Do You Need To Change Your Organisational Structure To Improve Your Customer Experience?

Organization chart

I’ve been thinking about whether an organisation’s structure impacts it’s ability to deliver great customer experiences recently. I’ve also been exploring this in my podcast interview series, where I interview leading authors, entrepreneurs and business leaders about what it takes to deliver great service and customer experiences.

What I’m finding is that to deliver great customer experience and exceptional customer service, organisations need to have the right culture, values, behaviours, mission and purpose etc etc in place.

That’s fair enough, you might say, and may not be much of a surprise.

But, what about an organisation’s structure? And, is the traditional, hierarchical and command and control structure still ‘fit for purpose’?

Bruce Poon Tip, founder of G Adventures, doesn’t necessarily think so.

I had a chance to chat to him about this in my most recent podcast interview, where we chatted about that and his new book: Looptail, which tells the story of G Adventures, their journey, success and how they have radically changed their organisational structure.

In his book, Bruce says that:

“The traditional ivory tower, military command-and-control style of leadership……is dead, and while you might get some results employing such tactics, you will forever remain vulnerable to being beaten by an organisation that is more social and engages employees and customers differently.”

If you are not familiar with G Adventures, you might think that that is a bold statement. But, Bruce makes that statement with an impressive track record. G Adventures is the world’s largest small group adventure travel company, are a leader in their niche and have been delivering double-digit growth year on year for the last twenty years. They also operate in 100 countries, generate over $170 million a year in sales and have over 2,000 employees.

However, he doesn’t stop there and goes on to say, in his book:

“high performing organisations often have a more open structure, and like them, we aim to create more freedom as we get bigger. Replacing those traditional office-based structures is how we put a stronger emphasis on our company culture – and how we avoid putting our employees in an organisational straitjacket”

In essence, what they have done is move away from a traditional, hierarchical structure to one that is flatter and more ‘circular’, in nature. This is designed to help them keep leadership at the centre of decisions, but, at the same time, helps create enough freedom amongst their employees so that it drives sustained innovation, fantastic results as well as engaged employees and customers.

But, G Adventures are not alone in pursing new and radical structures as a way of staying competitive, engaging employees and delivering great service. A recent story in The Washington Post (Zappos says goodbye to bosses), reported that Zappos, the customer service obsessed online retailer, is currently in the midst of implementing a new organisational structure called a “holacracy.”

This system, like G Adventures, is based on ‘circles’. However, in the ‘holacracy’ approach a company organises itself around the work that needs to be done and not around people occupying specific job functions.

Again, the rationale behind Zappo’s organisational change is to get more employees involved in how the firm is run, ‘stave off’ bureaucracy and retain their flexibility as they continue to grow. This, they believe, will also drive innovation and enable them to maintain their customer service edge.

Now, many people may ‘pooh-pooh’ these ideas as ‘airy-fairy’ and ones that will, typically, only work in smaller firms. With thousands of employees each, I bet, G Adventures and Zappos would disagree.

This doesn’t mean to say that that all firms should be thinking about ‘circles’ when they come to assess what is the right organisational structure for them and what they want to achieve.

However, I would ask one question if delivering great service and exceptional customer experiences is your goal this year and that is: Do You Need To Change Your Organisational Structure To Improve Your Customer Experience?

 

This post originally appeared on my Forbes column.

 

Photo Credit: Amy Phetamine via Compfight cc

Comments

  1. Adrian,

    I am a great believer that form should follow function, however I think it is unwise to think about structure as the key lever to deliver that function.

    Sharks and dolphins have both evolved from very different biological backgrounds to become marine predators.

    So maybe it is better to worry about how the organisation is going to work, what its processes and goals are than how it is structured.

    James

  2. adrianswinscoe says:

    James,
    I agree with you……start with the end in mind and work backwards from there. However, I wanted to throw in the question about organisational structure to try and ‘nudge’ away from using and accepting the ‘default’ structure is fit for purpose.

    Adrian

  3. Hello Adrian,

    I am clear that structure matters. Think about a house and now think of a large detached house, two floors, large garden etc. Then think of a bungalow. Now think of town house, narrow, high, with many floors – as much as four. What is and is not possible in these houses? What do these ‘houses’ call forth and what do they either render difficult or out of the question?

    As for organisational structure, I am clear that by dividing up organisation into functional teams, functional specialisation (and team ‘loyalty’) is strengthened at the expense of ‘business roundedness’ and collaboration across teams.

    Look at Zappos and their organisational structure. How many organisations are there where head office is in the call-centre? How many CEO’s sit in the call-centre? Normally, the call-centre is in the wilds many hundreds even thousands of miles from head office.

    Structure matters. And I say structure is the outer manifestation of the inner character of the powers that shape the organisation. Which also means that you cannot simply change structure, only structure, and expect a different result. Everything is tied to everything: change of structure can only work if culture is also changed and the two are brought into alignment. And this cannot happen unless management and performance management practices are also changed and bought into alignment.

    If you dive into Sociocracry and Gerard Edenburg (the inventor of Sociocracy which is the European name for Holocracy) then you will find that Sociocracy is fundamentally a way of being and showing up in the world. One facet of this way of being in the world is the way that the organisation is structured. And it is only one way.

    At your service
    maz

    • adrianswinscoe says:

      Maz,
      Thank you for the reference to Gerard Edenburg and Sociocracy.

      As I suggested to James, we need to ‘start with the end in mind and work backwards from there’. Therefore, I agree, structure is only one element of the bigger picture and puzzle but is an element that needs consideration.

      Adrian

  4. Adrian,

    I think there’s something to organizational structure, but I think it’s a slightly different angle. Whatever structure is in place, as long as the various functional areas work together toward a common goal (a great customer experience), and silos are non-existent as a result, it’s all good. :-)

    Annette :-)

    • adrianswinscoe says:

      Annette,
      I think you are right when you say that as long as everyone is working together towards a common goal then we are on the right track. However, I would like firms to consider structure in their thinking and not assume that what has worked in the past will work in the future.

      Adrian

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