Promising new product initiatives and projects get derailed by unresolved dependencies. The bigger the company, the greater the number of dependencies and the more difficult it becomes to identify and resolve them.
Based on my experience, I think there are only two viable solutions to manage the inevitable cross-functional and technical dependencies of an organization.
Option 1: The CEO or a fully empowered C-Level leader is hands-on managing and auditing the details of every new initiative and is 100% empowered to resolve and decide every instance of resource contention.
Option 2- divide up the organization into separate, autonomous teams where the leader of each team is hands-on managing and auditing the details of every new initiative and is 100% empowered to resolve and decide every instance of resource contention for their team and interactions with other teams too.
In the early stages of Amazon, we could operate under Option 1. Every startup starts here, and this is the beauty of a startup. You do not have org structure problems because you are in a (hopefully benevolent) dictatorship. This is the most effective option, but only works up to a point— it tends to break once you exceed a few hundred employees.
We implemented Option 2 at Amazon in the early 2000s. Like any org structure, it wasn’t perfect, and it is impossible to eliminate every cross-organizational dependency. There were still resource contention issues to deal with at the C-Level. But the size of the dependency management problem was drastically lower than what I see at companies with traditional functional org structures.
The problem is that the CEO doesn’t have the bandwidth to be deep in the details of every new initiative. The inevitable dependencies and resource contention issues simply go unidentified and unresolved. The result is that it is tough to get anything done in the company.
The long-tenured employees have run into walls for so many years that they become frustrated and give up. They develop learned helplessness.
What is your experience? Have you worked in a company with a better way of managing dependencies and resource contention? Share your thoughts below.
