“We trained hard but it seemed that every time we were beginning to form up into teams we would be reorganized… I was to learn later in life that… we tend to meet any new situation by reorganizing; and a wonderful method it can be of creating the illusion of progress while producing inefficiency and demoralization.” (Charlton Ogburn, (1957), reflecting on his experience as a soldier during WWII).
It’s a familiar story. While organizational design is not new – for centuries leaders have experimented with the best way to structure their kingdoms, armies, churches, factories, and governments – our track record has been less than stellar. Intuitively, we know that organizational design must enable employees to be more innovative, service oriented, connected, and efficient. Yet, we lack a practical framework for generating novel designs; ones that enable people to realign their focus, develop new capabilities, shift resources, and build alternative networks, all in service of making the right work easy. As a result, when it comes to design, many restructuring efforts are based on tweaks, cuts, and add-ons, instead of an open-minded and fresh exploration of what “ideally” needs to be.
Appreciating that most design decisions involve complex tradeoffs that favour chosen capabilities at the expense of others, designers need to be rooted in a deep understanding of their design goals, which we refer to as design criteria. Once defined, the design criteria become the North Star, or new DNA, so to speak, for designers as they turn to developing and testing prototypes before solidifying chosen elements into the full-blown design.
Our step-by-step process leads designers through a series of targeted conversations that move from defining the focus, scope, and aims of the design effort, to collecting insights from people in the know to shape design criteria, to building those insights into prototypes for testing, to codifying recommendations for action. Importantly, each conversation builds from and becomes a platform for each subsequent conversation, so that designers learn their way forward. This article describes the integral steps in the organizational design process: define, discovery, design, and do.
The “How” of Design
Perhaps the best way to understand the organizational design process is by living it with your own case as an example. Accordingly, I ask that you select an organization – it can be a team, department, division, or whole organization – as your unit of analysis.
Define: Conversations set the focus, scope, and boundaries of the design initiative, as well as the involvement strategy of who to involve and how.
Step 1: Environmental Scanning
A myriad of factors in your organization’s environment – customer expectations, demographic shifts, technological advancements, new legislation – combine to define the agenda for strategic and structural renewal. We therefore begin by getting a clear handle on the events, trends, and developments that are impacting your organization’s success and viability. What’s going on in the competitive, technological, social, and political landscape? What are the implications for your organization in terms of challenges and opportunities? This step can be completed in a number of ways. Some organizations create detailed trends reports, some engage trends experts to educate them, and some employ tools like trends mapping to aid their conversations. By the end of this step, designers will be firmly rooted in the trends, events, and developments that are driving the redesign effort.
Step 2: Diagnosing Fitness with the Good Design Tests
Now that you are rooted in an understanding of the drivers for change, you can test the “fitness” of your current design to meet those challenges and opportunities. The Good Design Tests help designers develop a common appreciation of their design issues – or cracks in the foundation – that have been leading to a deterioration in efficiency and effectiveness. Typical design issues, or cracks, include an inability to adapt, role confusion, duplication of work, poor relationships, unclear authority, insufficient resources, and in some cases, an inability for people to focus on the core, value-added work. For a full description of the Good Design Tests refer to IRC article, Designing Organizations: A Blueprint for Effectiveness by Brenda Barker Scott. The Design Tests have been adapted from Gould and Campbell (2002).
Envision each test, described below, as an alternative lens from which to explore your current design. This multi-lens discovery is meant to provide a holistic and rigorous diagnosis of the fitness of your current form, in light of your organizational challenges and opportunities.
Fit for Strategy Test: Does your design enable members to focus on and achieve your strategy-the core, value-added work?
The Flexibility Test: Does your design enable people to adapt to day to day irregularities, developing strategies, and future challenges?
Capabilities and Resources Test: Does your design focus resources on and enable the execution of required capabilities?
Relationships Test: Does your design permit seamless/easy interactivity between areas that need to cooperate and collaborate?
Accountability Test: Do people know who has accountability for what? Are they enabled to make decisions and act?
People Test: Do we understand the job roles that are critical to organizational success (pivotal roles for now and in the near future)? Are we able to fill them with talented people?
Leadership Test: Do our leaders understand their core roles? Do our leaders at each level of the hierarchy offer knowledge or coordination benefit?
Feasibility Test: Do we understand, and are we operating within, the constraints bounding our design? Constraints can be financial, technological, legislative, resource related.
As designers reflect on each test, they will identify the design issues, or cracks, that need to be addressed via the design process.
Depending on the focus, breath and depth of design issues identified, the work may require fine-tuning within a unit, or a full-blown examination of multiple units and levels. If, for example, the current organizational form does not easily permit people to focus on the right work, or to develop core capabilities, or to coordinate activities, the scope of the work will be quite broad. On the other hand, if the current form permits the right kinds of work focus, flexibility, and connectivity, but blocks accountability, then accountability will be the primary focus.
Step 3: Involvement Planning
With a good appreciation of your focus and scope, designers can now identify the key stakeholders – they may be subject matter experts, customers, partners, leaders – who need to be involved to provide input, guidance, feedback and direction along the way.
Think of your involvement strategy as achieving two concurrent and necessary aims:
- Who needs to be involved because they need to lead within the new system? These stakeholders, typically in supervisory roles, will be charged with creating the context for their staff to work within the new design. If they do not understand the nuances of the new design – the new capabilities, working relationships, working principles – or if they do not support it, they will not be catalysts and the design will not be fully realized.
