Doing Org Design Right from Day One - Part 1

By Jodie Goulden

 

Part 1 People and Work

 

In my consulting work, I’m a witness to the incredible potential within organizations. They are filled with smart, talented individuals fuelled by a shared motivation to make a positive impact on the world. Frustratingly, this talent and enthusiasm sometimes collides with organizational barriers such as unnecessary bureaucracy, multiple reporting requirements, and internal politics. Companies might address these issues through investment in training, leadership development, and culture change initiatives, but often the transformation they are looking for remains elusive. How can organizations bridge the gap between aspiration and real results?

 

That's where organization design comes in, as a systematic approach that helps you think through the whole organizational system and select the actions that will optimize impact.

 

In our experience there are 3 fundamental principles that should guide any org design effort. They are:

 

1. It’s all about the people

 

2. It’s all about the work

 

3. The organization as a whole system

 

In the first part of this series, we’ll cover the first 2 principles, people and work. In the second part we’ll deal with arguably the most important principle, the whole system.

 

It’s all about the people

 

In a transformation scenario when someone says, “it’s all about the people”, we all nod in agreement. However, the discipline and analytical rigor that comes with some change processes can feel mechanistic and clinical. It’s tempting for leaders to hold off on communicating about change until they think they’ve figured out all the answers because they perceive the risk of demotivating people. This might be well meaning but in our experience it neither protects people from worrying nor contributes to effective problem solving.

 

When it comes to people, organizations reveal a complexity that can feel overwhelming.

 

A leader once proudly described to me all the sophisticated process changes that aimed to improved productivity in their organization, then said 'you know the one problem we could never solve? People!'

 

This reminds me of the Cynefin Framework, which differentiates between complex and complicated domains (Snowden & Boone, 2007). A complicated domain is one that is difficult to understand but can be analysed and understood by competent experts, for example think of a big engineering challenge. A complex domain is one where the solution is neither obvious nor predictable, my favorite example is managing a toddler, where different approaches may yield varying results each day. An organization is a complex domain, where outcomes are influenced by human behavior and interactions.

 

This complexity is what makes organization design an art and a science. No single leader, consulting firm, or AI can calculate the solution to a complex problem like how to design an organization. Instead, when there is effective leadership and clear direction, it’s the people in organizations that will discover solutions.

 

Principle # 1. At Orgdesign Works we believe that when people participate in designing their own organization, not only will the design itself be more effective, but a successful implementation will happen faster.

 

 

It’s all about the work

 

If you are a leader who is willing to involve people in designing the organization, what do you need to know and communicate? When I start working with leaders in this situation, we usually discuss the strategy. A prerequisite to designing the organization is understanding what you are designing for, which means knowing where you are going. Usually this is reflected in a strategy. You need to know and be ready to communicate this before you design the organization.

 

Once there is a clear strategy so that everyone knows what the organization should be designed for, you can describe the work. One way to do this is suggested in the book, Microstructure of Organizations (Puranam, 2018). It sets out five “universal problems of organizing”.

 

For any organization, five key questions arise:

• • What needs to be done?
  • Who does what?
  • Who talks to whom?
  • Who gets what rewards?
  • How are disputes resolved?

 

The answers to these concrete questions will be specific to the organization. Collectively, the answers shape an organization and determine its outcomes, affecting employees, customers, and determining the overall success of the business. Since these questions can be considered at the level of any team, this is a useful way of thinking systematically about a discrete part of the organization, and then scaling change for a broader impact.

 

Principle # 2. There’s no ‘one size fits all’ best organization design. Instead, a clear, specific, and aligned direction is key to defining the work to be done, which will ultimately lead to the most effective organization design for the strategy.

 

In my view, organization design projects that adhere to these two principles have a far higher chance of success than average. However, there is another principle that might be even more important, which I’ll be writing about in part 2. Stay tuned.

 

 

If you are curious to know more about how we work, send us a note at info@orgdesignworks.com