Having worked for small entrepreneurial ventures nearly all of my
career I've seen several examples of nimble companies and their varying growth
strategies. Some were examples of what not to do while others proved to have
devised very successful formulas. An example of the latter is my current
employer, a small contract furniture dealer based in Pasadena, Ca. It’s
headed by a 2 person partnership (one senior, one junior) who combined have
over sixty years experience in the business.
To begin with, their partnership is a primary example of the
shared leadership that Worley and Lawler describe in “Designing Organizations
that are Built for Change” (2006). The senior partner, Bill, is the consummate
entrepreneur; always on the go, always on the phone, always hunting down new
clients and competitors alike. He’s also got a very keen eye for spotting
market trends, opportunities and potential obstacles. Patty, the junior
partner, helps keep Bill grounded and to execute whatever strategy he devises
with calm, methodical, well thought out plans. Between them, through their
complementary strengths, they’ve built a company that, when analysed against
Galbraith’s Star Model (2011), illustrates a fine example of what a lean
company can be and what it can accomplish.
The strategy of the company revolves around building an
organization that is small and agile yet appears large and responsive to our
clients. With this strategy we were able to weather the economic downturn that
is often felt first in industries like ours; when companies downsize they
aren’t buying office chairs, they’re selling their used ones. Our larger
competitors didn’t adapt quickly enough to the changing environment (Morgan,
1998) and one by one began closing their doors, some after over three quarters
of a century in business.
In our industry, at the dealer level, the name of the game is
unquestionably speed (Galbraith, 2002). While this is true of many companies in
retail consumer industries it is especially difficult for us, in a business to
business environment, because every client equals a custom, often very large,
order.To expedite the design, sale, order processing, manufacturing, shipping
and installation of an order takes a tremendous effort. This, in previous
companies I've worked for, would typically be accomplished by a specific
department for each of these tasks working independently as part of a machine
(Morgan, 1998). We handle these processes (Galbraith 2011) more efficiently
with plenty of collaboration and networking across departments (Galbraith,
2002).
The departments that comprise the core business functions are
Sales, Customer Service and Design. Each of these units employ but a handful of
people who, like the owners, have complementary skills. Sales people have
between them interior design, project management, installation as well as
marketing experience. Customer Service has seasoned customer service
professionals who are complemented by younger, less experienced, but more
technologically savvy teammates. Lastly, the Design Department, my department,
likewise benefits from trained interior designers and my technical/project
management and computer aided drafting background. This approach to staffing
the company with cross-functional talent is very much in-line with Galbraith’s
perspective on people described in his Star Model (2011).
What we have put together as a company is, I’m happy to say, is a
cohesive team of talented, hard working folks who are amply rewarded
(Galbraith, 2011) for our contributions. For example, one interior designer,
a customer service member and I have promoted to account management and get to
participate in the profits generated from our sales. In addition, profit
sharing bonuses are given to all employees at the end of our fiscal year in June.
Now, all this is not to paint a purely rosy picture. There are certainly
times when being so lean pushes our capacity beyond its limits. We frequently
struggle to keep up with the pace of the industry and the deadlines our
customers demand (Morgan, 1998). However, this is often remedied by drawing on
a network of contractors, assembled from contacts brought by various members of
our company, who can help absorb the overflow (Worley & Lawler, 2006).
Indeed, the culture and positive morale within the company help to offset the
pressures of a high pace environment. It is certain that as we continue to grow we will encounter new challenges, but I have every confidence that our teams can overcome them. For my part in it, I believe the lessons of this week's reading has helped me to better understand why it is our organization works and I will work help the company maintain the these elements as it evolves.
References
Galbraith, J. R. (2002).
Designing Organizations., 1-8,73-90.
Galbraith, J. R. (2002).
Designing Organizations., 1-8,73-90.
Galbraith, J. R. (2011).
The Star Model., 1-6.
Morgan, G. (1998). Images
of organization: The Executive Edition., 35-68.
