• Power or Organization Design
• Power of Strategic Alignment
• Power of Collaboration

Please feel free to forward this newsletter to others who would be interested in receiving it.

We welcome your feedback and suggestions for future topics. Contact us at: info@coastwiseconsulting.com

On a Personal Note: Some of you have wondered why you haven’t received View from the Lighthouse in quite some time. Thanks for noticing and missing it! The simplest explanation is that last December I moved, and the rest, as you surely know, is history! I’m still in Mountain View and love my new (to me) home and neighborhood. All my CoastWise contact information remains the same: tracy@coastwiseconsulting.com; 650-969-3535. 

During this past year, I’ve also served as co-President of the Organization Design Forum, www.organizationdesignforum.org, the only professional organization dedicated solely to advancing the theory and practice of organization design. 

---

As organizations become even bigger, more complex and interdependent, and pressured to achieve short term results, the consequences of a misaligned organization become apparent ever more quickly. And these adverse impacts are magnified—and harder to fix. One result of these factors is that the popularity of organization design and redesign, the process of realigning infrastructure to strategy such that it matches the strategy and enables achievement of results, continues to grow both in the frequency with which it is attempted and as a critical variable of competitive advantage. Reorganizations, the second cousins of redesign, have long been used to attain some of the same results. But they address only the structural aspect of redesign, so their outcomes are much more limited, while frequently being just as disruptive.

Redesigns are difficult, and in order for them (or reorganizations) to deliver the results that are promised or implied, they must be done with rigor and discipline. What follows are four practical considerations that are also important to attend to when attempting either—in addition to all of the other best practices that are increasingly known about the requirements for successful redesigns.

Caveat # 1: Don’t design an organization that you can’t populate. There are two parts to this counsel. First, remember that you are starting with essentially the same employee population that you currently have. Since it’s unlikely that you’re planning either to get rid of many of these folks and replace them with new hires or that you’ll add significantly to your current numbers or mix, you will need to be able to staff your new organization with the existing people and maybe a couple of strategically identified and carefully chosen newcomers. This can be good news, or bad. The good news is that you already know these people and their strengths and limitations, and if you’re honest in your assessments of them and realistic about how they could best contribute to the new organization and its requirements (these are big and important “ifs”), then you know what you’ve got, what to expect, and what’s required to best leverage their talents. On the other hand, putting “old” people into new jobs and organizations doesn’t produce “new” people. Without the right expectation setting, coaching, and interventions in other areas there is the risk that your newly designed organization will quickly and alarmingly resemble the previous one, plus you’ll have a lot of other hassles in the process. Things may actually get—and stay—worse.

A corollary to this caveat is to watch out for too many boxes on your new org chart that are designated “TBH” (to be hired), especially in key contributor and leadership positions. If it will require many newcomers to make your new organization work as envisioned and specified, then what you have in reality is a major transformation.  Unless you’re intentionally planning to do a “DJ” (dynamite job”) on your organization—blowing it up and rebuilding—bringing in too many new people at the same time has a significant destabilizing effect from which it can be difficult to recover. It takes time and other resources to find the right people and on-board them; for them, with the help of others, to figure out how they can best and most effectively contribute; and to manage them, their entry, and the need to align and realign. While this is going on, others in those parts of the organization will often wait and see, slowing momentum, delaying progress, and adversely impacting productivity.

The learning here is that the best, most elegant organization design is useless and at high risk of failure without the people to energize, implement, and enable it. A rigorous assessment of which positions are most critical to the success of both the implementation of the new design AND the organization going forward is essential, and if you don’t have the people and don’t know where to get them quickly, the best course is to change your design to something less ambitious and make the necessary changes in stages.

Caveat # 2: Don’t design an organization that you can’t or won’t implement. In our experience, not recognizing that a new organization design or even a basic reorg (i.e., structure change) is a significant organization change initiative that requires thoughtful, careful planning and sustained implementation is the single biggest source of failure of organization design interventions.

This type of change disrupts organization life and flow in the most fundamental ways, contributing to loss of productivity, decline in morale and good will, missed goals, and other forms of reduced effectiveness—even when it’s done well. When it’s done poorly, it can literally bring an organization to its knees.

At a minimum a successful implementation will include these elements:

We are still surprised at the frequency with which major organization changes, especially redesigns and reorganizations, are rolled out and “implemented” in a cursory manner, and managers continue to get surprised by the unintended outcomes that are the result. While the requirements of a solid implementation that minimizes fallout and adverse consequences are well known, the differentiating factor of a well executed one is thoroughness and unrelenting attention to detail. It’s often a pay-me-now-or-pay-me-later situation.

Caveat # 3: Don’t start an organization design process you’re not willing to complete. This admonition may, at first glance, seem to be not all that different than the one about implementation. This one, however, is about making sure you complete the actual design process. Sometimes designs are done in phases that may correspond to layers of the organization (e.g. do the top now and the bottom later) or to units or chunks (e.g. do this BU or function now and others later) either as a matter of practicality, mandate, or convenience. But designs work well only if they’re systemically integrated, and we’ve seen it happen that part of a larger organization is designed and implemented, and before the rest of the design work gets done, the “urgent drives out the merely important.”  Before you know it, the people who need to be involved are on to other things. In the meantime, things have been disrupted, some part of the organization is waiting for the other shoe to drop, and the integrity of the infrastructure has been dis-integrated.

Caveat # 4: Don’t design an organization that you won’t or can’t invest in developmentally. Getting the results you intended from the new design or reorganization—as expressed in your design criteria and desired outcomes—probably requires upskilling or reskilling; changes in interdependencies, interfaces, and interactions between/among organizations and people; and new or different business or technical processes. If the people involved already knew how to do these things differently, in ways required to get the new outcomes, you probably wouldn’t have redesigned or reorganized in the first place. None of it happens by accident or magic or wishing or hoping. It requires a clear, focused, goal-and-outcome-guided process and investment.

The bottom line is that in order for you to realize the ROI of an organization design initiative, a high impact but expensive intervention, it’s necessary to pay close attention to the design criteria, the specifics of the design itself, and also to the details of what’s required to end up with a functional, implementable design. Shortcutting either one can produce equally disappointing results.

---

Resources:

An introduction to and overview of Organization Design theory and methods can be found on the CoastWise Consulting website:

http://www.coastwiseconsulting.com/solutions_organization.htm

There are also several articles on various aspects of organization design in the Resources section:

What is Organization Design and Why It's a Necessary Competence for Senior Managers

http://www.coastwiseconsulting.com/article_06.htm

 

Organization Design-Part II - Structure and Process

http://www.coastwiseconsulting.com/article_07.htm

 

People and Rewards-The Glue That Holds it Together

http://www.coastwiseconsulting.com/article_08.htm

 

Multi-faceted Challenges of Redesign

You may quote anything herein, with this attribution: "Reprinted from View From The Lighthouse, ©2006 CoastWise Consulting, Inc. www.coastwiseconsulting.com".

If you have received this newsletter directly from us, you are on our mailing list. We do not share this list with anyone. To subscribe, unsubscribe, or change your address, send e-mail to: newsletter@coastwiseconsulting.com.