Organizational Structure: Start with Design Principles

House project

It would be foolish to design a home without first thinking through your needs. How much living space do you need? How many bedrooms?  What style do you like?

However, organizations are built each and every day without considering these types of fundamental questions around what the design is attempting to accomplish.

In order to create organizational structure, the key is start with design principles which are statements about what the design should provide.   It is critical that these design principles guide the entire design process since they focus us on creating an organization which accomplishes our objectives.

Below are ten organizational design principles from groups that I have consulted for:

  1. Build depth of leadership capability
  2. Be more agile via delivering faster
  3. Create cost efficiency
  4. Optimize people and system resources
  5. Enable process efficiencies
  6. Create best in class customer satisfaction
  7. Foster better service delivery
  8. Increase manager accountability
  9. Enable collaboration between departments
  10. Build internal change readiness

For example, I helped design a very different type of structure for the organization hoping to increase leadership skills versus the organization seeking to deliver products faster. In order to improve leadership, we crafted a structure that would challenge leadership to gain new skills, knowledge and abilities.  While at the organization looking to deliver products more quickly, we streamlined the structure resulting in more agility.  Clearly, depending on outcomes, the types of functions created, how they are organized and the roles and responsibilities within those functions are going to be very different.

Design principles are the foundation for trade-off decisions.  The design principles provide leadership with a tangible way to surface and discuss competing interests and outcomes.  Leaders are able to clearly state the improvements that they want to see as a result of the design.  This allows for a robust discussion across parties helping leadership gain consensus around the primary outcomes. [JayGalbraith.com, 2016]

I typically have leadership rank the importance of design principles since it allows them to evaluate the value of various design solutions.  I have found this to be the most effective and fastest way to determine which outcomes are most important to leadership.  We can then more easily determine whether an organizational design that is functional, divisional, strategic business unit, matrixed or project based will result in the best outcomes.

Jay Galbraith [JayGalbraith.com, 2016] makes a strong case for the importance of robust design principles.  He says that the criteria should be debated, rated, and kept prominent throughout the design process.  As a result, design principles are a topic in each and every conversation that I have with clients about the new design.  Clients find that as a result of this ongoing exploration of the principles, their understanding of what they are driving towards via the organizational design and how to get there becomes clear.

Questions:

  • Imagine that three years from now the Wall Street Journal [WSJ] names your organization the best in your field. What is the WSJ saying about you that makes you the best?  [This will provide you with clues as to your design principles.]
  • How can we best organize our work and people in order to accomplish our strategy?

Note: This blog reflects my thoughts and not the opinions of my employer.

Applying Organizational Development Methods to Product Design for Better Outcomes

product design

Designers are incorporating human centered design into products for our common good.  Wendy De La Rosa, Lead Behavioral Strategist at Irrational Labs [@wdlrosa, #SXSW, #hackingbehavior] says that human centered design involving combining user centered design principles with behavioral science for the good of human kind.  Many of us have benefited from this discipline in form of the FitBit which is designed to help one stay motivated and improve health by tracking activity, exercise, food, weight and sleep.

Chris Risdon, Head of Design, Capital One Labs, Capital One [@ChrisRisdon, #SXSW, #humancentereddesign] makes the compelling case that designer have the potential to positively impact the behavior of hundreds and thousands of consumers through product design.  While products can influence many citizens in terms of volume, the extent to which products influence complex behavior is limited.  Most of the applications today, such as the FitBit, send a single data point to the user in the hope that they take a specific action.

This is where organizational development methods can make a significant contribution.  Organizational practitioners, like designers, leverage behavioral science.  However, instead of applying these principles in the design of product, we apply these learnings to the creation of workplaces.

What the theory and practice of influencing human behavior in the workplace lacks in volume, is made up in impact.  Organizational interventions transform human behavior on a regular basis in complex aspects of work including structure, processes and people practices.

Below are some organizational development tools and examples of their impacts:

  • Structure: Jay Galbraith’s emphasis on leveraging design principles in the creation of organizational structure helps ensure that the design accomplishes the desired outcomes. The principles are statements about what the design should provide.  These principles guide the design process, provide criteria for making trade off decisions and keep all parties focused on creating the same outcome.  This organizational design methodology has allowed me to take a dozen independent marketing groups within a Fortune 100 company and align them for quick response to customer demands and other unexpected challenges. [jaygalbraith.com]
  • Processes: Edward Deming’s Plan-Do-Check-Act [PCDA] continuous improvement circle has provided the framework for managing improvement projects.  The method helps employees stay focused on data collection and analysis driving them towards identifying and solving root cause.  Outcomes of leveraging this method includes savings millions of dollars, along with better quality products and services.  [http://asq.org/learn-about-quality/project-planning-tools/overview/pdca-cycle.html]
  • People: ‘Start/Stop/Continue’ is a straight-forward group exercise that can lead to increased effectiveness and efficiency. As the name suggests, the goal is to reflect on programs, activities and processes and come up with three distinct categories of future state action.  I have had employees report back that this simple exercise has been transformative in terms of getting groups of people more aligned and working in a more collaborative fashion towards their objectives. [https://www.mindtools.com/pages/article/SKS-process.htm]

Building organizational design methods into products and services may result in impacting complex human behavior in ways that are unimaginable today.  For example, prompting consumers to identify their design principles, follow the road map of Plan-Do-Check-Act and reflect on what they need to Start-Stop-Continue doing may provide practical approaches for better outcomes.

These tools, in addition, to the hundreds of similar methodologies leveraged by organizational designers can result in shaping consumer behavior for more impact.  Possible outcomes include people becoming more reflective about how they can create more success, carry out day-to-day activities more effectively and efficiently and collaborate with others in new and improved ways.

These outcomes would far outweigh the value provided from a simple stimulus and response such as our FitBit buzzing once we have reached out daily goal.  Organizational design approaches may allow us to accomplish Steve Selzer, AirBnB Experience Design Manager [@SteveSelzer, #SXSW, #frictionhumancentereddesign] vision of a world where products help shape positive social values and successfully navigate an increasing complex and changing world.

Reaching this utopian state will require that we dive much deeper into behavioral science and organizational development is a great first place to mine approaches.

Questions:

  • How can we communicate the value of organizational design methodologies to the product design world?
  • What organizations and people are well positioned for the challenging work of embedding these behavioral science approaches into products and services?

Note: The views expressed in this blog are my opinions and do not reflect the views of my employer.