Structure is important to the donor experience in the sense that in architecture, “form follows function”. When you know why something needs to be done and where you are going, you can align resources to better meet the needs of donors. The kind of structure you have does make a difference.
It is particularly critical to middle managers in the mid to large size nonprofit. Who they report to and who reports to them is critical to getting the right job done on any given day.
Organizational structure is particularly important in decision making and communication. Organizational structures run the risk of being outdated in the fast paced world of digital connections or, even worse, dysfunctional. Transformation will probably require some level of organizational redesign. It is to be ignored to the peril of the digital executive.
Many of my clients tell me that they find it increasingly difficult to operate within outdated or dysfunctional structures. My prevailing impression is that organizations either overlook the importance of organizational design or simply don’t know what to do.
This isn’t surprising since the subject is complex and often poorly explained by academics and consultants, finding a practical approach to organizational design can be difficult, although some business schools are attempting to simplify things (pdf).
It is also a pity since structure dictates the relationship of roles in an organization, and therefore, how people function. An outdated structure can result in unnecessary ambiguity and confusion and often a lack of accountability. Structures can be complicated: one British bank where I coach has a clear hierarchy at the top but a complex matrix structure further down which, according to my clients, allows some managers to dodge their responsibilities while others can move troublesome staff around or “exit” them easily.
There are many types of structures. There is no right or wrong kind of structure but some may achieve better results for the donor than others.
Some structures are either functional or product oriented.
Some structures are either hierarchal or flat.
Functional Structure – People who do similar tasks, have similar skills and/or jobs in an organization are grouped into a functional structure. The advantages of this kind of structure include quick decision making because the group members are able to communicate easily with each other. People in functional structures can learn from each other easier because they already possess similar skill sets and interests.
Divisional Structure – In a divisional structure, the nonprofit will coordinate inter-group relationships to create a work team that can readily meet the needs of a certain donor or group of donors. The division of labor in this kind of structure will ensure greater output of varieties of similar products. An example of a divisional structure is geographical, where divisions are set up in regions to work with each other to produce similar products that meet the needs of the individual regions.
Matrix Structure – Matrix structures are more complex in that they group people in two different ways: by the function they perform and by the product team they are working with. In a matrix structure the team members are given more autonomy and expected to take more responsibility for their work. This increases the productivity of the team, fosters greater innovation and creativity, and allows managers to cooperatively solve decision-making problems through group interaction.
Project Organization Structure – In a project-organizational structure, the teams are put together based on the number of members needed to produce the product or complete the project. The number of significantly different kinds of tasks are taken into account when structuring a project in this manner, assuring that the right members are chosen to participate in the project.