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Getting the Right Work Group Structure

In less than 10 years, online shoe retailer Zappos.com has become known for its unbelievable customer service. Recently acquired by amazon.com for a cool $1.2 billion, Zappos.com has successfully created a buying experience where it expects customers to return many of their purchases. After all, people need to try shoes on to see if they fit, let alone know whether they like them.

Although 95% of Zappos.com's transactions are online, management knew that customer service was crucial to success. So they set up a call center that would support a satisfactory buying experience. How they structured that call center reveals the importance managers should place on how they set up groups to do work.

Last month we identified 4 specific work group structures: single function groups, job shops, crews, and teams—each distinguished by the known inputs and desired outcomes for the work, and the transformations required to get to those outcomes. This article will focus on specific examples of how these group structures can be successfully implemented.

As mentioned last month, NASA had tremendous success in the 1960s because of its ability to use teams to tackle problems where neither the inputs nor the actions needed were known. These teams, however, were not ubiquitous or necessarily permanent. In fact, at the same time these teams were tackling any number of problems, other group structures were also being used.

For example, the astronauts themselves operated primarily as a crew, with each member having specific expertise needed for the mission. But, as the movie Apollo 13 depicted, when an explosion altered the flight plan of that mission, the astronauts sometimes had to reform into a team (their crew assignments rendered temporarily unimportant)—such as when they worked to custom-build a CO2 filter device.

Health care provides another example. For decades the typical medical practice has worked in a job shop structure, with the general practitioner acting as a hub for various specialties. This makes sense for numerous maladies, since doctors who specialize have clear knowledge of how to treat specific problems (e.g., remove tonsils). All they need is an initial diagnosis; the starting conditions are unknown until that diagnosis can be made by the first consulting physician.

If a condition warrants surgery, the surgical group is most likely to be structured as a crew. That is, each member has a specific function and they rarely deviate from it. They know exactly what they are starting with, like a bad appendix that needs to be removed. Some surgical units must be structured more as a team, such as when they do exploratory surgery. These surgical teams will tend to require a more experienced group as they tackle problems through discovery.

For years, McDonalds perfected its crew structure in taking and filling customer orders. Built on standardization and a consistent menu, orders for known menu items were filled by the crew. Most fast food restaurants have copied that model.

Five Guys Burgers and Fries, however, saw this group structure as limiting. Rather than force customers into a limited set of menu options, Five Guys INVITES custom orders, including what specific ingredients go on each burger. One person takes these custom orders (an unknown input) and sends them to the four job stations: 1) burger cooking, 2) burger and ingredient assembly, 3) condiments and wrapping, and 4) fry cooking, order packing and delivery. By introducing a job shop structure, Five Guys has had tremendous success in a mature business.

That same job shop structure is commonly used by call centers, where phone menus lead callers through options to guide them to a job group specializing in their problem. Zappos.com, however, structures its call center (about 400 people in their Las Vegas headquarters) in a single function structure. Zappos sees "every interaction [phone conversation] as a branding opportunity." Call center reps have a very clear accountability: satisfy the customer. Reps are trained to handle most any situation themselves to meet that clear goal.

Transformations are greatly simplified this way because the call reps can focus on the customer; it is their single function. This group structure has helped create a competitive advantage for Zappos. Rather than endlessly rerouting customers through frustrating on-hold queues, Zappos reps have the authority to resolve issues to customers' satisfaction.

Take the time to think through what must be accomplished, and what is known about the inputs and transformations. THEN, decide which work group structure is best. And be aware that changing conditions may require changes to the structure as well.

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