The Peter Principle is Undefeated. Also, Why There is No Org Structure Best Practice
I've always thought there was almost no such thing as an org "best practice". Show me an organization that's working, and I'll show you a few dynamic leaders who are stretching and learning. You could have the same org structure with the wrong people just falling apart. Ultimately, if you are trying to fix major problems quickly, sometimes it becomes time to change organization and people at the same time.
What questions should you ask to improve your organizational design?
On the "improving things" side of org design:
1 - Are your very best people working on your hardest problems? (This is always one of my top questions when staring at an organizational chart.)
2 - Does every important metric have a clear organizational owner that represents a strong individual/team?
3 - What bet is your organizational design making? (Hint: it's usually a bet on a few key individuals' growth)
What are the common pitfalls to avoid in organizational design?
On the "preventing problems" size of org design:
1 - Have some parts of your org stopped reinventing themselves? What is their incentive to change how things have historically been done?
2 - How long has everyone been in their current seats? Sometimes a key function can change quickly in the span of 5-7 years. If leadership wants to keep things comfortable, you could miss something your competition is taking advantage of.
3 - Have certain team members been promoted past their competency? The Peter Principle is undefeated.
4 - Do you have important team leaders who may not know what good looks like in their area of control?
How does the Peter Principle affect a company's success?
Especially when a company is struggling, oftentimes the folks who tend to stick around want clarity and certainty. The movers and shakers departed for a healthier org long ago. The only people left are the people who know where the bodies are buried (and are often doing hero work just to keep the lights on). Rarely are these the people who are ready to turn a business upside down and start fresh if a new approach is needed.
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