Worley, C. G., &
Lawler III, E. E. (2006). Designing Organizations that are Built for Change.
MIT Sloan Management Review, 48(1), 18-23.
Felipe, it sounds like you are working in a very high-performing organization that has successfully implemented many of the principles we discussed in this week's readings. While it sounds like your small size can be a challenge, it has also provided you with edge on your larger competitors. How do you think your company's size contributed to its ability to adapt? You say that speed is particularly important in your business. Do you think size plays a role here as well?
ReplyDeleteI'm also interested to hear about the "processes" at work in your organization. Gailbraith talks about vertical and lateral processes. Can you think of examples of these in your organization.
Felipe, this is a very interesting case study to me because I’ve seen a number of organizations fold under the pressure of not being able to adjust and survive in what has been an incredibly difficult economy, particularly for companies that sell to the consumer market. What is noteworthy to me is that your company is in the business of luxury items. (By “luxury” I’m referring to the fact that furniture is something that people don’t absolutely NEED and would probably forgo when budgets get tight.)
ReplyDeleteAs the saying goes, it takes much longer to turn a large ship than it does a small speed boat. This company, being small and led by a two-person partnership, was able to quickly shift strategies and adjust processes to meet the changing needs of your customers. This is something that the larger stores could not have done. Perhaps Wickes Furniture failed because it was too large to adjust to the changing market?
Also, I get the feeling that this small company is more like a family than a large group of workers. I’m sure that this culture leads to an environment where the employees rally behind the leadership to drive performance and engage in the decision-making processes.
I’d be interested in hearing about how open the communication is between the partners and the employees. Do they seek your input regarding strategic decisions under consideration? Do the employees feel comfortable that the partners are open and honest in their communications?
You did a very good job of describing the organizational structure at your company. Having spent most of my career working in a large corporate environment with lots of dysfunction I enjoyed reading about your company. I am curious how long your company has been in business? I am also curious how decision making happens there. Do those partners micro manage or are you empowered to make daily decisions? It sounds like everyone works well together, do you have formal job descriptions? I would assume with the way you describe your company that you do not. If I am accurate in my assumption, do you think this helps with your company’s ability to react quickly to change?
ReplyDeleteFelipe,
ReplyDeleteThis entry was a well thought out and thorough assessment of your firm. It sounds like there is successful implementation of reciprocal integration (Lorsch, 1975) between departments which I would imagine to be the life sustaining "cog" in the wheel of the company's success, being that it is lean and mean (p.6). I noticed you mentioned change and speed as two of the six immutable forces covered in chapter 1 of Galbraith's Designing Organizations (2002). It also seems to to me that there is a little "something special" in the culture of the organization, similar to that of 3M that has allowed you the firm to weather the storm. Would you attribute that to the processes which I would like to hear more about or the rewards or people area that might help motivate people with increased job satisfaction. It also seems as though the partners have implemented the integrating force found in doing business on the internet (Galbraith, 2002) in a brick and mortar environment (p.4). Is that a safe assumption? The area where that appears to pose the potential "stress" point is in the area of processes. By all appearances, this works now, however, as the dynamics of the industry change and trends move toward more perhaps ergonomic fit conscious stations (like a treadmill desk combo)or with an increased downturn in furniture buys because there will be more telecommuting as technology continues to advance, what strategies will be implemented to stay viable? Will growth in staff lead to a more structured leadership structure to keep better track of employees? It will be interesting to see how growth of staff and change in industry will affect the star model in the area of processes and structure.
Galbraith, J.R., (2002). Six immutable forces shaping today's organizations. (new and revised Ed.), Designing Organizations: An executive guide to strategy, structure and process (pp.1-8). San Francisco, CA: Jossey-Bass.
Lorsch, J. W., (1975). Note on organization design. (Report No. 9-476-094). Retrieved from Harvard Business School website: http://www.hbsp.harvard.edu