A fractal organizational form is best suited for environments in which projects are acquired and handled in a creative manner. But what actually is a fractal organization and how can it be formed?
The essential characteristic of fractally organized structures is that decisions are not made at the top and not at the intersections, but are formed in communicative, factual exchange in the teams, between the lines so to speak.
The emergence of fractal organizational forms can follow the following pattern: First, depending on the character of the business, the essential processes are identified. In the case of a contract manufacturer who continuously delivers into existing supply chains, different business processes will be relevant from those in the case of a plant manufacturer who operates purely in the project business or in the case of a service provider. These processes are then designed in a practice-oriented manner.
In the next step, all the functions required to execute these processes are determined and created in the markets. The same processes are then created in a structure tree at each higher level, also in an identical manner, and assigned resources. The number of structural levels depends solely on requirements and should be kept as low as possible to limit structural costs. Where no added value can be provided for the next level down, there is no need for corresponding effort. This added value should only consist of orientation and relationship gain, but not of formal leadership. The levels are therefore not to be understood in the sense of the classical, hierarchical line organization, where it is a matter of reporting lines, but are to serve exclusively the summary of connections.
The proximity to line organizations makes fractal organizations susceptible to “backsliding” to line management. If you want to implement a fractal organization, make sure that your workforce is carefully prepared from a cultural point of view and that there is a real willingness and ability to make decisions on the ground, and that this culture of on-the-ground decision making is accepted and encouraged by the connecting staff at the next level up.