Lead on Purpose

Promoting Leadership Principles in Product Management

Choosing a team structure to achieve top efficiency

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Whether you are a small startup or an international corporation, HR management and organization presents an equally important matter. Choosing a proper team structure for your hierarchy and management isn’t as simple as it seems.

There are numerous factors to consider from your own number of employees and managers to the amount of projects and clients you are tackling. Without getting into the details of HR management, let’s take a look at some of the most popular and widely-known solutions for team structure and management.

Team Structure

Why bother with a team structure?

You might be thinking why a team structure is even important in the first place? You never heard your partners or stakeholders talk about team management. All you really have to do is assign project managers to teams and let them do their work, right?

The truth couldn’t be farther from it. What are the significant benefits of paying attention to what type of a team structure your team leaders are using?

  • Your employee retention will be significantly raised due to their satisfaction with careful leadership and management.
  • Overall productivity will be higher and tasks will be done much faster due to clearer communication.
  • Your project managers will have an easier time tracking work and coaching employees for further promotions and specializations.
  • There will be significantly less confusion and dead motion in your office thanks to a clear division of labor.
  • As a result, your revenue streams will expand and new partners will be knocking at your door.

Now that we have a clearer picture of the benefits of using specific team structures for different means, what do these structures look like? How can we properly implement them without causing confusion or resistance from the staff?

  • Functional team structure

The most common type of team structure is the one you might be using already. A functional structure is based on a clear and distinct division of employees into their respective departments.

This structure is commonly used but inefficient in today’s corporate climate. Employees in companies that use this structure are fairly divided into teams and specialize in their own tasks without paying attention to what other teams are doing.

Clients, customers and investors want to see ingenuity and out-of-the-box thinking – not traditionalism and old habits. Functional teams can be safely implemented and used if your company is still in its infancy, allowing you to closely monitor different teams and not mix them up.

  • Cross-functional team structure

If a functional team consists of people with same expertise, it’s obvious where a cross-functional structure lies. Cross-functional teams are formed based on the needs of the project. This type of structure is common for creative teams that work in the digital space, like paper writing services or marketing squads.

Team members in these teams are often of varying skillsets, expertise and knowledge in their own field. What separates cross-functional teams from the former is the thin line that separates individual teams – or lack thereof.

These structures are possible in smaller environments such as startups and small businesses. Large corporations prefer using functional structures because of their simplicity, while smaller ones can’t afford to hire so many people just to fill their ranks.

  • Matrix team structure

If the previous two teams seemed too simple and basic, the matrix team structure makes up for that in spades. Matrix structures differentiate themselves based on their dual leadership method of conduction projects and tasks.

What this means is that there is a “horizontal” and “vertical” leadership hierarchy that team members and leaders have to abide by. Each team in the company reports to two managers which then come to a mutual solution or a choice on what to do next.

This is a great structure for companies with more managers than office staff (proportionally). You can employ two or more managers for each individual team but separate their responsibilities based on different areas of the project (IT, HR, design, marketing, etc.)


When these three structures are put together side-by-side, you can see clear distinctions, pros and cons of each. Every team structure corresponds to specific company needs – none of them are perfect or wrong to use.

Consult your project managers and choose the structure that best fits your existing resources and goals. Having a clear understanding of workflow and management in your own company can pay off in spades.

Image Source: https://www.pexels.com/photo/adult-casual-collection-fashion-296881/

Questions: What structure works most effectively for your team? Please leave a comment in the space below.

James Scott, professional marketing executive and co-founder of American academic assistance company Essay Supply. He is passionate about healthy management practices, agile development, and value the customers as the most important persons for the company. Follow him on Twitter: twitter.com/@james.scott.esp

The Product Management Perspective: As a product manager, you need to be flexible and work effectively with many different team structures. Take the time to understand how the teams you work with function and how you can interact with them effectively.

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