Organizational Structure: Questions and Answers

Jun 11, 2007

It seems like hardly a week goes by that I don’t hear from a reader with a question or two about organizational structure. I thought perhaps I should put together a list of some typical questions on this topic and my answers to them:

  • “What is the best organizational structure for a firm in this business?” There is no single best organizational structure for an A/E/P or environmental consulting or related firm to have. If you are in the soils testing business, being organized around geographic office lines may be best. If you are a single-office MEP firm, being set up around disciplines may be best. If you are a full-service A/E/P firm that does large, complex clients, being organized around client types may be best. Every company and every situation is different and it takes a thorough understanding of all factors involved to determine the best structure.
  • “Should a firm be organized around the people it has or should the structure be based on what is best long-term, irrespective of the cast of characters involved now?” I used to think that you should figure out the best structure and then staff it, even if that meant everyone had to be changed. But I have learned that today, it’s just not possible. It’s too hard to find people and you cannot shut everything down to retool. You cannot throw away all of your key people. No firm can ignore the people it has now and put a new structure in place.
  • “Does structure really matter or is it academic?” It is not an academic exercise! This preconceived notion held by many design professionals has always bugged me. Structure is extremely important. How the firm markets, serves clients, and provides career opportunities for its people— all this and more are affected by the organizational structure being employed.
  • “Who should be responsible for quality?” It depends on the structure. Some people think only discipline leaders can do this. I disagree. The problem with discipline leaders is they too often have a background in a particular client or project type that distorts their sense of quality needed to do other projects or serve other client types. For example, if your mechanical department head has a health care project background, my best guess is that he or she will insist on overdesigning a system for a light industrial building. And if not overdesigning it, putting more detail than necessary in the plans. Vice versa applies, too— the discipline leader or department head with the light industrial background may not understand why a set of plans done for a hospital project requires a rooftop plan. I do think that the client-based unit leader (i.e., let’s say the director of health care services in this case) can be responsible for quality if he or she has the right background and the right staff.
  • “Who should be responsible for an employee’s development?” There is one simple answer— the employee’s immediate supervisor. The problem with the way many companies are structured in our business is that some employees have more than one supervisor. This is a fundamental flaw that must be corrected. In this situation, employees often get conflicting information about what the priorities are or what type of skill is most important to have.
  • “What’s better— having offices as profit centers or client-based units as profit centers?” See my response above. Though I am generally in favor of client-based structures, there are situations where offices serving as profit centers works best. These are typically situations where geographic knowledge drives the selection process or the production process. There are also situations where no resource sharing is needed between offices and in these cases having the offices as profit centers may make sense.
  • “What is a job description for the associate title?” There is no job description for associate as the term “associate” does not describe a job function. It is a status title, much like that of “vice president,” though in some firms, there is a contracting authority that goes along with status titles.
  • “What is the maximum number of people anyone should have directly reporting to them?” Again, I can’t give a hard-and-fast answer here. In general, the more educated and highly skilled employees you have, the fewer you should have as direct reports. On the other hand, if everyone who reports to you is highly competent, you should be able to manage a lot of people. The number varies from about 6 to 15, depending on the situation and the people involved.

Mark Zweig is Zweig Group's founder and chairman. Contact him at mzweig@zweiggroup.com.

Originally published 6/11/2007

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