Building for scale - how to build a global organization from the ground up by Amanda Whiteside

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Building and Scaling a Global Organization: A Guided Insight

Welcome to our resourceful guide on how to build and scale a large global organization. My name is Amanda Whiteside, worldwide customer optimization and Enablement leader at AWS. Throughout my career, I have garnered considerable experience observing different organizational structures and how they operate on a global scale. This blog post shares my insights and experiences with you, to offer a fresh perspective on organizational design challenges and potential solutions. Ready? Let's dive in!

Why Discuss Organizational Structures?

Every organization is in a constant quest to create the perfect organizational structure. But it's not always clear-cut. You have different territories to consider, varying local marketplace requirements, and the delicate balance of centralizing your operation while allowing for regional flexibility. From my time at Hello Fresh where I headed UK Sales, to my current role at Amazon Web Services (AWS), I've observed the functional, divisional, and matrix structures at work.

Functional Structure

In its simplest form, a functioning structure sees each department or sector reporting to a clear leader, such as the CEO. This structure is most common in start-ups and businesses at their early growth phase. However, this structure may lead to siloing, with different departments working independently and potentially duplicating work.

Divisional Structure

The divisional structure comes into play as businesses scale into new markets or extend their reach across geographically dispersed areas. Here, you have a clear leader for each business region which allows for division-specific innovation and decision-making. However, regional duplication and differing growth phases can complicate this structure.

Matrix Structure

Most recently, many organizations are turning to a highly matrixed organizational model. This model seeks to balance the need for regional fixture with global coordination, often providing a consistent customer experience. This structure can pose its challenges, including regional duplication and managing teams in different growth phases. It also requires a special skill set to effectively navigate through its complex dynamics.

Organizational Structures: Pros and Cons

Functional Structure Advantages and Disadvantages

The functional structure is straightforward and often clear-cut. Each team has a clear leader and specific priorities. However, this can also result in silos and tunnel vision where departments can become detached from the rest of the organization.

Divisional Structure Advantages and Disadvantages

The divisional structure allows for expert focus on regional requirements, enabling quick and localized decision-making to cater to individual market needs. However, cost implications can arise when there's a duplication of functions in each region. This might also lead to a failure to benefit from economies of scale.

Matrix Structure Advantages and Disadvantages

Matrix structures encourage global thinking and collaboration amongst teams. They allow you to pool together specific skills from various markets into one team. However, having two managers (a global and regional head) can necessitate compromise and negotiation, and introduce difficulties in decision-making and accountability.

The Local versus Global Debate

Determining what aspects of your business will be managed locally and what will be managed globally is an important step in the planning phase. This involves asking questions about the speed of your business sector, the presence of local assets, the relationships between teams and the approval process. It's important that organizations develop local relationships but also shift towards more centralized leadership as they scale.

Steps to Building a Successful Global Organization

  1. Recognize trends and anticipate changes as the business evolves.
  2. Determine what needs to be managed globally versus locally.
  3. Grant autonomy to local teams where necessary.
  4. Create an organization around business needs, not around individuals.
  5. Embrace effective change management strategies.
  6. Establish governance over the new organizational design.
  7. Establish a mechanism to connect your team directly to the customer.

Ultimately, building and scaling a global organization requires continuous evolution and adaptability. It involves observing the successes and pitfalls, understanding how to navigate your organization's complexities and challenges, and learning how to innovate and iterate organizational design regularly. Remember, good organizational design revolves around the business, and if it's done right, it will always benefit the people.

In Conclusion

An effective and efficient organization is an evolving one. So take a moment to self-reflect: Is your current organizational structure working? If not, what steps can you take to improve it? How can you design an effective organization and what are you willing to compromise to achieve it? Feel free to reach out to me on LinkedIn with any questions or insights on this fascinating topic. Your input will be highly appreciated!


Video Transcription

Well, thank you everyone for having me. I'm thrilled to be here and excited to be talking about this theme today. I really appreciate everyone taking the time out of their day.Uh So today we'll be talking a little bit about the fundamentals and pitfalls of building and scaling a large global organization. And as I haven't already introduced myself, my name is Amanda Whiteside and I lead a worldwide customer optimization and Enablement for Aws. So why am I here?

