Your Organization Structure is the Answer to Your Growth

This year is an exciting journey through the world of capacity planning, and research around resource planning for service firms that are growing. I’m partnering with Ian Vacin in this work and we are learning a great deal of information in the research we are conducting with service organizations around the world.

For a brief primer, when service organizations (like agencies) scale and expand, they often run into the complexity of knowing the ability of their growing teams to be able to produce revenue. How you bring in your revenue is important. Project-based vs recurring revenue will dictate and change your team structure. Often, agency owners don’t realize this and just push into the market to bring in more revenue, without the thought for how this will change (or disrupt) their team models. Team models have to adapt over time as the revenue of the organization and the size of the team increases. In a sense, the owners must do the disrupting to the org’s model, and do it with care and strategy so the team can walk with the expanding organization through the chaos that is ultimately the result of these disruptive changes.

Service organizations who do not do this can: 

• overwhelm the owner (and team)
• confuse the team as to what role they are to adhere to in the organization
• minimize the impact of the value of their offerings
• bloat the knowledge management required to move services through an expanding organization
• give poor client service
• and much more

One key point we are finding in the research interviews is that the organizations who get this right actually restructure their teams based on some key team sizes:

• 8 to 12 – this is when team skills need to be focused on their specific strengths and move away from team that “do everything.” Owners/founders must leverage leadership and senior teams at this size as well. 
• 15 to 25 – this is when service organizations need to begin to ‘departmentalize’ – that is, they have to begin arranging their organizations into departments – Creative, Account Management, Strategy, and C-suite activities.

There are even further changes that team structures must adopt as they grow larger but these two striads above dictate most agency sizes. Let us know what level of chaos you may feel in your expanding services organization. Email us at [email protected] to give us your own insights. 

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