Should we organize around the delivery of products or along the structure of our organization? Which organizational paradigm is the most effective or efficient?
This is a question that most managers struggle with regularly. At least when they are asked to "re-organize" their respective organizations.
In Europe (and I suspect elsewhere) this has led to a huge growth in what I would call Hybrid organizations. Also known as "Matrix organizations". These are organizations where managers try to blend delivery-focused (project) organizations with hierarchical-focused organizations (the line organization).
Which organization is better?Just this week I had an argument with a colleague about this. Which of this organizational paradigms is better? It is my view that both of these options, actually all three (if you count the matrix organization) represent a fundamental lack of understanding of how knowledge work happens and how it gets done.
The Hierarchy-focused organization is based on the principles that we need to have someone to "manage" the worker. As if the worker herself would not be able to make decisions about allocation of resources or conflict resolution without the contribution of a higher manager.
The Project-focused organization is based on a similar principle, the principle that the worker cannot make execution-relevant decisions herself. For example, which piece of work to do first, or where to get some necessary information.
The Matrix organization may be based on both of these ideas, i.e., that the worker cannot do any type of decisions herself...
I believe these principles (and the associated practices) are wrong. I believe that we can have organizations that are focused on delivering concrete products / services to the customers without having to have any of these layers to "manage the work and the worker".
Why should we have Project Managers and other interesting arguments...My colleague was arguing that we don't need Project Managers in an organization because they don't deliver anything. "They are overhead that produces no value outside coordination" he said. Sure, I can buy that, but what do line managers do that cannot be classified in the same way? The answer is nothing. Line manager's work is mostly overhead as well. They don't - on their own - deliver anything to the end customer, and do mostly coordination work (for example: coordination of performance reviews).
So the question is: If we believe that Project Managers "add no value" to a knowledge organization, why do we have line managers?
What do you think would be my colleagues answer to that question?Photo credit: miuenski @ flickr