- What is Organisation Design?
- Introducing the Organisation Evolution Framework
- Consistency and Intentional Design. Building the Organisation of the Future.
- Building the Intentional Organisation
- Business Models: the theory and practice
- Strategy Frameworks: The Theory and the Practice
- Organisation Models: a Reasoned List between Old and New
- Operating Models: the theory and the practice.
- Leadership Models: The Theory and the Practice
- Purpose: The Theory and the Practice
- Corporate Culture: The Theory and the Practice
- Organisation Ecosystem: The Theory and the Practice
Last week I wrote a long post on Organisation Models, trying to bring together a list of the many models that exist in the literature, from the more traditional to the more recent ones, which sparked quite some interest and discussion. I had at the same written and scheduled a post that wanted to try to bring some clarity on the more common “models” we use when speaking about organisations: Business Model, Strategy, Operating Model and Organisation Model. What also connects these two posts is the absolute need to think in terms of Consistency and Intentional Design.
Thinking in terms of Consistency.
When talking about the effect of Consistency, there’s nothing better than looking at a concrete example. Some time ago, I came across a 2012 article by Bob Sutton, as he reviewed the book by Adam Lishinsky Inside Apple: How America’s Most Admired–and Secretive–Company Really Works (Sutton, 2012).
Apple is nearly the exact opposite of the kind of organization hyped by people like Gary Hamel and even Peter Drucker. It is centralized, secretive, fear-ridden, punitive, and not much fun for most people who work there. But it works because the pieces of the “organizational design” fit together, or at least did fit together when Jobs was there, in an elegant way. The secrecy is so severe that, when products are launched, even senior people are surprised by the final product because people are on a strictly “need to know” basis. But this is offset with a system of roles and responsibilities — and crucial to all of it– is what Apple calls the DRI, the directly responsible individual, a centerpiece of the organization. There is clear responsibility placed on individuals, not so much on groups and committees. Although groups and some committees do exist, the DRI can always be found and is where attention is focused. Which means that that it is clear where to go to provide guidance, to integrate their work with others, and who will be fired, blamed, and replaced — and celebrated too. […]
My point here, and this follows an old conceptual perspective called “contingency theory,” is that other organizations that want to be like Apple –and that seems like so many now — need to be especially careful about copying individual pieces, because the reason it works is that the multiple elements fit together.Bob Sutton, Inside Apple: Adam Lashinsky Revealing and Well-Crafted Book (Sutton, 2012)
Although Apple has changed since the book was written, and this post was done, for sure, it is a company that still endeavours many facets of traditional organisation models. Which in the past have been glued together pretty well by Steve Jobs in a remarkably consistent organisation. Ed Catmull in his book Creativity, Inc., explains pretty well the fact that Steve Jobs has been cautious in not applying in Pixar the same style and models used in Apple because the two companies were different and pursuing different goals. But he did invest enormous energy into planning the new Pixar building. Why? Because he wanted to ensure the critical effects of serendipity in the creative culture required by Pixar.
In other words: what is the link between Jobs’ Design of the toilets in the new Pixar Headquarter and Organisation Design as a discipline? In one word Consistency. And why is this important? Well if you’re living in an organisation riddled by mistrust, full of fear and negative emotion, overwhelmed by bureaucracy and layers of useless management, I doubt that merely copying the idea of the Pixar HQ will transform you into a high performing, creative, flat organisation.
The problem is that Consistency is rarely explored. Companies typically engage a PR firm to design their new Purpose Statement, they engage with the likes of BGC or McKinsey to redevelop their Strategy every few years, they avoid touching their Business Model unless something critical hits them, and they tend just to make sure their organisation charts are up to date. In cycle, they will get the newest Fad words, and ensure that one area in their company (at least) get to be TQM, Lean, Agile etc.
many problems in organizational design stem from the assumption that organizations are all alike: mere collections of component parts to which elements of structure can be added and deleted at will, a sort of organizational bazaar.
The above is a quote of a 1981 HBR Article by Henry Mintzberg, titled Organization Design: Fashion or Fit?. And it’s true, in too many ways the broader domain of organisation design (and I intend it here in indeed its more general sense, including all strategic elements), feels like a market full of off-the-shelves methodologies, each able to solve one niece issues in the company. We can buy a Compensation and Reward System, or maybe just focus on the Incentives. We can roll out a new Charter of Values. We can outsource the HR service area and at the same time in-source IT Support. Benchmarking becomes a negative contributor in this, as it often leads an apple to copy an orange (Kaplan, 2006).