Well, I have a little bit of experience in, in this topic and, and something that I've become very passionate about over my, over my career. Uh and a lot of the jobs that I've worked in have given me a slightly different perspective on organizational design and helped me see what has worked and what maybe hasn't worked as well as just the general challenges of organizational design. It's something that I think every company tries to iterate through and work through. And I, I wanted to share with all of you some of what I've learned as well as hear from you how your experience has gone in your organization and, and what works well and what doesn't, so please feel free, uh, to add anything you'd like in the chat today. So, one of, uh, or a couple of the most recent roles that I've had, I guess, uh, go back to my time at Hello Fresh where I led UK Seals. And what was interesting about my role here. I led direct sales, uh, which was really a start up fees for Hello Fresh trying to get in front of as many customers as possible. And really in that structure, we were very functional.

The CEO was, was really the head of the business and, and each function sat under uh the CEO. So you maybe had sales marketing, uh our tech team and our B I team and et cetera, et cetera. So those teams all worked with a very clear leader, a very clear remit and, and often is the case for for a start up or businesses that are in the early phase of their growth. Then I moved into Amazon shipping, very fast growing business, lots of complexities trying to scale across multiple G OS. And I started to build uh a large uh program and product organization that really supported very different and very highly localized needs of, of each specific business.

And therefore, my experience versus resh became very different uh versus a very simple format uh to something that started to, to navigate more, more complexity and a more of a divisional model. Most recently, I've moved to aws where uh that they're really supportive of a highly matrix organizational model. And it's really because of the amount of, of GE Os that we work in today and making sure that we provide a consistent experience for our customers. But equally a matrix organization is something that requires a different skill set to try and navigate. What are my observations? A couple, I have plenty, but here are a couple uh regional duplication is, is something that is very difficult to, to navigate. And it's something that just comes naturally uh as, as you start to scale. So if a business is centered within one go and you start to launch additional new markets, uh each of those marketplaces will try and do something a little different. They should, there's an opportunity for new innovation uh accommodating and, and looking out for any local nuances. But what you'll find is there's, there's a pull between the ownership model there and duplication. You're having seen people in CG OS doing doing somewhat similar things.

So there's always something to learn from how you try and streamline that. The second is different growth phases, you're launching different businesses at different times, you've got mature businesses versus just once they're in start up mode, and it's very difficult to bring those together when they are in different phases and they really need to be accounted for um and allowed to go through those phases in the right way.

Lastly, iteration can be ugly. I haven't seen a case where someone has sat down and built an organizational structure and said this is not gonna last me the next 10 years. It doesn't happen. It's really important that you know, that your organizational structure evolves over time and takes time to get right. And therefore really need to invest time and constantly looking at the organizational design thinking about how it's set up, how they can iterate on it as opposed to a building in the background, to something that's quite problematic and then becomes a big buying change where you have to completely restructure uh people's organization and their roles.

So when we look at mckenzie, uh there was a recent survey for over 300 executives that said only 44% agreed that their organizational structure created clear accountabilities, which is crazy. Uh This is something that gets in the way of people's jobs of how they feel about their jobs, of how they can deliver. And again, it reemphasizes my point. It's just how important it is to get this right. So what does it mean for people? Uh poor organizational design can mean uh the unworkable job. And I'm I'm sure some of you have experienced this, you started with the manager with a clear responsibilities perhaps outlined in the job spec and then you suddenly find out that things have been bolted on. You've got a new remit, you have to work over multiple time zones and it just becomes unsustainable for employees. The second is over regulation. We can find ourselves in a position particularly with the matrix organization where multiple leaders need to be involved in the approval making or the decision making. Or perhaps it's not clear how many leaders need to have approval and therefore you go searching for however many people need to sign something off. This then inherently causes delays. The third is lack of one voice.

Uh with multiple leaders involved, multiple teams, uh you can be pulled in different directions. Often, this can be called uh competing priorities. When actually there just needs to be a single voice that is telling the organization what matters and getting those teams with the right assigned ownership and accountability. All of this leads to confusion and stress and failure to share any ideas. If managers are not able to navigate the complexity, it can mean leading to employee attrition. So let's take a little look at the different organizational structures that exist today. Um If we look to the last functional structure, this is what I outlined in my time at Hello Fres, very simplistic uh CEO model, multiple functions reporting and uh gives, gives quite clear accountability, divisional structure that really looks at uh how a business is set up perhaps by region.

So maybe you have a North American business that has all of those functions that went underneath them and they work as their own entity. And then matrix structure, this can often mean that teams have two bosses. Uh And it is something that requires a completely different skill set.

