The search for an ideal or perfect structure is about as futile as trying to find the ideal canned improvement process to drop on the organization (or ourselves). It depends on the organization's context and focus (vision, values, and purpose), goals and priorities, skill and experience levels, culture, teams' effectiveness and so on. Each is unique to any organization.

Research and experience shows that the shape and characteristics of high performing organization structures have a number of common features:

Intense Customer and Market Focus — systems, structures, processes, and innovations are all aimed at and flow from the voices of the market and customers. Field people and hands-on senior managers drive the organization in daily contact with customers and partners.

Team-based — operational and improvement teams are used up, down, and across the organization. A multitude of operational teams manage whole systems or self-contained sub-systems such as regions, branches, processes, and complete business units.

Highly Autonomous and Decentralized — dozens, hundreds, or thousands of mini-business units or businesses are created throughout a single company. Local teams adjust their company's product and service mix to suit their market and conditions. They also reconfigure the existing products and services or develop new experimental prototypes to meet customer/partner needs.

Servant-Leadership — senior managers provide strong Context and Focus (vision, values, and purpose) and strategic direction to guide and shape the organization. Very lean and keen head office management and staff serve the needs of those people doing the work that the customers actually care about and are willing to pay for. Support systems are designed to serve the servers and producers, not management and the bureaucracy.

Networks, Partnerships, and Alliances — organizational and departmental boundaries blur as teams reach out, in, or across to get the expertise, materials, capital, or other support they need to meet customer needs and develop new markets. Learning how to partner with other teams or organizations is fast becoming a critical performance skill.

Fewer and More Focused Staff Professionals — accountants, human resource professionals, improvement specialists, purchasing managers, engineers and designers, and the like, are either in the midst of operational action as a member of an operational team, or they sell their services to a number of teams. Many teams are also purchasing some of this expertise from outside as needed.

Few Management Levels — spans of control stretch into dozens and even hundreds of people (organized in self-managing teams) to one manager. Effective managers are highly skilled in leading (Context and Focus), directing (establishing goals and priorities), and developing (training and coaching).

One Customer Contact Point — although teams and team members will come and go as needed, continuity with the customer is maintained by an unchanging small group or individual. Internal service and support systems serve the needs of the person or team coordinating and managing the customer relationship.

We are in the midst of a major transition from organization and management practices that began around the turn of the 20th century. Our cloudy crystal ball won't allow us to see which organization structure or model will dominate the 21st century. Since we're no longer in an age of mass production and standardization, there won't likely be just one type. Rather, we'll see our top organizations grow and shed a variety of structures and models to suit the their changing circumstances.

- DeTimes

Question asked by a Senior Executive from Wal-Mart, US on LinkedIn:

Which implementation organization structure do you find is a best practice? One that is organized by system platform or one that is organized by function. For example would you expect to see an ERP team and Spend Management team or would expect to see more of an operational organization and a pool of project managers that can be assigned based upon the needed skills of any project?
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Answer (Rated as Best):

This is a very challenging issue. For example if you need to implement a highly specialized technology project you will need a right mix of people. In that case you will need execution from an experts' group and managed by good administrators who can make worthy business decisions.

It more important to answer, what is the right mix of people required in the organization structure? I would recommend a fluid organization structure. What I mean, is that at technical levels one should have teams classified by expertise and at administrative / management level classification must be done by functions. Interoperability is important and an apt resource allocation on the basis of need, to deliver a certain project, should be done.

Project management function seems to get more generic at every higher level. And technical expertise tends to become more specific at each advancing level. Creating an organization with fluid structure is critical for business success.

Directors (Functional)
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Mid Managers (Functional)
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Team Managers (Specialized)
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Technical Groups (Specialized by system platform)

In a fluid organization, it is easy to pull resources from independent teams that are critical to a particular project. So simply pick the right mix of people and designate them accordingly for a specific project. I think this flexibility helps in various ways, not only in delivering the project success but also, in planning for future business needs.

We can conclude saying that a fluid organization provides flexibility to organize the resources in need, optimize them at best, plan for future business needs, and achieve business goals objectively.

- DeTimes