What comes first: People or structure?

A fundamental question in organisation design is the following: Should you attempt to design the structure to fit the people that are available, or you should you start by defining the structure, and then select or recruit people to fill the roles specified by the structure?

Several management gurus have argued that structure is less important than before, or even irrelevant, in modern organizations. Michael Hammer – known for the “re-engineering” movement in the 1990’s – now holds courses for managers teaching them how to lead “structureless” organizations. Jim Collins, the author of the best seller Good to Great, proclaims that one should decide “who before what”:

“Get the right people on the bus (…) before you worry about where your’re going to drive the bus”

These viewpoints differ sharply from the viewpoints of the late management theorist Elliott Jaques, who, between 1950 and his death in 2003, wrote a number of books on how to design optimal hierarchical structures. See for example this book. His name is not as well known as the most influential management gurus today, yet one reckons that around 400 companies worldwide have used his framework in defining their management structure (these include Unilever, a global firm with around 200 000 employees).

He was adamant about what the appropriate sequence was: That one should begin with strategy, proceed to define the organizational units, processes and roles required to realize the strategic goals, identify the competencies required, and, as the last step, select the individuals best suited to perform the roles.

Jaques claimed that by considering structure first, you not only create a more effective organization, but also build an organization where people are treated more fairly and have better development opportunities. By defining the structure first you ensure that there is a need for each role, that you hire the right individuals, that managers have clear accountabilities and are capable of leading people, and that performance and potential can be assessed in a transparent and predictable manner.

I am asking myself: Doesn’t the metaphor that Jim Collins chose illustrate the problem: Would you board a bus unless you knew where it was heading? It’s not without reason that the destination of most buses is marked in big letters on the front window!