We're seeing more and more global organizations move into a matrix model. And, and I don't think we, I think we can be better at helping teams and organizations understand how, how it's important, why it's important and the benefits it'll bring as well as how to navigate it because it's very different to the other two. So a little diagram here on the functional structure, exactly how I said CEO multiple functions really simple. There's some advantages to this, of course. Uh If you're in a a tech function, you have a tech leader, you're with your community, you have very clear priorities uh and also promotion process is better because everyone can see what good looks like. Uh And there's a clear decision authority, but there are always disadvantages to these things. Sometimes you can get completely siloed from the wider organization kind of in your own bubble, running your own initiatives, but very detached from the wider strategy and from some of the other teams that exist.

This often means that you can develop some tunnel vision and means that you're maybe not coming up with the ideas that the business really needs at that time. So let's have a look at divisional structure. It starts to get a little more complicated. Now, as I said, you're looking at, excuse me, uh each function can can report into a specific region. So for example, here ma would have a sales team but so would North America, Latin America, a pac et cetera. And this means a Maya in a sense, can work entirely in its own model in its own structure. Uh But of course, that's where you have some some pulling and differences and say branding in how the product is launched, it means it's harder to reach across and build a global product where possible because each business uh exists in its own entity, but it has some advantages.

So as I said, each one operates separately. It's a good thing, but it can also be a challenging thing. Um That localization is really helpful because it means that you become an expert in your own region. So North American folks know exactly what North America needs. They've done the benchmarking, they've done the research, they're often in, in country and therefore they can apply the expertise and do what customers need quickly um disadvantages. And one of the key disadvantages for this model is, is the cost of headcount. If you're duplicating multiple functions in multiple regions, you're gonna find that the business becomes overloaded with excess headcount. Often doing a lot of the same things. If you think about something like a pitch pack or a new product that needs to be launched, each business is going to try and do that independently when actually, if they collaborated and one team did it, it would be much more effective. You also lose the benefits of economy of scale. Uh even things like procurement and purchasing. If each team are trying to purchase something like sales force, uh they would go in, they would purchase it and they would find out that actually if they combined their efforts, they would get a better cost and finally made for sure.

Uh Please chime in on the chat if it's something that's new to you, I'd love to see it. Uh But, but really how matrix structure is working. And I think this is also an evolution is you have these kind of regional models. So if you look on the left, you'll have a Maya North America Laam and, and they still have all of their own responsibilities. So sales, marketing tech finance, for example, but then you have a worldwide leader that, that cuts through that. And essentially the idea here is that if you take worldwide tech, for example, the worldwide tech leader is going to get up every day and think about worldwide tech, they're going to think about global solutions, global models, uh global um products that are really gonna solve for the global customer where the benefit of that is when you work with uh those those in recently like a Maya, North America and La la Ta, you're gonna see that they are able to then bring a lot of that local nuances, the local information, the local customer up into the worldwide tech org so that they don't, they don't create something that isn't relevant for that particular market.

But it means that the, the model has two, has two bosses or two managers, like I said, so that tech team would have to not only report and speak to the worldwide tech leader, but also each of those in region leaders to. So when it's created and it takes some time, uh it can have a clear objective. This idea that someone is thinking about the world is, is a very big deal and it stops some of these siloed uh teams or silo GEO s and tries to streamline those efforts so that they are more effective. Um You're also bringing particular skills and knowledge together. So instead of having an individual marketing department reporting into a CEO, you're bringing all of those marketing teams together under a worldwide leader. So you're getting such cultural diversity, such inclusion across lots of different marketplaces and teams to deliver hopefully a solution that the council for all.

And we'll talk a little bit about that later. Some of the disadvantages I mentioned it working across two bosses. Um And this skill set that is very new to a lot of us of how do we compromise and negotiate. Uh You almost have to put your ego at the door in a matrix structure because it will be the case that there's a lot of collaboration more than what you would have been used to and, you know, that can, that can have a pull on the organization, but it also requires you to really over index and, and earns trust and, and, and ownership and giving it out and using it where, where it's clear so that accountability becomes even more vital.

Oh, sorry. Um I just wanted to put this quote here. Uh And really what it says is when you have a global offering, it's much easier. If you, if you're selling a set of steak knives, then it should be fairly easy to put it on a global marketplace and sell it as standard. However, when you have a local business, it requires a lot of local thinking. It, it maybe needs local resourcing, local NGO fulfillment center sort centers. Uh And, and that can mean that it's not always a one size fits all. So how do we think about global versus local? Uh Well, here are some questions that are worth asking. Uh The first one is how fast paced is your business sector? If you need your teams to be on the ground, listening to customers able to react quickly, having a local team, there is super important and giving them that autonomy to make those decisions is also important. The second is how much does your business depend on local assets? So if you need local procurement, if you need services that are in, in, go, how how dependent are you? That, that means that they will always remain there and, and anything local that you build needs to account for that. The third and the fourth are, are more about the relationships that you build with a local team.

