A Molecular Organizational Structure 2.0
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The Molecular Organizational Structure consists of cross-functional business units where each discipline of business is represented and led by experts in that discipline. It is based on three principles: 1) business units are self-contained and can grow or shrink as needed, 2) there is a balance of influences from customers, labor, shareholders, and time, and 3) business disciplines lead decision-making over individual personalities. Each business unit represents the four influences and is self-managed. Disciplines standardize practices across units and have equal decision-making weight. This structure balances influences and counters the effects of strong personalities.
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A Molecular Organizational Structure 2.0
- 1. Mechanics of a Molecular Organizational Structure By J David Schreiber A MolecularOrganizational Structure consistof across functional categoryorproductfocusedbusiness unitswhere eachof the disciplinesof businessare representedandleadbythose disciplinesas necessary. The MolecularOrganizationalStructure isbased off three basicprinciples: Business units are self-contained and either multiply or diminish as necessary. There is a balance of the four influencers: Customer, Labor, Shareholder, and Time. The business discipline leads the decision-making process over the personality of the person in the roll. Self-contained Business Units A Molecular Organizational Structure is based on a self-contained business unit model. Each unit can operate independently on its own, however benefits from the collective synergies of the group. Business Units consist of 4 to 7 members with at least one member representing each of the 4 influencers. As the Business Unit grows and the work load is greater than the capacity of 7 members, a new business unit is created to handle the additional work. In the same manner if a business unit is no longer meeting its Key Performance Indicators KPIs then the unit is disbanded. Once there is more than one business unit, an executive unit is assigned. The executive unit will take leadership responsibility of the organization. In a young organization with only two or three business units the executive unit may continue to manage an assigned category or product-line in addition to its executive responsibilities. As units are growing a person may be represented on two or more teams depending on the work load of that discipline. Business units are self-managed, internally recruited (meaning all members must agree to work together), and set their own KPIs. This includes their financial metrics and compensation. Similar to a matrix organization each function or discipline of the team will partner and leverage best practices with similar disciplines from other teams. The executive team member of each discipline will not only share best practices, but the vision of the executive business unit. Executive team members will also insure there is a standardization of practice in their discipline among the other business units. A Balance of Influencers All organizations consist of four major influencers: The Customer, Labor, Shareholder, and Time. What if an organization could balance the needs of its influencers? Have mechanisms in place, so that as market share grows the right balance of labor is in place to respond. What if investors could see a ROI that was consistent and reliable? What if the calendar was managed well enough that the organization rarely had to respond with urgency?
- 2. Mechanics of a Molecular Organizational Structure By J David Schreiber By insuring each of the influencers are represented in the decision-making processes, an organization has the best chances of balancing the needs of each. A molecular organizational structure does this: First: Each business unit requires that at least one person (or business discipline) is representing one of the 4 influencers, the customer, labor, shareholder, and time. Second: Each business discipline will lead in their area of expertise. For example, the person leading the marketing discipline, will take the leadership role in areas of marketing and ensure the needs of the customer are met. Project managers will lead the calendar and ensure the influence of time is managed. (see discipline responsibility chart) Third: Each discipline will have equal weight in the decision-making process. Disciplines representing the shareholders for example will have no more influence than the operations or (labor) disciplines. Business Discipline over Personality Leadership It is only natural that stronger personalities will lead an organization in the direction of their interest. A product team for example, with a strong product engineer may lead a team to spend more time on perfecting the development of a product, even though the cost and the calendar would advise otherwise. A team with a strong project manager may influence a team to put a product on the market before all the testing is done or capacity is available to manufacture to meet calendar expectations. Personalities also tend to favor more like minded people on their teams. A very creative company for example will tend to ignore the minority of pragmatic leaders until urgency hits the organization such as a lack of funding or a failed deliverable. In an ideal world, each business discipline in a company would be led by a person with enough credibility in the discipline that all the other members of the organization would respect that leaders influence. Unfortunately, credibility takes time to establish and even then, it is hard to replicate in a growth environment. A molecular organizational structure (MOS) counter balances the influence of personality to some extent with structure. It provides more value to the discipline then the personality by allowing each roll veto power. Credibility is still required as in all leadership, however by placing a scoring structure into the decision-making process, the influence of the decision is more accountable. Increased accountability will lead to increased credibility, and there for better leadership.
- 3. Mechanics of a Molecular Organizational Structure By J David Schreiber MOS ORG CHART Business Team ProductA Team ProductB Team Product Development Finance Manager Supply Chain Manager Marketing Manager Logistics Business Manager Finance Manager Supply Chain Manager Marketing Manager Online Sales Project Management Finance Manager Manufacturing Manager Marketing Manager Product Development Business Manager Labor ShareholderTime Customer Product Development
- 4. Mechanics of a Molecular Organizational Structure By J David Schreiber Influencers and Discipline Examples Chart Labor Time Customer Shareholder Manufacturing Business Manager Marketing Finance Logistics Product Manager Product Design Accounting Fulfillment Admin On line Sales Asset Management Commercialization Program Manager Product Development Board of Directors