In general, though, results speak for themselves, and IBM has done well over the last decade or so. I’m not a big fan of organizational structures that rely too heavily on matrix models, but as stated in the article, they can have value if used sparingly and properly. They were careful to keep the operating units small by breaking them up as they grew. When a city doubles in size, the productivity per person increases by 15%. For medium-sized companies… If you have several different technologies, how do they fit together technically–if at all? If used too frequently, or without endowing the “head” of the matrix with real power to accomplish the desired goals, matrix organizations can quickly become ineffective and politically driven entities–and the butt of jokes around the water cooler. These are the types of things can can’t be legislated strictly by org. But for innovation, I think that the culture is even more important than the org structure. Again, I believe that this hands-off, decentralized approach only worked well because this style fit with Bill and Dave’s personalities. It is also very important that “failure” is allowed and not penalized too heavily, so that people can feel comfortable taking calculated risks that can lead to innovation. This assumes that the resources are available for a decentralized organization, because one disadvantage of this approach is there is always going to be some duplication of roles across independent business units. PJM Consulting provides management consulting and interim management services to technology companies. For them, the root lies in organizational structure. Unsurprisingly, most startups have very little understanding of what this team does. Commentdocument.getElementById("comment").setAttribute( "id", "a1009ce22262faf88f57716be7cee441" );document.getElementById("j6a91a79fe").setAttribute( "id", "comment" ); PJM Consulting San Diego, CA 92130 (858)792-1062, Founded 2001 Management Consulting & Interim Executives for Software and Hardware Companies, © 2004-2020 PJM Consulting Some Rights Reserved. Similar to the question about the principal’s styles above, the organizational style needs to fit with the “personality” of your company: it’s culture. Highly dynamic and creative companies – such as software developers, architecture firms, special industrial equipment installation projects and event organization companies – typically use this structure. Hopefully this short article will stimulate some thinking on this important topic, and help you avoid an organizational structure which tends to be formed haphazardly as companies are started and grown. In the modern times, a lot of emphasis is given to innovation and innovation driven organizations. while at the website (if any), tailor our website to your preferences or interests, or customize promotions or marketing. It’s my preference for a growing software company organizational structure  which is starting to “spreading their wings” beyond their initial market or technology focus, as well as for larger companies. It was like trying to turn a battleship on a dime and was really painful. This is the team that’ll do the deep dive into your users. Your email address will not be published. One good way to mitigate this is at least initially is to centralize and share as many of the non-product specific functions as possible, such as finance, HR, quality control, etc. Follow Phil Morettini and Morettini on Management via Twitter, Facebook, LinkedIn, RSS, or the PJM Consulting Quarterly Newsletter. It’s my preference for a growing software company organizational structure which is starting to “spreading their wings” beyond their initial market or technology focus, as well as for larger companies. This may give the new initiative more emphasis than it normally would get, given what might be seen as its its modest importance to the overall business at that point. This is just a quick take on a very complex topic. Every engagement is custom-developed to encompass the unique needs of your market and company, as well as your personal management preferences. Trying to get even the simplest, small thing done had to go many levels up. Download this free template and easily adjust it with MyDraw to your company demands and necessities. The typical organizational structure of a software company depends largely on its size. It’s strength lies in the ability to keep lines of communications short, keep personnel close to the marketplace and motivate self-starters by providing more positions of broad responsibility.

software company organizational structure

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