Organizational Structures and Leadership Development

As contractors look at their organizational structures with an eye toward both sustainable growth and succession, they must balance the efficiency a functional area structure provides with the leadership development of a business unit structure.

D. Brown Management Profile Picture
Share

In a functional area structure, you avoid duplication of roles and individual functional areas such as estimating, purchasing, and field management are centralized. If executed effectively, this creates great efficiencies with the enabling bureaucracy required for scalability.

Succession: Organizational Structures and Leadership Development. A functional area organizational structure versus one aligned around business units down to a Project Manager. Levels of work including front-line execution, front-line supervision, process design and management, operations flow and integration, general business leadership. Stratified Systems Theory (SST).

For some contractors, it makes sense to break the business into smaller independent business units so broader general leadership skills can be developed and assessed. These individual business units are smaller and the job roles must be more fluid, which can be great for accelerating development and frustratingly messy at the same time.  

Just remember that compensation and accountability will not create competencies and both structures require deliberate development of the team.  

This is more challenging than we can cover in a short post. Please contact us if you want to further discuss the specifics of your organizational structure. 


Organizational Structures and Leadership Development
Continue building value in your business, yourself and your key team members with a good succession strategy....

Organizational Structures and Leadership Development
Continue building value in your business, yourself and your key team members with a good succession strategy....

PICK SMART Improvements
Contractors will never have enough resources to solve all problems or take advantage of every opportunity they face. There are a couple tools that can be used to align the team around the best utilization of resources:
Issue 6 of 9: Past Liabilities
Construction Ownership Transition Issue 6 of 9: Who Will Own Past Liabilities - Asset or Stock Sale? Not only is construction a cash-intensive business, it is also a risky one.
Five Interlinked Questions to Define Your Strategy
Strategic choices at all levels including company, market(s), operational excellence, and organizational development are the most highly leveraged decisions made by construction business leaders. Those choices start with five interlinked questions.