When businesses first express an interest in business growth consulting, they want to find strategies to help them build revenue and achieve new business heights. They often uncover problems in the cornerstone of their business: their business structure. Understanding how the construction of your business impacts operations can help you improve your operations and leverage the best system to power your growth.
We will explore what you need to know about the organizational structure so that you can begin evaluating your business.
The Situation Businesses Interested in Growth Consultancy Face
Before we dive into the different structural compositions you have available, it can help to examine the issues that currently impact professional organizational systems.
Attrition rates have continued through the pandemic and remain elevated, with high rates impacting the ability of businesses to hold on to their talent and provide that stability in their organization.
Additionally, we continue to see higher rates of remote delivery and remote working. While these two options grew tremendously in popularity during the pandemic, their usage has continued even after restrictions began to lessen.
Depending on your industry, you may also still see a softer demand. With lower demand rates, you will see an impact on your industry utilization and profitability. Similarly, technology has begun to play a dominant role in the delivery of products, which also impacts how businesses organize their companies and the types of positions they have available.
Finally, we see an overall shift towards business models that are subscription or recurring-revenue based.
Want to give your business a digital edge? Learn more about the Canada Digital Adoption Program.
The Complications Growing Businesses Face
As you consider the best structure for your business, you may face a few challenges. In particular, growth strategy consulting professionals have found that many companies still operate within a pre-pandemic system that has not considered new trends, making it hard to scale growth.
Finding ways to rectify this problem can have a noticeable impact.
Why organizational structure is vital for professional services organizations
Here are just some of the reasons why you want to pay attention to your organizational setup. It:
Provides role clarity, defining roles and responsibilities for each position
Provides a clear framework for sharing information
Creates precise lines of accountability
Provides a framework for measuring performance through KPIs
Creates expectations for each consulting role
Improves overall company performance in terms of profit and revenue
Considerations for Designing a New Organization
Now that you know why you want to focus resources on actively determining your organizational structure, let’s consider what you want to keep in mind throughout the process.
Step 1: Consider what your business looks like and the services you offer. Are you more procedural-based or consulting-based? What is the scope and complexity of your services and operations?
Step 2: Examine your internal processes. How are decisions made within the organization? How much autonomy is given to employees versus how involved is the senior management? How do you maintain accountability? How is information shared across the organization? How will you attract and retain talent? For the last question, consider factors such as mentoring, leadership coaching, and professional development,
Step 3: Qualify who you market to and the industries you serve. Note your clients' particular needs and important factors like location, how you can cater to them, and how this market
impacts your growth potential. Consider whether you plan on expanding in the future and how you manage relationships with your clients.
Step 4: Consider the technical setup of your business. Note how you use technology and its role within your organization. Remember the specialized systems you need and how they support your operation.
Step 5: Consider your current and desired organizational culture; determine the type of culture you think will support your business objectives.
Does your business have a strong growth structure?
Types of Structures That Work in Professional Services
As you work with your growth consultant to analyze the factors that will impact your professional services structure, let's look at the main organizational strategies you may elect to capitalize on.
Functional Structure
This organizes employees based on their expertise with clear lines of authority. Employees focus on their knowledge areas but may end up in silos.
Divisional Structure
These organizations divide employees based on criteria such as customer segment or geography. Each component operates separately, which can promote a customer-centric approach.
Matrix structure
These companies combine functional and divisional options described above by grouping employees based on their competencies and factors such as customer segment.
Network structure
With a network setup, the business works with several external, independent professionals and experts for better scalability.
Team-based structure
This system breaks employees into small teams that manage themselves and are responsible for a given project.
Hybrid structure
This setup combines elements from various systems outlined above based on the business' unique needs.
How To Get Started With Organizational Structure Planning
You need 2 key components to get started with your organizational planning.
Functional accountability
The first is to determine functional accountability throughout the organization. Go through each function in your business and determine who owns it, the P&L or balance sheet items that go with it, and 1 or 2 KPIs that measure the success related to that function.
Role scorecards
Secondly, you will need to define the scorecards for all roles. The scorecard should describe the role's mission, the accountabilities for the position, the metrics used to evaluate the work, and the competencies needed to succeed.
Using all this information can help you construct a business structure to help your organization leverage the opportunities in modern business trends.
Get Started With a Business Growth Consultant
If you are ready to start reorganizing your business structure, book a consultation now. We can help you evaluate your current setup, determine your business needs, and guide you through implementation.
Gord Smith, holds an MBA in Strategic Planning from the University of Windsor and has over 30 years of experience driving revenue growth for small businesses in Canada and the United States. He is the founder of ALTA Consulting, and holds certifications as a Scaling Up Coach, CPSA Certified Sales Leader, and RAIN Group Consulting Partner.
