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[Music] hey y'all it's tom with npcrowd.com again and today we're going to talk about organizational structure in a non-profit now when we talk about organizational structures we're not talking about an org chart an org chart is a visual representation of structure but before you create an org chart you need to know what your structure is and in this article that we have on npcrout.com we talk about the three meta structures for non-profit organizations when i say meta i use that term because these are the three high level organizational structure types and underneath each of these there are variations in other subtypes but at the highest level there's really three types and you might be surprised by number three so let's get started the first type of organizational structure is a vertical structure it's the one that we're most familiar with it's hierarchical it goes from the top to the bottom with one leader at the top and everyone else taking their goal strategy vision from that top leader that vertical could be functional it's divisional however you want to look at it it's kind of that top-down approach the second type is the vertical and horizontal organizational structure that's a mouthful so typically we might hear this called cross-functional or a matrix organization the third one and the one that we'll talk a little bit more about is one that is a boundary-less structure boundary list is it's hard to get your mind around so what you may find is that you've heard of this by a different name sometimes it's called a hollow organization structure modular virtual or in some cases some people may reference it as a learning type organizational structure and uh we're going to get into that just a little bit more but let's start by describing vertical again we're familiar with it you'll see on the chart here that it's kind of the typical representation yes we're using an org chart to demonstrate this but it is a typical org chart you have the executive director and president and then you have another layer of management and then you know either you have line staff or another layer of management and it's kind of the typical structure that's been around for such a long time typical big traditional corporations fall into this category so one of the pros of a vertical organization structure is it's familiar it's well known we understand it because that's typically how we're taught it's the types of organizations we've worked in in the past it um it allows individual contributors to perform their assignments and it's the the higher you go in that structure the more that there's an understanding of what all the individual assignments come together to accomplish it allows for subject matter experts as that hierarchy grows and it does allow for there be to be no confusion as to where direction and decisions come from comes from the top but some of the cons of a vertical organization is it really really can create silos uh whether it be a staff relationship silo it could be communication and coordination between teams doesn't happen maybe as freely because there's a vertical chain of command communication and you typically were taught don't cross those silos it this organization type also can cause a shift in culture because each silo starts to develop their own culture that can cause really some unique identities in each silo in each division each functional area and that can drift the overarching culture of an organization another con or negative to the vertical structure is that poor management skills can really affect the entire team if one division one function one vertical has a poor leader or poor management within it that can affect the entire organization because then the entirety of that function begins to fall apart doesn't work the way that it should it's it's not as strong as it needs to be so it really means that you've got to have strong management not just strong leadership but there actually is a need for strong management skills within a vertical structure now let's talk a little bit about vertical and horizontal or matrix organization you can see here that you have an executive team and absolutely your executive director or president they are the leader of the the non-profit but you have an executive team and that executive team then oversees a level of management whether they do it themselves in a smaller non-profit or they have managers underneath them in a larger non-profit and you might do this by function in this case i'm showing fundraising program development and technology just for example sake but you can see here there's a vertical structure fundraising has a fundraising leader program development has a program leader technology has a technology leader and their team report to them there's a functional accountability vertically but you'll see in the colors horizontally here that there's a program team program number one and that program team is made up of individuals in fundraising program development and technology and all of those individuals in orange there they are all responsible for the effective execution of program number one program number two is made up of individuals from fundraising program development and technology and those individuals are accountable for the effective execution of program number two and you can see here that there's an accountability both vertically to a functional leader as well as to the execution of a program a project some other outcome that needs to take place so this has both a horizontal and a vertical component to it you know one of the the pros that's touted often about a matrix structure is that it promotes great teamwork and cooperation and that's true it also provides some opportunity for advancement within a matrix because you can also have program or team leads on that horizontal axis that are different than the leaders in the vertical axis you may also find that in a matrix structure that vertical and horizontal structure that teams are better equipped and able to complete complex projects tasks and they're able to do that in a way that they can get the support that they need each person from that functional area in a project they can get help from others in that same functional vertical when the horizontal team needs it at times plus you have subject matter experts as part of each and every team as the team needs so the ability to execute is one of the big pros to a matrix structure now not everything is roses in a matrix structure one of the challenges could be that your organization doesn't have enough leadership to go around that the the power of leadership and management is diluted in a matrix structure maybe that kind of goes along with another con and that is that for people working in the horizontal along with vertical management leadership sometimes the lines get blurred about who they report to who makes decisions for and with them if the functional leader has a different opinion about what is most important than the program or project leader now you have a staff member or a team member that is conflicted about who should they go with as far as what they do or don't do and that that's a common common issue so a good matrix organization really needs empowerment it does need good leadership it needs good communication and not just communication within a team but from horizontal leader to vertical leader having a good path of communication and relationship becomes very important now the last type of meta organizational structure that we're going to talk about is an open boundary or a