Making The Most of Your Team

Making the Most
of Your Team

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Organization Structure

Why care about the organization’s structure?
• Our work depends entirely on our people, so our
organizational structure defines our operational model
• An effective organizational structures contributes to our
successfully accomplishing both our most audacious
strategic goals and rote business functions
• It should express our firm’s culture, enable
communications, assist in the flow of information, and
promote accountability



Strategy and Structure

Strategy and Structure
Change in strategy
requires a change in
structure Structural
Reorientation

Structure dictates how
objectives & policies are
Structure dictates established
resource allocation

• Structural reorientation will not make a bad strategy good or elevate
poor leaders and managers to a level required for success.
• Strategies should be achievable. If the strategy requires massive or
complicated organizational changes, that strategy should be
reconsidered.



Common Organizational Concerns

These issues often inspire firms to reorganize:
• Role confusion
• Multiple or conflicting roles
• Locus of control and accountability
• Concentration of power
• Match between size and type
• Role and leadership development
• Expediency vs. strategy
• Scalability and sustainability



Enhancing Organizational Clarity

• Roles and responsibilities
• Individual and team accountability
• Interactions and interrelations
• How things get done
• Communications linkages
• Flow of information
• Career path options and opportunities



Guiding Principles

• It’s better to be organized than not
• It’s better to have a right one than a wrong one
• Structures can and should change, evolve
• What do clients see, believe, want, care about?
• There’s not just one right answer
• Structure helps, but doesn’t solve, all the firm’s
problems… In fact, all structures create problems



“How do I get a copy of the org chart?”

• It’s a secret.
• Why do you need it?
• It’s not written down.
• We have one….we do?
• It just causes trouble.
• I really hate this stuff.



Common A/E Organization Types

• Geographic
• Functional
• Studio
• Client/Market
• Matrix
• Hybrid



Geographic

Executive Leadership

Managing Director Managing Director Managing Director
New York New Jersey Asia

Project Manager Project Manager

• Creates very clearly defined organizational boundaries and
reinforces those boundaries in the most effective way possible
• Can generate internal competition and cultural dissonance
• Inhibits the movement of expertise across the firm, can prove
problematic if all locations do not provide all services
• Clients might see firm as smaller if only familiar with one location



Functional


Vice President Vice President Vice President
Architecture Interior Design Planning


• Most common form of professional organization, highest comfort
level for design professionals
• Groups professionals together maximizing opportunities for
professional development
• Focuses market on offerings of single services
• Inhibits workflow across functions



Studio

Executive
Leadership

Studio Leader Studio Leader Studio Leader

Director Director Director Director
Design Planning Production Interiors

• Creates dynamic, multidisciplinary teams that can respond to
diverse challenges
• Clients do not see consistent dedication to project types, markets, or
disciplines
• Constant shifts in project type can create management challenges
with regard to scheduling and assigning resources



Client/Market Organization


Residential Development Commercial Development Institutional


• Presents a clear message to the marketplace, defining clients
served
• Promotes the development of client expertise throughout the
organization
• Makes some professionals uncomfortable as working for similar
clients can inhibit the development of technical breadth



Matrix Organization


Vice President Vice President
Operations Civil Engineering

Project Manager Project Manager Senior Civil Senior Civil
Residential Commercial Engineer Engineer

• Overlays one organization (usually Market/Client or Geographic)
onto a Functional organization
• Provides for professionals’ remaining in groups while promoting
focused project management
• Solves some of the challenges inherent in the Functional
organization at the expense of accountability



Hybrid Organization

Executive
Leadership

Managing Director Managing Director
Managing Director Managing Director
Residential Commercial
Institutional Survey
Development Development

Director
Director Director Director Director
Museums and
Jordan Egypt UAE and Asia Schools
Higher Ed

• Organizes units according to what works best for given markets,
leverage models, and professional behaviors
• Captures some strengths of several of the models, but also
weaknesses
• Lack of a consistent model can create cultural challenges and even
management issues



Ease of Workflow

Ideal Workflow

Typical Workflow

Dysfunctional Workflow



Market Clarity

Client Perspective
• Work consistently with the same leaders and similar
teams
• Understand how to navigate the firm
• Know what the firm offers
• Experience consistency
Internal Perspective
• Teams develop client expertise
• Services associated with client needs
• Different strengths deployed to serve different clients



