Insights

Do people follow structure or does structure follow people?

Anuj Roy, Longhouse Consulting

One question that we have constantly faced in our experience of working closely with a host of early stage organizations in the last 4 years is whether one should create and define organizational structure and then look for people or let the entrepreneurial bunch of leaders come in and help shape the structure of the organization. The topic has not only been debated by leaders in early stage organizations but has also gone through significant academic research.

Jack Welch was a proponent of ‘strategy follows people’ philosophy and used to get involved in selection and promotion of his senior executive team. He was of the firm belief that the key people will be responsible to shape the strategy of the organization and will help define and execute the plan. The structure of the organization would also evolve as the strategy gets implemented.

Some of the entrepreneurs we have worked with, also look at getting the best and brightest irrespective of the current organizational structure with the belief that the appropriate structure can be created for the right individuals. The working of this model is contingent on multiple factors including the ability of the individual as well as the organization to assimilate and accept the changes.

One of the common points of discussion for us with the investors and entrepreneurs is, at what stage in the lifecycle of the organization should one create a well-defined structure and get people as per the set structure. In their entrepreneurial journey the founders/founding team often look for the right individual who can add value to the set-up and then they go ahead and create the right structure for him/her to join the organization. As the organization matures with more professionals joining the founding team, the need to shift to a more defined structure becomes imperative as it leads to lesser chaos and discourages any turbulence in the set-up. The human resources team encourages a well-defined set-up as the organization scales up, since the challenges in mid size and large organizations are completely different from the early stages of the entrepreneurial journey.

Is there a time in the lifecycle of the organization when structure should define the type people to recruit? This is something which is still being widely debated and needs to be answered. We have seen organizations taking a variety of approaches with varied success and failures. The approach towards executive search tends to change in these situations and a flexible approach, which at times can be iterative in nature, is required as decisions would often have a strategic impact on the overall organizational performance.


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