In electrical circuits, a lack of voltage (or tension) means the current doesn't flow and the lights stay off. Without some degree of competitive tension in an organisation the juices don't flow either, which means no-one is getting excited when stuff happens.
Some organisational tension is good, and will help with productivity. It will also create a more challenging environment, which is what people thrive on. So when you're thinking about the design of your org chart, consider where you want the tension to be.
For example, imagine you are building a Customer Service department to handle customer queries and complaints. If you're shipping a tangible product this may also include warranty, repair and refurbishment. Even customer self-repair strategies.
Who do you want the Customer Service lead to report to - the choices are often you (the CEO), the Chief Operating Officer (COO), Development or Sales? Logic might steer you towards the COO because s/he is responsible for the supply side of your business, and Customer Service is quite close to Development and Product Management. They all need to work hand-in-glove to get the next product successfully launched.
However, I prefer to think that Customer Service is the internal advocate for the customer, which means they need to have teeth. They are tasked with ensuring the customer has an amazingly positive experience when things go wrong. That isn't going to happen if they have their legs constantly pulled out from under them by their Development/Supply-side masters. They put forward a proposal for some kind of customer improvement, but it's too costly or resource hungry and gets canned.
So I like Customer Service to report to Sales - the demand side of the business; they establish the customer need post-sale and drive it into the heart of development. And if they fail a product release because of inadequate customer service planning, we don't ship, although that only happened once - it was too painful to repeat! Having the department report to Sales has an additional benefit that the Sales Director becomes a bit more knowledgeable about after-sales care when sitting with a customer and is able to sell the benefit.
And don't think competitive tension is the exclusive preserve of senior managers - it works just as well further into the organisation where decisions based on conflicting requirements need to be made.
Think about how you might structure Sales & Marketing, for example.
You don't want to build a cosy organisation where things slip through on a nod - that's not where competitive advantage comes from. Think carefully about your own org structure, where you want the points of tension to be - and then wire it up.
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