Leadership: Organizational Design

Comment: This is the fifth post of the Leadership Process series. I began this series because I saw a lack of rigor and discipline to leadership. The purpose of these posts is to look at a process model used by leaders. 

This is an overview of organizational design.

Background

With the down economy and globalization events, leaders have tended to focus narrowly on product lines and specific competitors rather than the big picture. This has resulted in piecemeal  organizational design when a broader picture should have been assessed.

The problem is a narrow focused staff rushes in and architects a new information technology system, software application, or they purchase some new machine to solve a specific need. They rally resources to the new cause and train on it.  Terrific plans are put together to implement these systems. Most often the organization adapts to the technology rather than leveraging the technology in support of the operational objectives and strategy. In short, these organizations fail miserably at designing the organizational structures that support the vision from a leadership perspective.

The root cause of the problem, unfortunately, is that professionals historically either ignore the organizational constructs and processes or refuse to adapt to them. Changes to culture, business processes, and/or relationships often create conflicts and become disruptive to the organization and operations. For many professionals, placing the blame for these outcomes on innocuous things such as technology becomes more bearable. Staff often finds work arounds to the new architectures and ways to maintain empires, stove pipes, and cliques previously built. This is not leadership. Leadership involves putting strategy-to-task utilizing effective organizational design.

The challenge for the leader is overcoming politics, over-regulation or too many policies, cultural clashes, and the unworkable positions. 

Leaders must link the vision and its objectives to actionable activities that contribute meaningful work towards the vision. This requires organizational resources. In doing this, the two most essential organizational qualities are capacity and capability. Without adequate capacity and capability within the organization either something poorly or nothing will get accomplished. Thus, there must be some sort of reconciliation between the requirements of the vision and the capacity and capabilities of the organization in order to effect the vision.  There is a need to take corrective action on the shortfalls and measure the results of the effort.  Meanwhile, the shortfalls should be monitored in order to utilize in strategic planning of the organization later.

"We believe that the centerpiece of corporate strategy for most large companies should become the redesign of their organizations. We believe this for a very simple reason: It's where the money is (Bryan and Joyce, 2007, p. 1.)." Bryan and Joyce argue that organizational design is central to 21^st century business and that older designs are arcane and costly. Bryan and Joyce believe that thinking intensive staff possess the potential for enormous revenues and cost savings. This may lend well to autonomous self-directed cells of a living system discussed below.

Organizational Design

Poor organizational design and structure results in a bewildering collage of contradicting and conflicting activities. For example, role confusion, poor collaboration, high latencies and slow decision-making leading to unnecessary complexity, stress, and conflict. The principles of organizational design involve:

•  Complementary to Objectives: The design must support the desired objectives of not only the project but the organization's as a whole.

• Minimal Critical Specification: The design involves dialogue among those affected. Most teams struggle with over specifications. Thus, a minimal design can allow for teams to learn and adapt more readily. General Guidance is better than specific details.

•  Lowest level problem resolution: Problems need to be resolved at the point of origin. Teams to need find where things go wrong and deal with the variances at that point. People know what good work looks like and if empowered can resolve issues at their level.

•  Clear goals and flexible strategies: Define early on clear and concise performance goals. Do not over specify. Organizational design are living systems rather than robotic machines. There are many ways to get to the same ends. This principle encourages adaptability.

• Boundary Location and Control: Design for desirable sharing of information, knowledge, and experience in order to strengthen learning. Traditional companies typically build structures that limit sharing and problem solving through organizational barriers. The idea is to breakdown boundaries and reduce control.  

• Information Flow: Information must flow uninhibited and self-directed at all level of the organizational design. Control must be subordinate to achievement and learning. In short, it is better to share information and encourage conversations than control information access and limit dialogue.

• Supportive of congruence: Any rewards and support systems must be congruent with objectives and strategies for team-based work structures across boundaries.

•  Human values and design: Any designs must be supportive of relationships, meaningful work, as well as supportive of learning, decision-making, and help. There must be interactive and participatory planning processes involving those affected.

• Learning systems:  Design is an ongoing and reiterative experience. It is critical to build into any organizational design the ability to change and learn. Professionals and staff must have the ability to re-fashion their organizational arrangements as required.

There are scores of organizational design styles and types. The leader must assess the style and types the organization is operating within as this will determine how they leverage the capabilities and capacities. Once gaps and shortfalls are determined in capacity and capability, then procurement of the shortfall must occur. This often involves a make-buy analysis or some sort of organizational strategy to augment capacity and capabilities.  If capabilities are not present at all then the organization must resource them at the adequate capacity.

One of the stronger approaches is to view the organization as a living system or as a nodal network of cells that perform work and communicate among each other. The idea is not to over specify organizational design. Instead, provide guidance and room for the teams and organization to adapt as necessary. Living systems are organizations that have autonomous cells, self-organize, and are in a managed dynamic state of flux. These systems adapt to changing conditions by identifying necessary elements or cells then communicate with these other elements to solve problems and perform pertinent work.

In this living systems paradigm, the leader must assess or look for complimentary fits for capability and capacity augmenting the organizational structures where necessary. Decisions must be made if the augmentations are long term or short term which goes back to make-buy analysis and organizational strategies regarding augmentations.

Once the organizational design is in place then the leader is ready to mobilize resources. This is typically when the project manager is selected and a classic project initiates. This is the next blog posting on the Leadership process.

Reference:

Bryan, L., Joyce, C. (2007). Mobilizing Minds. McGraw-Hill. NY.