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Organizational Design Organization Development Organization Dynamics

Published by orgvue

A Concentra team will be speaking at the March meeting of a network of senior Organizational Development practitioners at Cass Business School. We’ll do a practical session, stepping through from Vision through Goals and Objectives to Constraints, Challenges and Strategy. A well-established process. So what’s new? We’ll push it through to two additional areas that Concentra specialises in: rational structural choice and micro design. And we’ll ask two questions – how useful is this methodology practically? And does it make sense theoretically?

1. Rational Structural Choice:

Rational Structural Choice is a disciplined step-by-step process for macro-level organization design. It includes: developing design criteria, mapping high level processes, mapping accountabilities, logging structural options and scoring them to settle on an organization design.

Rational Structural Choice flags up some gaps in traditional Organization Design thinking. Few theorists push all the way through into detailed mapping of processes and weighting of options, in part because it is too difficult. Those extra steps are often a challenge to practitioners too. On the Mark – a Concentra partner company – are one example of an advisory organization that can do it, but it requires superb facilitation and intensive joint working between advisor and client. Is that practical in the time-pressured environment of many organization design projects? We will show the methods that we use and ask for feedback on them.


2. Micro Design:

Micro design is a disciplined process for driving into the real detail of the new organization. It includes asking what it will really be like for the people who work there. This means: outputs, processes, competencies, roles, team structures, accountabilities, job descriptions. How many people? Right sizing. Where will the people be? Location choices. Which people? Allocating people to roles.

Micro design flags up some gaps in traditional Organizational Design thinking and practice. Although most writers would agree this ought to be how Org Design is done, few offer detailed methods, and fewer still can point to examples where those methods have actually been applied in practice. Check how accountability matrices are described in books outlining RASCI models: the examples are often 10 roles or fewer, covering 10 skills or fewer. In other words, the authors offer a method that makes sense in principle, but they can offer few guarantees on its applicability in practice to large scale organizations (e.g. ones with at least 100 employees), and to organizations that are continually subject to change (e.g. all organizations we know). As a consequence, people rarely use RASCI; when they do, they curse it, and they still more rarely open their drawers to look at their spreadsheet and consult its results… We will show the practical methods that we use, using advances in organizational design software, and ask for feedback on them.


The theoretical question:

3. But what of Organization Dynamics?

My understanding is that Organization Dynamics sees organizations as a set of continuously evolving conversations. I instinctively like this way of describing the world. It seems open and flexible, and recognises the shifting realities. It seems more human than a reductionist, ‘rational’ approach. But can a description in complex dynamic terms – “dynamics that reflect differing power relations, ideologies, interests, identities, interpretations, and the like” – really deal with the practical challenges of setting up and running organizations? Don’t we need to be reductive? A little bit rational at least?

Let’s take two practical examples. A world-leading raw materials producer has signed an agreement with a national government to open a new facility in a country – for the sake of argument, Angola. The facility will be of a scale to employ 10,000 people, 95% of whom must be Angolan nationals, and 60% of whom must be local to the area. We have to take a rational approach to design. What outputs will the facility have? What processes will it undertake? What skills will it need? What roles do these fall into? … In these ‘greenfield design’ situations, a rational approach seems very appropriate.

On the other extreme, a world-class technology company wants to keep ahead in fields where technology and capabilities are evolving all the time. The key drivers of profit are hard to predict in 10 – or even 5 – years’ time. Rational design in this situation suffers from at least 3 key failings: first, the central design team, using the ‘rational’ approach cannot overcome the limits of their rationality and their information limitations. They do not know all the things that the people in the field know. Second, even if the central team were to bring the engineers into the fold, they do not know now what will be known in one year’s time. Graphene may be commercialised in their field; lithium batteries may or may not prove to be safe. Third, rational design may inhibit the creative flair of the engineer – lobbying for research funds, and tracking progress against plan may be antithetical to the type of people who develop valuable new applications. In this situation, it may be better to design in ‘undesigned’ time and undesigned structures. Google’s 20% time comes to mind. Better to design in a social governance structure (“just explain what you’ve been doing to your peers”) – and see what comes out. Let people have their own (un)-organization structures every Friday and let them be fruitful.

So which approach is right?

It has been pointed out to me that Organization Dynamics could be used to describe either situation. The examples I’ve used just indicate differences in how detailed you need to get in designing how the organization will work.

So this makes it horses-for-courses. Better to have rational Organizational Design in very clearly specified work, where a new structure is being created according to an existing model. The skills need to be transferred; existing best practices need to be shared. In this situation rational Organizational Design makes sense. In less clearly specified work, job design with very detailed job specifications don’t make sense. In professional roles (like expert engineers, or doctors in the UK NHS), payment by specified targets may risk leading to ossification of practices.

What’s interesting from our point of view is that it still helps to document the structures, relationships and people facts – both As-Is and To-Be. For Organizational Design purposes, it’s very useful to be able to know where you’re starting from. Frankly the people data is often quite poor, so there is a lot of value in just being able to understand the As-Is.

For the To-Be, mapping what’s intended is useful whether the work requires a highly specific design, or a very flexible design. Even if a role is to have no accountabilities, it is helpful to the people around the role and the person in the role themselves to be clear about that. The remaining framework is still important – to whom they will report, what the vision and goals are for the role and so on, to the desired level of detail.

So there is no tension here of Organizational Design vs. Organization Dynamics – it’s just different versions of Organizational Design… which could all be described in Dynamic terms.

A table of descriptions of Organizations and Design challenges:

  Well-established operational model being set up on brand new site New design for an existing conventional organization New design for a high-technology commercial organization
Organization Development Ongoing process for improving individual and organizational effectiveness
Organizational Design(top-down, deterministic) Suitable – can transfer best practices quickly and make adoption of complex technologies safer Until now, an approach constrained by poor data, and by starting from the existing situation. Now easier due to greater ease of mapping the As-Is and methods allowing people to model how to move to the To-Be Not appropriate to seek to define in full detail all aspects of a job; it may be appropriate to define a subset of parameters
Organizational Design (participative) Suitable for adapting a well-proven existing model to local labour and customer conditions. See: Engage 4 Change methods – clearly define scope of what’s permitted and what’s not Until now, this approach was also constrained by poor data, and difficulties of managing and capturing large numbers of people’s input. Technology now opening up potential for crowd-sourcing & crowd evaluating ideas Why not? If autonomy and mastery are important to people, couldn’t the organizational design process be opened up?
Organizational Design(flexible) Less likely to be suitable because the reason for selecting a well-established model is that it brings proven efficiencies and good practices. These will be much harder to benchmark if a variant on the operating model (and varying) is in place Surprisingly, this has been the default for many organizations: unable to specify accountabilities and activities in detail, people have used rules of thumb. May still be a suitable approach for roles where autonomy in some elements is important, but can be supplemented by clarity on roles and other data Why not? 20% free time is well spent if it generates 80% well used time and lots of new ideas and initiatives.
Organization Dynamics A way of understanding and describing organizations equally valid whether well-established and determinate in design, or relatively open and un-determined.