Cultural Clarity

Structure Supports:
• The mission of the firm
• Characteristics that the firm values
• Appropriately steep (or gentle) vertical relationships –
the kind of hierarchy the firm wants
• Movement up through the levels of the firm
• Roles that team members understand and respect



Managerial Clarity

Communication

Intelligence
• Works in all directions
• Team members know where
they need to go to get
information they need
• Information from clients and
Collaboration from managers reaches team
members to facilitate
Dissemination

implementation
• Managers can make decisions
based on reliable data



Managerial Clarity

Chains of Responsibility and

Accountable to…
Accountability: Principals
• Principals: Responsible for Firm,
accountable to clients and
stakeholders
• Senior Managers: Responsible for Senior
Others and becoming responsible Managers
for Firm
• Managers: Responsible for Self

Responsible for…
and becoming responsible for
Managers
Others
• Team Members: Becoming
responsible for Self
Team
Members



Financial Clarity

• Facilitates managerial accounting practices (e.g.
assignment of costs and revenues to units, allocation of
overhead)
• Necessitates little in the way of internal transfers of funds
• Creates economically sound units… Ones based on the
realities of business
• Aligns financial incentives with cultural and managerial
connections



Evaluating the Models

Ease of Market Cultural Managerial Financial
Structure
Workflow Clarity Clarity Clarity Clarity

Geographic ? - ? ++ ++

Functional - - ++ - --

Project ++ - ? -- +
Client/
Market
+ ++ - ++ ++

Matrix ? - + - -

Hybrid + - -- + +



Centralized Corporate Functions

Executive
Leadership

Managing Director Managing Director Vice President
Vice President
Residential Commercial Finance and
Marketing
Development Development Administration

Director
Director Director Director Director Director
Information
Los Angeles San Francisco Pacific NW Accounting Human Resources
Technology

• Coexists as a separate organization
• Marketing typically reports to Executive Leadership
• Other Corporate Functions usually grouped into an administrative
unit
• As finding and retaining exceptional team members becomes more
of a priority, more HR units report directly to executive leadership



Distributed Corporate Functions

Executive
Leadership

West Palm Orlando Tampa

Office Manager Project Manager Project Manager

• Most common in Geographic organizations
• Exchanges high level competence and experience for more support
level team members
• Depends heavily on the functional capabilities of design
professionals within the organization



Choosing an Appropriate Structure

• So what is the answer? What is the right one?

For most AE firms, we recommend the Market/Client
structure…
• Why? It scores high in both Market Clarity and Ease of
Workflow

All organization structures create challenges!



Market Focused Organization

• Focused on delivering expertise and experience to
specific types of clients
• Better understanding of the client industries, strategies,
business context
• Operational improvement as teams mature
• Highlights focus, even at expense of efficiency or
discipline consistency
• Key to differentiation in a mature industry context


Organizational Levels

Shareholders

Board of Directors


Operations Team
(Functions/Geographies/Projects/Markets)



Each Level Has a Mission

• Shareholders – Lead the firm by electing a Board of
Directors
• Board of Directors – Hire/Fire Executive Leadership, set
compensation for Executive Leadership, address issues
of ownership (serve as stewards for the Shareholders)
• Executive Leadership – Develop and execute long term
and annual strategies, lead and manage the Operations
Team
• Operations Team – Accomplish day to day activities



Not Just Organizing People

• Strategy and planning
• Core systems and processes
• Project management/operations
• Communications architecture
• Information and knowledge
• Culture



Changing (Improving) the Structure

• Strategy comes first, then structure.
• Be realistic about the effort and time (6-12 months)
required.
• Obtain broad stakeholder input.
• Create the structure first, w/o filling in the boxes.
• Realize there will be winners and losers.
• Monitor re-evaluate, and adjust ongoing.
• Separate people (performance) from structure
• Use the incubator model – a learning laboratory.
• Consider the clients, again and again.



Strategic Planning

• What will the structure look like, or need
to look like, in the future?

• The organizational structure undergoes succession and
transformation, just as do the names in the boxes.



Answers
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