“When confused, ask the customer.” That’s a classic Sam Walton quote – and one that points to solutions for how to organize for better productivity. This customer-facing philosophy is why our company, a marketing communications company, is organized around the customer – as opposed to being organized by function. This design may or may not work for your business. But for more than 20 years now, we’ve found that by being organized in client-based teams instead of function-based departments, we stay closer to the customer and eliminate a lot of internal conflicts. Here are some changes you might consider that to create an organizational model for delivering what the customer needs -- faster, better and at less cost.

1. Dismantle departments.

2. Re-organize in teams around the client with the specialists needed on the teams.

3. Move accountability from department heads to these client-based teams.

4. Move department heads to coaching positions. (Depending on your size, you may need to have “playing coaches,” meaning they play on one team and coach the specialists in their discipline on other teams.)

5. Hold coaches responsible for the recruitment, inspiration and education of the specialists in their disciplines. Coaches consult, guide, inspire and encourage these specialists, but do not take on the final responsibility for the specialists’ work. This accountability must remain with the individuals and within the client-based teams.

6. Install multiple mechanisms to give all individuals and teams liberal amounts of timely and constructive feedback from their peers, clients and suppliers on their work and interpersonal performance.

7. Eliminate conflicts of interest related to income for alignment of financial goals. (This is the Mother Lode!

8. Promote an understanding that physical location and size of workstation do not relate to seniority or power.

Some may fear allowing this much flexibility and control. But I truly believe, and have been shown, that the more you trust someone, the more they trust you. And it’s trust that is the foundation for successful businesses.

If you’d like more details on how and why to organize around your customers, you’ll find more information at www.pyramidsaretombs.com.

Small business trouble can mirror what’s going on with large companies and the stock market.

Unfortunately, I got a dose of that this past fall. I suspect many of us small business owners will be working through these problems in 2008, and I’d be interested to know what others have done in response, or done to prevent it.

A major customer of mine declared personal bankruptcy while owing to my company a significant amount of money.

Up until that time I had known he was having trouble paying the bills, but I had taken comfort in a few things, such as...

1. His history of good communication about bill payment
2. His significant net worth
3. His strong credit history
4. His assurances his company would pay all its bills, in full

The bankruptcy took me by surprise, and in the short run caused my business a significant disruption. Worse, he lives in Florida, a state that is known for being friendly to people declaring bankruptcy. He can keep his $800,000 house in addition to his nearly $3 million net worth because it is held mostly in retirement accounts.

His main problem, I found out later, is that he owed far more to at least one other company than to mine, and he could not negotiate his way to a settlement of the debt.

My mistake, I realize now, is in not understanding how indebted he was to another company. Even if he could have reached some reasonable agreement with me, he still had the other major creditor hanging over his head. I never should have exposed my company to him in the first place.

I went through the well-known stages of grief (denial, anger, bargaining, depression, acceptance) after I found out.

The research that would have been required in advance of extending credit to him would have been difficult. But I’m now extra vigilant about this happening in other situations.

In the end, there is not a ton I can do except move on and try to avoid this kind of thing disrupting my business again. Any Bizbox readers have this happen to them?