Establishing a team structure able to flex and evolve to accommodate your future hiring strategy, company goals and vision is challenging. Teams have to knit together to realise their full potential, the set up will impact on relationships made, how people communicate, which stakeholders they have exposure to, their ability to influence decisions made and of course employee retention rates.
Common team structures seen include:
- Flat (Horizontal)
- Hierarchy (Pyramid)
- Matrix (Grid)
Flat structures are typically seen within the SME environment and by nature allow people more freedom to have breadth of exposure, contribute and make decisions, which can be more empowering. Decisions can typically be made quicker as there are less layers to cut through for sign off however retention can be negatively impacted due to the lack of complexity.
Layers shaped as a pyramid, the higher you climb the layers, the fewer opportunities there are. This structure requires strong leaders with the ability to empower the team beneath them, steering their ideas. Everyone has a clear understanding of who is in charge and reporting lines are clear, roles are often graded with transparent earning potential. The advantage to this structure is for those wanting visibility of their potential career path and an opportunity to work their way up the ranks. It can however be detrimental in organisations where a large % of the team reach their next step at a similar time and the opportunities just aren’t there, causing demotivation and potentially an external move.
This is the typical big company structure, grouping people together from different functions and assigned to different projects with multiple reporting lines and cross pollination. Different groups of people pool their strengths depending upon their skill set and build relationships with others from different teams across the organisation thus improving internal knowledge and relationships. This is commonly seen in larger, international organisations. Differing views and leadership styles can be experienced, reporting lines can become blurred, and communication has to be managed well.
It is fair to say that a ‘scale up’ business will have more freedom to create a fluid structure compared to a large group. Creating a brand-new role will be a very different experience to replacing a leaver within a more established team structure. However, this could be a prime opportunity to review existing team members, their roles, responsibilities, and reporting lines? For example, giving a team member who is showing leadership potential the opportunity to manage a direct report will fulfil not only the individual’s development aspirations and improve retention, but it can also give the overall team leader extra bandwidth to focus on strategy and business opportunities. When people consider a new opportunity, the positioning of the role within the team structure will be a key factor so taking this into account it is important vacant spaces are not just replaced like for like.
It is inevitable that people will sometimes leave your business due to the structure not aligning to their personal goals or ways of working. The Pyramid structure can leak ambitious people pushing at an equivalent rate as their peers when there simply isn’t room for them but if this may be an acceptable part of the strategic succession plan. Some will move on, craving a simpler, flatter structure in an SME environment when they have potentially outgrown a complex matrix set up and want broader exposure to the decision-making with less hoops to jump through. On the other hand, some people outgrow the flat structure within a smaller structure, seeking a higher level of complexity with exposure to multi-functional teams, processes, geographies, and projects.