In the annals of corporate management, one unheralded name is Dan McCallum. Working at the Erie Railroad in the 1850's, McCallum was asked to come up with a corporate organizational chart. To accomplish this task, he copied what he saw in the Union Army. In doing so, he produced the first corporate organizational chart. It looked much like what we use today in that it had the CEO on top and a hierarchical structure underneath that rolled down by divisions. The problem is that while a typical organizational chart is helpful on detailing authority, it is not much help for anything else. In fact, it can be argued that the typical organizational structure inhibits collaboration by placing everyone in silos and by creating a vertical command and control structure that does not work well on the horizontal. Loans reports to a CLO, while deposits reports to a branch manager or chief deposit officer. The result of vertical reporting is that often different objectives may be in conflict that is created only through an artificial organizational design. Enter Walk Disney. After about 20 years in business, Disney was tired of his organization getting in the way of itself. Like many a banker, Disney realized that most ideas never made it to market because 80% of the battle was within the organization. Instead of spending energy and resources on making movies, Walt had to spend time quelling infighting, managing egos and uncovering hidden agendas. Each group, Disney noticed, spent more time trying to protect their boss and their fiefdom than focusing on producing a superior customer experience. After producing Snow White and the Seven Dwarfs, Disney went to an organization structure as pictured above. The chart is recognition that it's the process that is the objective, not authority. While "Direction" is in the middle and has the final say in the finished product, no single part of the organization is more important and all must function together to produce the final product. Layout sometimes reports to Animation who sometimes reports to Ink & Paint who sometimes reports to Layout. The circular nature of the design helped instill the notion that reporting lines change and that authority is conveyed not out of formality or fear, but out of process and inspiration.
For banks, this is an important idea to keep in mind, as customer service, innovation and production are often hindered by the interactions of credit, risk, technology, sales, marketing and management. What should be at the center of a Disney-like bank organization chart is the production of the best customer experience for a desired level of profitability. Like a conductor in an orchestra or a director in a movie, the goal is to produce a quality customer experience at every turn. To do this, make the bank's resources revolve around a central group (they may not be the CEO or President) responsible for both customer profitability and customer satisfaction. Few companies in the world have melded profitability and customer satisfaction like Disney. In this environment of idea-based financial services, telecommuting employees and contract workers, resources such as risk and technology (that are leveraged by multiple functions) can be strained. Having an organizational structure more like Disney's may be just the thing to free your bank from rigid lines of authority and elevate the customer to the center of the action.