Does your corporate structure stifle your innovation?

Companies in our industry have cultures that are quite similar in spite of the fact that each company has its own origin, history, and management team.

Most systems integrators have the same customer base, develop the same technologies, have virtually the same accounting system, have the same business development and capture management processes, and often hire employees from direct competitors.

New employees can leave one company on a Friday and on the following Monday begin to contribute quickly, upon joining their new company, with little or no orientation required to learn their new firm’s working environment. This situation is strong evidence of cultural and management system homogeneity across companies in our industry.

Most significantly these firms have an almost identical organization structure. More often than not corporate headquarters acts as a “holding company” comprised of profit and loss centers—business groups, which in turn are made up of divisions, departments and integration/consulting projects. A hierarchal, ‘command and control’ organization, which has existed for decades in these companies, creates and sustains this common structure.

But this stove-piped organization structure does not work anymore. It cannot adapt to an ever changing market and technology environment.  Having an entrenched structure and operational framework is a company’s biggest impediment to new business growth.

Structure is the most damning artifact of a company’s culture.

Having an old-style hierarchal organization structure and measurements constrains innovation, creativity and most importantly internal communication. It creates a straight jacket that makes organization adaptability to changes in the market impossible.

Existing quantitative measurements that are sub-optimized, based upon the goals of a division or line of business, create the illusion of management control when larger company strategic goals, like winning new business, are subsumed by this organization construct.

Companies need internal structures and communication that support network relationships not a hierarchy. The lack of formal and informal, network relationships throughout the enterprise is why business development and operations constantly struggle to work together. Until there are qualitative measurements and rewards that cross organization boundaries and drive cooperation, winning new business will continue to be quite difficult to achieve.

When firms have the same structure, management systems, technologies, business development and capture management processes, how will a company distinguish itself in the market? 

It must distinguish itself through recognizing its unique combination of employees. Each company’s unique collection of talent can be their competitive advantage if properly communicated to the market.

How do you present your subject matter experts’ knowledge and credentials to your company’s market base? 

How do you demonstrate your company’s thought leadership regardless of its structure?

It is time for our industry to shed an outdated organizational structure and adapt to the realities of our market environment.

About the Author

Bob Davis has over 35-years’ experience in the federal information technology industry. He has held senior positions with products- and services-oriented, high-tech IT companies during his career. Bob has successfully worked for large- and medium–sized companies, and small businesses. Leadership positions have been held in business development, marketing, and program management. Bob has a doctor of management from the University of Maryland University College. He works for a medium-size company in our industry.

Reader Comments

Fri, Jan 16, 2015 Re A. Wells Comment

Agree strongly. You almost said it plainly--you gotta almost ignore the formal org in order to get things done. You were also too polite to say: the BD folks don't contribute much, not even much that is pivotal in adding or retaining business. I don't agree that "we know within our community" who succeeds, specifically. Sr. mgt in most Beltway stalwarts (1) don't have a firm definition of "success" and they don't know where it comes from in programs--it is guess/try/fail/try/guess... Making a profit, and they are usually piddling compared w other companies one could invest in, is usually by brute force, e.g., cost cutting of nonproductive assets or pricing or even accounting games. Columnist seems to think winning new biz will be hard to do, blah, blah. Someone does it now, but it is mainly because the gumming wants to spend and knows how to wire procurements for favorites, who know how to twist the BD process from the company side. Org is largely irrelevant.

Fri, Jan 16, 2015

Oddly argued piece. No evidence. If you look at successful companies, you will find little pattern in their organization. (Columnist seems to think SI's are "successful"--maybe some are from an investor viewpoint in a few periods because of Federal spending and lax USG oversight.) But certainly not from a customer viewpoint in the Federal space. Look at the vast number of failed programs costing tens or hundreds of $M or billions) If you look at the many, many failures of programs--the screwups come from all kinds of organizations. Organization is just a hall to play in. If you find yourself having to explain, or even just describe, your structure in more than a couple of sentences to a customer, you know you are in trouble. And organizational restructurings are costly, just look close to the Beltway in McLean.

Fri, Jan 16, 2015

This is very interesting and helpful. However you used a term incorrectly. The term is straitjacket not straight jacket.

Fri, Jan 16, 2015 Anne Wells

I'm not sure I agree with this. One does not "sell" capability based on organizational structure - hopefully, that is transparent to our customers. The issue of collaboration is a long standing one, and for the most part, independent of organization. Company culture and establishment of internal "working groups" or other collaborative forums helps strengthen not only comm between BD and Ops, but between the various pieces of Ops that are needed for organic growth, not normally in the scope of formal BD. As to distinguishing companies, I think that is known to be based on two things: track record and personnel. Many attempt to solve hard technical issues - we know within our community who succeeds and who is behind that success.

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