Organizing principles help shape organizational design. On one end of the spectrum is the concept of a flat and social org, and on the other side of the spectrum is a hierarchical structure.

Flat organizations have very few or even no defined layers, instead relying on self-managing individuals and teams. Flat organizations don't rely on an org chart, instead depending on the social connections of individuals to collaborate on specific problems and opportunities.

Gore Inc., the $3+ billion manufacturer of high-end waterproof materials has a flat and social organization. Consistently placed in Forbes' Top 100 Best Places to Work, Gore doesn't have an org chart, refers to all employees are "Associates," and relies on self-managing teams to innovate new ideas and products. Flat and social organizations can be the right model for companies in highly dynamic markets, where innovation and agility are essential to competing.

On the other side of the spectrum are highly hierarchical organizations, where the structure is hierarchically disaggregated into functions. Decisions and directions typically flow down from executives to functional leaders to team leaders to individual contributors. Hierarchical organizations generally are a good fit for markets with a slower pace of disruption and where operational execution and specialization are key to competing.

Of course, there is substantial space between the two sides of the spectrum, where there may be a defined hierarchy, but the culture supports a high level of communication and direction flowing in all directions, collaboration, and team orientation.

The next level of org design is around organizational framing. Is the org design going to be framed as a functional organization, organized into business units, markets, and/or geographies, or matrixed across multiple dimensions?

Determining the right framing structure is based on sheer size, focus, economy of scale, core competencies, market, and competitive dynamics.

In far too many situations, especially with new leadership regimes, reframing the organization (e.g., reorganizing from markets to geographies) is heavily relied on to improve the organization, only to have the organization typically fall into chaos and inefficiency. The change management necessary to properly reframe an organization is enormous, given the changes required to potentially thousands of processes across the organization, reporting relationships, and roles and competencies. Too often than not, in reorganizations, the leadership does not invest enough resources and effort into the necessary change management.

Over time, an organization is like a house, it gets messy. Typically, one of the first things to address in org design is layers and span of control.

Layers are the number of management layers in the organization, while the span of control is the average number of direct reports per manager. Typically the fewer layers (5 or fewer) and the higher the span of control (7-12) the better.

Doing the analysis and mapping out the org is always one of the most fruitful org design analyses. Expanding the span of control and delayering the organization will drive efficiency and effectiveness by improving decision-making, communication, and collaboration, and reducing bureaucracy and costs.

The most nuanced and complex decision in org design is landing on the actual reporting structure, which necessitates putting names and titles in boxes. The better the data and analysis informing the decisions, the better decisions.

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