Parameters: In this hypothetical scenario, my online subscription based outdoor gear company is in a period of major success and popularity, because of this I (as the CEO) am looking to adapt my organizational structure to insure the most efficiency and effectiveness from my product. The below criteria have caused me to reevaluate the structure of my organization. Before the below changes are implemented, it should be noted that my company has now grown from a single person operation to a firm with 30 employees with a distinct marketing and accounting departments, with a single human resource professional on staff. Because of this growth my organizational structure has finally changed to the flat lattice structure that was mentioned in the previous blog post.
Product Line Expansion: Up until now, my company has focused on the bread and butter of the outdoor world. This included three subsets of outdoor enthusiasts, all of which could have a subscription tailored toward their wants. The three subsets were: hiking, camping, and mountain climbing. Knowing that there is much more to do outdoors than this, I have decided to start to implement two new categories: Biking and Skiing.
What this means: With the addition of two new subsets of gear that can now be available in the monthly packages, I will need to look for new suppliers that can provide quality products for me to ship to my customers. This creates an issue because I am now bogged down with shipments from multiple companies, not including the new ones I am set to include. My flat lattice structure allows me to consult with my colleagues and see if they have any ideas. After a consensus was made, we felt that we should hire more staff and should transition into a matrix structure, but with the underlying principle of cross department communication and consultation still being maintained. With this newfound matrix style structure, I can create teams that specialize in each product subgroup.
International Markets: Until now, the company has been solely national. With the addition of the skiing and biking lines, we feel that their is a lucrative opportunity to expand our service to some select European countries who favor these activities heavily. In order to test the effectiveness of this expansion, I am looking to add international shipping options to Sweden (with success we can rapidly add more nations).
What this means: After consulting with my staff, we feel that it is necessary to create another department to be placed within the organization. Our office’s large storage area has been the main place for the products we ship. This worked initially, but with our recent growth, and international expansion opportunity, we feel that having our own warehouse and staff could be beneficial. For this reason we have decided to look into acquiring a warehouse of our own, but instead of purchasing or building it, there might be another option…
Merger: After analyzing some options, there is a potential merger opportunity that could alleviate our storage issue. A medium sized health bar company is looking for a partner to help sell their product, they have warehouse space to store their bars, but because of their failure to sell as much product as they want, they have had to limit production. This has left them with a large amount of access space in their warehouses (already equipped with warehouse staff). Knowing that my customer base may have interest in this healthy treat and that my company has grown in popularity, my organization has offered to merge with the health bar company. With this merger, my company will include one of their health bars in every subscription that is sent out in exchange for the opportunity of my other gear being stored in their excess warehouse space. The merger was a success and my company finally has its own warehouse space and personnel.
What this means: With the addition of a whole new set of employees that will be entering the company, it could be difficult to conserve the flat lattice structure we once had. That being said, it is not impossible. The organizational structure may need to change for a relatively short period in order for employees from both sides to “settle in”. This can be done by creating a department that has a mixture of both companies employees. The best way to do this is to create a small team of people who excel in international sales from both organizations, effectively knock out two birds with one stone. Ultimately, when everyone is comfortable with their new work environment, the initial flat lattice/matrix hybrid could be initiated allowing ideas to flow from all product lines and fields of expertise.