SOLUTIONS: ORGANIZATION DESIGN

The Power of Organization Design

Does How You Do What You Do Get In The Way of Getting Work Done?

Organization Design is an unknown, unrecognized, and frequently overlooked source of competitive advantage for your organization. While many are eager and quick to look outside their organizations--to the marketplace, competitive analyses, industry trends, the economy--for competitive leverage points, they may be less likely or willing to look closer to home. But when an organization's design is optimally aligned to support the company's mission, purpose, and values and to enable the accomplishment of business and technical strategies, it will be better positioned for success in all dimensions. The infrastructure is then an enabler or your success rather than an obstacle to it.

When designing an organization, CoastWise Consulting looks at the factors that must be considered and the processes that are required in the design, development, alignment, and implementation of an effective organization. We go beyond the structure of the organization--the lines and boxes and arrangement of people and functions--and include such factors as information and reward systems; management and decision making processes; mission, vision, and values; business strategy; and people. We assist you in considering and designing each element separately, weighing and balancing each in relationship to all of others, identifying the trade-offs to be made, and determining the best fit of all the elements. The infrastructure of an organization then becomes a source of competitive advantage, while the failure to attend to designing and sustaining an infrastructure that best supports the business and human needs of the organization contributes significantly to its dysfunctionality and decline.

When and Why Should You Undertake an Organization Design Process?

When an organization wants to make significant changes in its purpose, outcomes, performance, and/or functionality, then a major, comprehensive redesign process is called for. If the required changes are less sweeping, or some aspect of one of the elements changes (for example, strategic modifications such as targeting a new market, or a reduction or change in the size or mix of the workforce), then each of the other elements should be checked for fit. Each must be modified as necessary to ensure that the organization will still "plug and play" in light of these new developments. That's because systems are interdependent by nature. Changes in one part of a system create corresponding changes in other parts. Sometimes these secondary changes go undetected until they have caused unanticipated and often adverse consequences.

Why Bother When It Sounds Hard and Takes A Lot of Time and Energy?

Form follows function. Would you build a house without design requirements, blueprints, a cost estimate, and an architect? Of course not!! Design and fab a chip without specs, a schematic, a recipe, and an assortment of design and manufacturing engineers? You know better than that. Your infrastructure is the skeletal, circulatory, and respiratory systems of your organization. They give it form and life force. Can you afford not to have your processes, rewards, structure, and people aligned with your strategy?

The Conceptual Starting Point

While there are several organization design models that depict the key elements, our preferred approach comes from the work of Ed Lawler and Jay Galbraith, pioneers and colleagues in this work.

The CoastWise Approach

We recognize that each organization requires a customized process that includes both management and employee involvement. We recommend forming a Design Team that's representative of the organization and works in concert with a Sponsoring individual or group, frequently the senior executive or his/her staff.

CoastWise Consulting asks the hard questions: those that will challenge you and perhaps make you squirm but are essential to developing your organization's capability to function successfully in a challenging environment. Questions like:

• What are you setting out to do through organization design?
• How will you know when you have succeeded?
• What stakeholders do you need to satisfy?
• What resources do you have?
• What barriers or constraints do you face?

What Do I Have To Do?

First, we carefully and systematically look at each element separately and together. We need to figure out how to arrange the pieces and the whole so you can achieve your vision, mission, and goals.

We will look at your:

Business Strategy-- What is the climate in which your organization exists? What is the overall direction of the entire enterprise? At what points, with whom, and for what purpose is your organization interdependent -- in -- or outside its boundaries?

Mission, Purpose, and Values-- What is the distinct contribution that your organization makes to the overall success of the business? What are the necessary and specific goals and deliverables for which the organization is responsible? What does the company/organization stand for; how do you want to be known; how do you want employees to work together and treat each other, your customers, other stakeholders?

Structural Design-- What are the required specifications or design outcomes? How can work best be divided into clusters of tasks and responsibilities? What is the nature and purpose of relationships and interdependencies within, between, and among various groups or functions? What are the merits and drawbacks of different approaches to arranging the work and the relationships?

Alignment of Processes and Systems-- Do the current work processes and systems (e.g. decision making, rewards and recognition, information and communication, governance forums, etc.) adequately support the mission, values, strategy, and design outcomes of the redesign process? If not, how should they be modified to bring them into strategic alignment?

The second phase is the implementation of the new design:

Implementation-- What is the transition plan? What are the critical aspects of communicating and implementing the new design? How will you know if the new structure is contributing to the desired outcomes?

Evaluation-- Are you getting the results you want? If not, where and how will you make modifications?

Both of these phases require knowledge, discipline, and patience. Sometimes, the analysis and design are well done but the implementation is poorly planned or executed, or the intended changes are announced and employees are left on their own to determine how to make the changes or adjustments.

How Can You Sabotage The Hard Work of Organization Design That You're Doing?

• Mistaking Structure for Design, hoping that a reorganization will solve the problem(s), and assuming that the other variables can or will stay unchanged.
• Trying to move faster than this work requires.
• Attempting to "implement" without a clearly articulated, documented, and well communicated plan; without a project manager; and/or without the required commitment of the leadership team or resources.
• Hoping that if the changes are announced at an All Hands meeting, employees will be able to figure out the rest on their own.

Click here to read about
"The Power of Clear, Complimentary, and Well-Aligned Strategy & Goals"

Additional Resources on the Power of Organization Design

Articles:

The Impact of Downsizing on Corporate Culture
Doing Teams With Knowledge Workers: The Practitioner's View
They Said It Couldn't Be Done: OD Success With Knowledge Workers

Newsletter Issues

Issue 6 - What is Organization Design?
Issue 7 - Organization Design - Part II - Structure and Process
Issue 8 - People and Rewards - The Glue That Holds it Together

*Lawler, E.E. III, (1996). From the ground up: Six principles for building the new logic corporation. San Francisco: Jossey-Bass Publishers.