Over the last quarter, I took “Designing Organizations,” while also working on an org design project for one of my consulting clients. It was an amazing opportunity to mesh theory with practice. As a result, I was able to curate a list of Top Five must-haves for organizational design. They are:
- It starts with purpose. There must be a purpose, or “true north,” to design to, such as a strategy and/or shared alignment on the business objectives. This informs the design criteria, which becomes the anchoring mechanism and litmus test for all future decisions.
- Define the capabilities needed to realize the purpose. Once the purpose is identified, define what capabilities are necessary to bring it to life in the short and long term. A capabilities audit (Ulrich & Smallwood, 2004) may be a helpful tool in identifying these.
- Models are useful. Quoting a wise Northwestern professor, “all models are wrong, but some models are useful” (Michelle Albaugh). Models are excellent diagnostic tools that that show how design elements are dependent in an open system environment.
- Proto-type, but don’t pilot. Be prepared to look at different org structure options, prototyping them in a visual way. Explore variations, test against the design criteria, recognize the trade-offs, and make decisions that align to your anchoring purpose. However, be careful about piloting an org design in a small part of the organization since a truly neutral control group may be very hard to identify. Instead, understand your trade-offs and employ good change management practices when you’re ready to launch holistically.
- Be prepared to iterate. There is no perfect solution and typically an infinite amount of choices. Be prepared to discuss the pros and cons of different scenarios, understanding and accepting what the trade-offs are. In open systems, iteration and evolution will be on-going as talent and customer demands change. Be prepared to evolve with them.