Consulting Firm Organizational Structure
When people are looking to bring in a consulting firm, they usually envision a fast-moving, agile company that has its eyes on the future. However, if your firm was founded more than a few years ago, there's a good chance that it's still mired in the 20th century.
In the past couple of years, a growing number of companies have abandoned rigid organizational structures developed during the Industrial Revolution in favor of future-oriented, organic structures that can change as needed. This is ideal for consulting firm organizational structures. In a 2017 survey by Deloitte, 88% of the companies surveyed responded that building an organizational structure for the future is an important or very important issue.
Deloitte, the largest professional services network in the world, appears to use a functional organizational structure. Its tree-shaped organizational chart is clearly divided into six divisions based on the services and solutions it offers:
- Audit & assurance
- Risk advisory
- Financial advisory
- Tax & legal
Deloitte itself has been recommending that organizations abandon the functional organizational design for several years now, recommending what it calls a team structure. In other circles, this would be called an organic structure.
A team-based structure is also sometimes described as an organic structure or a flat structure. What differentiates this type of structure from more traditional, mechanistic structures is that they are decentralized.
Instead of asking, "For whom do you work?" it would be more appropriate to ask people who are working for these companies, "With whom do you work?" For a consultancy firm, this answer could change from week to week. Instead of a tree, the modern consulting company structure resembles a series of connected bubbles.
A team structure can still resemble a functional design when it's drawn in a diagram or presented to clients, but people should be able to move from one position to another as required by any project. If a firm's managing partner or a new hire fresh out of college is the best person to take the lead, a team structure facilitates that.
A team structure is usually best for companies that are in a fast-moving industry, and with the pervasiveness of digital technology, this is just about everyone today, including consulting firms. Employees are more empowered in firms using this structure and are usually closer to the top decision makers than they would be in a hierarchical organizational structure.
Employees aren't the only ones to benefit from this structure, though. Senior partners also benefit because they are no longer resigned to their traditional hierarchical roles. Instead of being tied to a desk managing the organization, partners are free to engage in projects in which they have experience, and when the project is over, they can go back to being the VP or managing director or start another project with a new team.
A common complaint about team structures is that when the organization shifts, the chain of command gets fuzzy. However, this would seem to be more of an academic argument than a serious disadvantage. In reality, few employees fail to understand who signs their paychecks or who is in command.
As Deloitte points out, the biggest problem is actually making the shift from a hierarchical model to a team model. Partners and managers may need to develop new skills in systems thinking while abandoning structural models that were developed in the last century. Leaders need to be more hands on in order to understand what is going on in the firm and what their clients are doing.