Functional Structure…Forget It!

By | March 10, 2016

What is the shift…functional to a “network of teams?”

In a recent Forbes article, Josh Bersin suggests that today’s digital world of work has shifted organizational structure from the traditional functional hierarchy to a “network of teams.” Bersin refers to a recent Deloitte study of people challenges in business in coming to this conclusion. According to the study, the #1 issue for leaders is on a redesign of their organizational structure to meet the demands of the workforce in today’s business environment.

This shift is causing us to redesign job roles and position descriptions; re-think career development; embrace skills and learning as the keys to performance; look at different ways to set goals and reward people; and re-design the role of leaders.

According to the research, which identifies the top ten human capital trends for 2016, the key issues of employee engagement, culture and innovation, faced by companies today are connected directly to this new way working. The research reveals that the #1 trend of the year is “redesigning the way we work.”


Why Now?

The research tells that only 38% of companies use a functional design. Most businesses already operate in sales teams, retail stores, service teams, and geographically independent teams. Uber is a well-known example of this “new” model. Each area manager is responsible for its local operation.

Today’s organization causes us to rethink the leadership strategy, focus on culture and engagement, collaborate with staff on organizational learning opportunities, and deliver digital tools to support information sharing to help them work together well.

We could think of this as an “in and out approach.” Projects and programs are initiated to bring people with the requisite skills and abilities together to build and implement the solution. Following implementation, many of them return to their base roles or to the next project or program.

What are the keys to success in a network of teams?

  1. Shared values and culture. In geographically dispersed teams where they are closer to customers, guidelines and value systems are provided by the company to help them decide what to do, how to make decisions, and how to behave.
  2. Transparent goals and projects. Clear goals and financial objectives that are communicated clearly are integral for people operating in teams and small groups to help them work with other teams.
  3. Feedback and a free flow of information. Information about what’s working well and what isn’t working well must flow freely if teams are to operate and interact with customers interact effectively on behalf of the company. Support for the local teams and team leadership takes place in digital forums with access to real time analytics and feedback systems. Annual engagement surveys and performance reviews are not part of this new way. Today’s workforce demands open and transparent feedback, digital information, and a focus on an open and inclusive culture.
  4. The reward system is based on skills and contribution, not position. People are rewarded for their contributions rather than their position. Positional leadership is a thing of the past. Today’s workforce is focused on career growth and an alignment to their skills, values, and overall contribution to the company.


What does this really mean for organizations today?

A demanding younger workforce and a global economy requires rapid business innovation. There is no time for the traditional organization charts, position descriptions, and performance appraisals. The career path of yesterday is being reinvented, redesigned, or simply left in the past.

In my experience, a functional team structure takes too long to implement. A “team” concept is the foundation of how we as people naturally operate…so why not “keep it simple!”

Do you agree?

As a Project Management Professional (PMP) and Prosci Change Management Practitioner with ten years experience, I would love to hear from you…please leave a question or comment! Here is a link to my profile.

Stay tuned for my next blog as I look at some of the top trends in organizational design…



Previous Post: What is Change?

5 thoughts on “Functional Structure…Forget It!

  1. Pingback: Organizational Design Transformation – Top 10 Trends | How To Lead Organizational Change Today

  2. Dave

    The content on the website is written well and gramatically correct. It is a bit indepth and the post on Organizational Design was written in a factual style and not as conversational as I would of liked. I found it to be a bit too factual for me as I like reading blods and articles that are directed to the reader in an engaging manner rather than just speaking out some facts. However, the content was well written. It just didn’t hold my interest. The pictures were relevant and the author appears to have accurate knowledge of the topic.

    1. admin

      Dave, this is great feedback…thank you for your thoughtful comments. I will certainly adapt my future content as you have suggested.


  3. Cathy

    Interesting read about the changing workplace leadership dynamics. As a “millennial” working with a teammates from all generations I can see the dynamic differences. The team approach creates a more fulfilling work environment. I’ll have to check out your reading recommendations. Do you recommend one over the other to read first?

    1. admin

      Cathy, I really appreciate your comments and your perspective as a millennial! My recommended reading list, in order would be: Leading Change, Switch, Making Sense of Change Management, Magic, the Boundaryless Organization. In your organization, how would you describe your organizational design?

      Thank you!



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