How to design a structure for an organisation that’s clearer on what it’s not than what it is

A client recently asked me, “Andrew, how do I know if I’ve got the right structure?”
She’s involved in setting up one of the new Medicare Locals and she’s smart enough to know that there’s no single right structure. But, she’s also savvy enough to know that there are common problems and pitfalls in structuring an organisation that’s not a service provider, not a policy unit, not a commercial sales or marketing function, not a research centre, and not a funder and contract manager. It’s a little bit of all of these.
In my work as an organisational consultant to government and the non-profit sector, I’ve seen *lots* of successful (and unsuccessful!) structures which led me to offer the following ten thoughts to my client:

1. You’ve probably heard the two sayings,  ”Form follows function” and “Culture eats strategy for breakfast”. I’d argue that the ‘chain’ of conceptual importance for an organisation is as follows: value offered to customers > values > culture > strategy > function > structure. In other words, it’s premature to deal with structure unless we’re clear on the other stuff first (this doesn’t mean having nailed it down totally, but having strong ideas about each – and plans to develop them).
2. A good structure makes it clear how the customer interfaces / core service delivery work, separately from the corporate functions which service internal customers.
3. The best structures define TEAM performance, rather than individual performance. In other words, you shouldn’t be able achieve your own objectives unless others in your team achieve theirs.
4. Excellent structures tell us what the span of decision-making is for a given role; this should be tied to strategic plan / governance arrangements (advisory committees, etc).
5. A good structure should make provision for time-based projects to exist alongside ‘business as usual’ / ongoing delivery of core services.
6. The best structures state or imply leadership role descriptions (both for individuals – and the leadership / executive team) as a whole, by distinguishing between strategic and operational concerns.
7. There is no right answer to the question, “Should our structure be based on the people we have, or the people we’d like to have?” . . . but we do need to be clear whether our structure is person-independent, or person-dependent.
8. Traditional hierarchies aren’t going to cut it for a Medicare Local. You need, as a minimum, a well-organised matrix model, possibly even with ingredients of a heterarchy, or even a phenotype model.
9. Finally, a structure alone is only going to answer one question: “What is each person’s job and how do they relate to each other functionally?” There are six parallel pieces of work which need to exist at the same time:
   • functional descriptions of major areas of core business
   • performance descriptions for teams / key individuals
   • leadership team charter / leadership role descriptions
   • governance descriptions / decision-making cycles
   • reporting relationships and key measures / reporting dimensions
   • cost- and revenue-base for teams / individuals
10. A structure is just that. It doesn’t do the work of strategy, culture, values or value. Put 90% of your effort into those first.