Uh And, and I've seen it in the past having that close relationship with local teams couldn't be more important. I've seen how successful it is when global teams and local teams collaborate and they're all working towards the same vision and they really appreciate the differences in country four is how do you expect to be involved in the decision making? Autonomy means that you give them the ownership, that they can go and solve something when they need to. But do you still feel like it needs to be communicated to the global organization? And how does that work? It's really important to get ahead of time and really spend time with these teams to set and outline those expectations from day one. It can also be an evolution. Like I said, in the beginning, these things don't stand up from day one and then exist forever. Uh I think in every case, it should be an evolution, in fact. Uh And, and I would almost say when you're starting off in that kind of hello fresh phase where the business is growing, that structure, that functional structure works really well. But then as you start to build into new G OS multiple regions, you need to start considering how you streamline and you don't have different organizations building the same things in different areas.

Then number three, thinking about centralized leadership, bring in a worldwide team, get them to start to move that thinking towards less uh kind of local centric and more into. Well, what would the world say? Would this work in North America? But would it also work in AA if not? Why not? And having those honest discussions, if you find that you haven't iterated through this, it could be that you need a, a full reorganization or hopefully you can iterate to get to the point where it becomes a very natural evolution for your business. So doing it in line with as the business grows, you can also see your organization evolving and changing as well. So if I summarize some of the steps to success, um I, I think these are, these are really important uh recognize the trend that you're seeing, recognize the fact that the business is evolving and changing and your organization needs to change too. I, I've seen businesses before kind of sit in a silo and, and not think about organizational design and before they know it, they can't deliver on what they outlined because they just didn't see it coming. So try to plan ahead, be clear on what needs to be global.

And this is a fascinating topic for me. Um because there's lots of ideas that 80% of things can be global, 20% can be local. Maybe it's 9010, maybe it's 5050. Uh but where can we land and how does that work and, and help, help change and improve the organization as we see it. But really sitting down and, and working out those processes, policies, products from day one and then constantly revisiting. It is key where it does need to be local, let the teams be local, let them have the space to be able to do and, and run whatever they're accountable for and support them in whatever way is possible. Try to have that closed collaboration for uh build the business for the business. Uh I know it can be really hard. You hire a superstar and you want to put them in the right place, but you don't know what their job is today. It's really important that we don't build an organization around people. We build it around the business needs and the business outcomes in a sense. If it's done right, it will always benefit the people. So something to really think about there. Uh five is embrace effective change management.

I know it's something everyone is trying to get much better at. Uh the pandemic taught us a lot. But effective change management is a real skill. And it's something that requires dedicated project managers, program managers to really help navigate and communicate out to teams.

Then once that change is made, thinking about the governance how do you keep the model that you have designed intact? And when there's challenges, how can you get ahead of them? So it doesn't spiral out of control. Sometimes this can be its own PM O. Sometimes it's just uh assigning a couple of folks in your team to, to own this as a side project. It depends on your business and last is establishing regular mechanisms that collects your team directly to the customer. So what I mentioned earlier by bringing uh local NGO teams with worldwide teams together listening to the customer, what does the customer need constantly bringing yourself back to make sure that you're focusing on the right things? OK. So in closing uh some things to ask yourself is the way your organization designed today effective. Is it something you know, who to speak to, you know, who to work with and you don't find yourself having turn great if you do, if you don't, how can you help improve some of the organizational structure today? How can you yourself start to design your own organization? This can be even with the three people you work with today and the teams you collaborate with. It doesn't always have to be your reporting line.

And how can you bring a new solution to your manager to your leadership to say, hey, I'm thinking about this differently because I guarantee they'll be open to the conversation. And lastly, what am I willing to negotiate or compromise on to build an effective organization. I said you sometimes have to leave your ego at the door. I've had things that have existed in my organization and I've just had to hand them off. You know, I maybe built them from day one. They mean everything to me. I love the team that work on them, but actually they fit better over there. So, really thinking without bias, what is the right thing for the business and, and everything should fall into place? Ok. Well, thank you everyone for joining. Uh If you have any questions, uh feel free to connect with me on linkedin wherever you like, I would love to hear from you and continue uh this fascinating topic and, and hear a lot of your other ideas and perspectives.