Companies shouldn’t focus so much on formal structures that they ignore the informal ones.
A few years ago, the world’s leading designer and manufacturer of office products decided that it needed an organizational overhaul. Coordination across product lines was poor. Design teams collaborated ineffectively. Key personnel were remote from customers. The company responded in part by reorganizing its work space, creating an office-free “village” where designers and architects could mingle and collaborate and customers could visit easily. Proximity does matter for promoting collaboration, and the space was conceptually compelling and visually appealing. Yet it failed to spark meaningful innovation or closer relationships with customers. Four and a half years after the building opened, management decided to revamp the work space again.