Creating a Structure

When you divide a whole into its parts-whether it be a physical whole or a conceptual one-you must make sure that the pieces you produce are:

- Mutually exclusive of each other

- Collectively exhaustive in terms of the whole.

I abbreviate this mouthful to MECE, but it is a concept you no doubt apply automatically every time you create an organization chart (Exhibit 24).

Mutually exclusive means that what goes on in the Tire Division is not duplicated in Housewares, and what goes on in Sports Equipment is distinct from both. In other words, no overlaps. Collectively exhaustive means that what goes on in all three divisions is everything that goes on in the Akron Tire and Rubber Company. In other words, nothing left out.

If you apply these rules when you divide, you can be sure that the structure you create shows all the pieces that must be described if you are to explain it to someone else. Structural order at its simplest, then, means that you will describe the pieces of the structure as they appear on the diagram.

But how do you know what order to put them in on the diagram? This question most frequently arises when people draw organization charts. The order you put the boxes in will reflect the principle of division you employed to create them.

There are basically three ways to divide the activities of an organization-by the activities themselves (e.g., research, marketing, production), by the location in which the activities take place (e.g., Eastern Region, Midwest, West), or by sets of activities directed to a particular product, market, or customer (e.g., Tires, Housewares, Sports Equipment).

- If you divide to emphasize the activities, they reflect a process, and thus go in time order.

- If you divide to emphasize location, they go in structural order, reflecting the realities of geography.

- If you divide to emphasize activities relating to a single product market, you have classified, and thus the ideas go in degree order; by whatever measure you decide is relevant for ranking (e.g., sales volume, investment size).

Suppose you had created this set of Departments in reorganizing a city government:

1. Housing

2. Transportation.

3. Education

4. Recreation

5. Personal Health

6. Environmental Health

These are all the activities for which you think the city should be responsible, placed in the order in which the city government would have to be concerned about its populace if it were starting the city front scratch. Forcing yourself to impose an order of this sort, particularly if you are creating something new like an organization, permits you to check that you have been collectively exhaustive for your purposes.

In dividing things other than organizations, however your purpose is generally to analyze how those things function. You me therefore dividing by functioning part, and you would show the parts in the order in which they would be expected to perform that function. Thus, if you were discussing a radar set, you would order its parts to reflect the order of their functioning:

I. Modulator

2. Radio-frequency oscillator

3 Antenna with suitable scanning mechanism

4. Receiver

5. Indicator

The modulator takes in power that the oscillator then gives out. The antenna concentrates that power into a beam, the receiver takes signals passed back from the beam's scanner, and the indicator in turn presents the data.