrace a hybrid approach. Don’t be afraid to mix elements from different structures, for instance, constructing agile cross-functional project teams from functional departments.
- Empower self-organizing teams. Give teams the autonomy to define roles, responsibilities and workflows organically inside a broader framework.
- Put money into communication tools. Facilitate seamless collaboration between distant and in-office team members through technology. For instance, Time Doctor gives team leaders complete visibility to trace the work being done and manage distant employees effectively, irrespective of where or after they work.
- Repeatedly review and adapt. Schedule regular check-ins to evaluate the effectiveness of your structure and make adjustments as needed.
By prioritizing flexibility, you ensure your team structure is resilient and adaptable – which is mission-critical given how briskly the world is changing.
Technology’s role within the transformation
Technology plays a vital role in maximizing the effectiveness of team structures, particularly in hybrid work environments.
Listed below are just a few ways to reconsider technology as an worker empowerment tool:
- Project management tools enable agile and self-organizing team structures, with the power to trace progress and improve collaboration.
- Communication platforms facilitate real-time communication, knowledge sharing and virtual meetings, shrinking the space between hybrid and distant employees.
- Cloud storage solutions ensure everyone has access to the most recent information, no matter location – and it’s secure.
- Workforce analytics gives managers peace of mind that the fitting work is being done, while employees gain tools to self-manage hybrid work schedules and autonomy to make use of their time on strategic tasks.
- Integrated SaaS solutions improve the flow of knowledge between and inside teams, improving collaboration and reducing double handling.
The common characteristic of all these tech enablers is integration. Individual “holons” might need their specialty software, but effective organizations find opportunities to attach and centralize data used to make strategic decisions.
Common team structure mistakes and the best way to avoid them
Even with the most effective intentions, organizations can fall prey to common pitfalls when designing team structures. Whether it’s resistance to vary, communication breakdowns, conflicting priorities or an absence of strategic clarity, you could look ahead to the signs of those weak points, or the entire structure could crumble.
One-size-fits-all mentality
Forcing a single structure across the complete organization can stifle innovation and collaboration.
Flexibility is the answer. That begins with constructing in flexibility as we discussed above.
Your role here doesn’t end once the structures are in place. Repeatedly assess how things are working and be prepared to make adjustments as circumstances evolve.
Lack of clarity
Confusion about ownership, accountability, roles and responsibilities can result in inefficiency and frustration.
Document ownership and accountability for every team and worker, and make clear the link to strategic targets. Make this information accessible and be sure that people know where to seek out it.
Poor communication
Information silos and an absence of transparency can hinder collaboration and decision-making. Mockingly, that is each a standard reason for rethinking team structures and a standard pitfall of the reorganization process.
Establish clear communication channels and encourage open information sharing. Transparency throughout the design and reorganization process helps employees feel like they’re involved fairly than being shuffled by an invisible hand.
Ignoring the human element
Neglecting worker preferences and work styles can result in disengagement and low morale.
Seek worker input to make sure the structure aligns with their needs and preferences. If not, analyze their feedback to seek out an answer. Start that process from day one and proceed with no end in sight.
Let’s break the foundations together
We imagine every organization needs the fitting tools to construct team structures that work for them. By fastidiously considering your organization’s unique needs, challenges and capabilities, you possibly can design a structure that permits your team to thrive. Not only today but tomorrow and 10 years from now.
We encourage you to bend the “rules” of team structure to fit your requirements. Just be careful for the pitfalls, particularly the prospect for workers’ voices to get drowned out.
And remember: while flexibility and agility are necessary, structures don’t stay standing for long without maintenance.
That’s where we are available in.
Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.