boundary list structure and when we talk about this you may say hey i've never heard of this structure before well maybe you haven't uh but maybe you've seen instances of it especially in the last decade or so and this is where the lines and the boxes in a typical or chart that represents the structure those typical vertical and horizontal boxes and lines kind of disappear and instead what you have is you have teams or departments that are created as needed maybe a bit more organically there's a little more flexibility to address growth opportunities here what you're going to see is in the this example is an open boundary structure but it it has a subtype and it's really called a network uh organizational structure and what we're representing here in the different colors is the blue maybe those are actual employees of your organization the orange they might be volunteers they may be contractors they may be service providers outside your organization that are under contract to you and so really your the structure of your organization is made up of both employees and non-employees it's organized in some cases around a program or a project in some cases it might be around a functional area in the organization and the teams interact as needed there can be lines between teams in between sub teams if you will it is an organizational structure that provides a ton of empowerment to individuals to work within a set of guardrails that you establish and it does reduce silos of communication and coordination much like a matrix organization one of the pros that's often talked about is greater collaboration between both team members and teams those teams are still focused on their organizational goals but the way they do that is they have flexibility to bring team members or those that provide those services in and out of their team as needed now one of the cons to this open boundary structure is leadership has to be super strong here and it does need to be distributed throughout the organization because you need multiple leaders that are in charge at any given time and for an organization that has a leader that you know really wants to be the one to say yes and no to things they want to be the decision maker for the non-profit this is not going to be a structure that's going to serve them well because what you need is you need individual leaders that have the ability they're empowered to make decisions on behalf of the nonprofit towards certain goals and within certain constraints but they get to make the decisions this really does open up the possibility for more of a real-time problem-solving approach to both program and project execution another challenge is because there's a lack of clear organizational structure that we're most familiar with reporting relationships with employees with team members can be difficult for them to determine really who has the authority to make a decision who is accountable for their performance who do they need to be communicating with regarding their professional development so it is something that really has to be thought of this can't be a wild west hey everyone you're your own boss go do anything that you want that's not what this is but it is neither vertical nor horizontal it is really more of an organic structure that changes over time to address different opportunities challenges and goals of a non-profit now when it comes to picking an organizational structure for a non-profit or maybe you already exist and you're looking at changing the organizational structure i'd ask you to keep the four stages of growth in mind those four stages are startup expansion consolidation and diversification and this is a natural cycle in most businesses and that includes non-profits in the startup stage typically we'll see more of a vertical or hierarchical structure because yes everyone's wearing a lot of hats but you've got the founder that has a very clear vision on what what that non-profit that they've started needs to accomplish to make the world better what is the social impact that's desired what are the goals what are the functions that are needed and so even in an early startup despite what it looks like there tends to be high centralization of decision making from the startup stage then you get to this rapid expansion and that rapid growth coming out of that startup stage is something that can make or break in a non-profit this is where rapid growth if we don't change how we do things and how we're structured where decision making lies if we can't allow others in the organization to make decisions on behalf of the organization we can only grow so fast rapid growth true rapid growth requires delegation and so while in the expansion stage we may typically see centralized structure that still may mean a vertical organizational structure we begin to see delegation and that may lead towards a matrix or cross-functional structure in the expansion stage now after a period of rapid growth things can feel a little unwieldy and so it's not unusual for an organization to then move into this consolidation phase where the things that were developed in all these different projects and programs there's a need to maybe consolidate a lot of times the administration functions or the common shared services in order to systematize processes better to increase your delegation maybe you're going to create more teams and departments maybe there's more depth in the lineup a lot of times that can still work in either a hierarchical vertical organization or a cross-functional organization it also could be that there are some areas of the organization that are more of a vertical structure and there may be some other parts that tend to be a little bit more of an open boundary structure so i hope you're starting to see that this isn't necessarily a one size fits all just picking one in the entire organization has to be that way as you grow and get bigger there may be kind of a hybrid of different structures that make up the right mix for your organization coming out of consolidation then kind of that bringing in those core and common things into a systemized uh process then there's typically a need to diversify again so it's kind of that expansion and contraction if you will there's there's this repeating cycle and in diversification again it it kind of leads you back to that startup stage again of hey let's we've got some new things we need to try let's look for new opportunities in the marketplace having everything centralized is going to feel like it's it's a hindrance it's it's really holding the organization back so now we need to diversify and that's where there typically is going to be a move towards a matrix or an open boundary structure as part of that reinvention of the organization so when you're choosing an organizational structure maybe take a look at what stage is your non-profit are you in the startup stage the expansion stage consolidation stage or the diversification stage well i know this has been a little bit longer of a video but it's important to really understand that this is just the starting point of picking an organizational structure for your nonprofit hey if you don't know what else to do stick with what we know and that's a vertical structure but do it in a way that you're empowering staff empowering them to serve your constituents to serve your donors to serve the world that we live in to increase the footprint and the impact that your nonprofit will have do some more digging we've got more details in the article on npcrowd.com and until we talk again have a great day and be blessed [Music]