- Who else needs to be involved because they have expertise, perspective and knowledge that will lead to a more robust and realistic outcome? To identify these individuals, think about all of the stakeholders who are a part of the system you are designing. Bring them together in working communities so that they can share their input, as well as learn from each other about the inner workings of their whole system. As people share and learn, a fuller picture starts to take shape, for both “what is” and “what can be,” thus dissolving the boundaries and creating the capacity of the system to see itself more fully.
Discovery: Conversations uncover the design criteria (or aspirations) for the renewed organization.
Step 4: Create Design Criteria
Employed as a creative tool, the design tests can be used to generate a series of design criteria that capture the core essence of what the organization needs to be designed to do. The design criteria becomes the DNA, providing deep insight into an organization’s core work, required capabilities, resources, key relationships, decision rights, leadership, and essential people qualities.
For example, the design criteria for a Strategic Services Unit may be as follows:
We need to be designed to:
- Equip managers with the information, perspective and analysis they need to make strategic and operational decisions.
- Provide outreach and education to managers on policies and directives.
- Provide analysis and tools to streamline and simplify processes and decision making for managers.
Design criteria need to provide specific and targeted direction related to a key aspect of organizational design, mainly insights around: the focus of work, the degree of flexibility, core competencies and resources, key relationships, and so on. Later in the process, design criteria will be selected to form the backbone of how units are shaped, linked, resourced, and led. Design:
Design: Conversations turn to prototyping, testing, and refining straw model design concepts.
Steps 5 & 6: Create and Test Design Concepts
Once we have the design criteria, we can move to shaping the actual form of the organization. There are essentially three building blocks of form; they are groupings, linkages and processes, and protocols.
Groupings define how people are clustered into departments, divisions, units, and teams. In essence groupings create the division of labour.
Linkages define how people are connected for the purposes of cooperation, collaboration, and learning. Linkages define the nature and purpose of the vertical and lateral networks. They are accomplished via a combination of linking mechanisms such as cross-functional teams, liaison roles and technology.
Processes and protocols capture how core work is to be completed by specifying process steps, working methods, and philosophical principles that underpin the work. As an example, the award-winning firm IDEO has created a four-stage product design process that underpins all their work. As leader Dave Kelly remarks, “We are experts on the process of how you design stuff. So we don’t care if you give us a toothbrush or a toothpaste tube, a tractor, a space shuttle, a chair, it’s all the same to us. We, like, want to figure how to innovate by using our process and applying it” (ABC Deep Dive, 1999)
Prototyping design concepts is meant to be a playful, generative process. Based on Bertalanffy’s (1968) principle of equifinality, there is more than one path to success, or in our case, more than one feasible design option. Accordingly, designers are tasked with creating design concepts, which can be compared and tested, before detailing the full-blown design.
Design concepts enable the designers to envision how the organization can be grouped, linked, and led. To begin, designers select a set of design criteria to form the backbone of each potential grouping or process. Based on the intelligence from the design criteria, core work tasks are shaped, core relationships are designed, and appropriate protocols and processes are crafted. Once envisioned, design concepts can be compared, contrasted and tested with relevant stakeholders. From this testing stage, new ideas can be surfaced, and combined to arrive at a final design.
Do: Conversations are focused on codifying recommendations for action, seeking approvals, and communicating plans and involvement strategies for implementation.
Step 7: Implementation Planning
With the design concepts fully formed, designers are now ready to move to implementation planning. Key implementation considerations include pacing and phasing, communications, staff placement, transitioning to new work, providing enabling supports, and detailing the next level design.
In many ways “next level” design is round two of the process, however in a streamlined and more focused way. We can think of the design process as a cascading set of design phases, whereby the process repeats itself at each successive level. We often begin with the corporate level, which is akin to creating the foundational framing, to provide the overarching corporate structure and the divisions. Next we move to designing within each division to define the departments, then units, and then teams. Job descriptions are created at each level, as sufficient clarity permits.
An Inside Out Approach
This approach to design is a decidedly inside out. Contrary to popular practice, before we begin to play with the form – the groupings, linkages, processes and protocols – we first develop a deep appreciation of the foundational design criteria. Rooted in the organization’s strategic goals, we consider capabilities, resources, relationships, people and leadership criteria that become the North-Star for the prototypes. Design criteria free us from the constraints of the current form to imagine a new set of DNA, which in turn, generate alternative sets of processes, protocols, relationships, resources, and technologies. When, on the other hand, one begins with form first, by moving, cutting or merging units, or rethinking and reworking processes, the design will continue to be built from yesterday’s design criteria, and an opportunity for forward-thinking and open-minded exploration is lost.
What does your organization need to be designed to do? Follow our process, step-by-step to create the foundation for your “fit for purpose” design.
ABC’s Nightline. “Deep Dive.” Filmed 1999. Posted December 2, 2009. http://www.youtube.com/watch?v=M66ZU2PCIcM,.
Gould, Michael, & Andrew Campbell. Designing effective organizations: how to create structured networks, SanFrancisco: John Wiley and Sons, 2002.
Ludwig Von, Bertalanffy, (1962). “General system theory – A critical review.” General Systems 7 (1) 20.
Ogburn, Charlton, (1957). Merrill’s Marauders: The truth about an incredible adventure. Harpers Magazine, January.
Brenda Barker Scott is a facilitator with Queen’s IRC Organizational Development programs, including the Organizational Design training program.