Organizations, like individuals, can avoid identity crises by deciding what it is they wish to be and then pursuing it with a healthy obsession.Henry Mintzberg, Organization Design: Fashion or Fit?, (Mintzberg, 1981)
Again Mintzberg points out how important it is to seek Consistency starting from the business intent and the Strategy of the organisation and aligning operating model and organisation. To pursue Consistency, you need to have a “Healthy Obsession“, which is interesting to note, is a common trait for all the successful organisations that have experimented alternative models (Mintzberg, 1981). But was also the Steve Jobs’ case.
consistency, coherence, and fit—harmony—are critical factors in organization design, but they come at a price. An organization cannot be all things to all people. It should do what it does well and suffer the consequences. […]Henry Mintzberg, Organization Design: Fashion or Fit?, (Mintzberg, 1981)
The point is not really which configuration you have; it is that you achieve configuration.
You would not want your aeroplane pilot to adopt a “trial and error” experimenting approach in your next flight home, right? This, however, does not mean that your airline cannot experiment on some forms of innovative management model. The critical aspect is again Consistency above all. In culture (Johansson, 2016), systems, processes (Johnson, 2017), capabilities, strategies. All dimensions come into play.
The Congruence Paradox
As I wrote this piece, I also finished the book Range by David Epstein, where there is some interesting research mentioned on the topic of congruence. The concept of “Congruence” is a social science term for cultural “fit” among an institution’s components – values, goals, vision and leadership style. It has been a pillar of organisational theory since the 1980s. According to it, effective culture is both consistent and strong. When all signals point in the same direction, it promotes self-reinforcing consistency and people like consistency. However, the first study that systematically examined congruence on 334 institutions of higher education, found that it had no influence on any measure of organisational success. The researchers went on and found that the most effective leaders and organisations had Range, they were in effect paradoxical, able to maintain different types (apparently inconsistent) of organisational set-up, not fully congruent among each other (Epstein, 2019). The danger is that full congruence equates too quickly to stubbornness and inflexibility.
A level of ambiguity, it seemed, was not harmful. In decision making, it can broaden an organization’s toolbox in a way that is uniquely valuable.David Epstein, Range, page 257 (Epstein, 2019)
This is the typical domain where Organisation Network Analysis has established its value, discovering the value of the informal organisation set-up as a parallel mechanism to the formal hierarchical organisation (i treated this topic in my post on Collaboration).
The focus should, therefore, be consistency, but not at all cost. Your culture needs to still keep certain universal values of openness, curiosity, learning agility and flexibility. It needs to be able to develop a certain level of ambidexterity, and your leaders need to be able to manage paradoxes when needed. It might be confusing, but it is the balancing act between these components, that creates the Consistency we are after.
Building your Truth
You can’t promise the best customer service in the world and pay your store staff minimum wage. You can’t guarantee your investors creative solutions, and run the entire organisation with traditional command and control. You can’t tell your shareholders that your organisation is consumer-focused if all your incentives are sell-in based. You can’t implement Agile, and still, run a traditional budget process based on individual investment requests.
In a world where there’s no absolute truth, you need to find your specific truth and be intentional and deliberate in pursuing it.
Organisation Models: a Reasoned List between Old and New | Sergio…
Recent years have seen an increased number of Organisation Models appearing on the scene of management. This was primarily in response to the accelerated rhythm of change imposed by the VUCA world and often have come as the result of a crisis of an organisation.
Building on Intentional Design.
The “healthy obsession” that Mintzberg cites means that every aspect of our organisation design needs to be intentional and deliberate. We can’t expect high levels of trust if our travel expense process treats each employee as a potential thief.
How do we achieve this? I’ve been reading “obsessively” over the last few weeks and found a lot of interesting possible answers again from the world of Design Thinking. Consistency is a key attribute of good Design (Nikolov, 2017). But there is more that I have discovered.
Five elements of Intentional Design
Doug LeMoine has done a presentation on Intentional Design in the 2018 Apple World Developers’ Conference. He mentions five principles for Intentional Design. I found these to be excellent also in the context of my reasoning.
- Radical simplification. LeMoine speaks about the development of assets for a specific purpose and to benefit others. Radical simplification is the first manifestation of intent and intentional Design. Simplicity is a crucial assumption for any good design and needs to be embedded into the Design itself.
- Deep understanding. The fundamental needs that you see when you start kind of looking at people and the users that you might want to serve are superficial, and you need to dig past those. Doug LeMoine
- Extreme focus. Designers must focus on what the customer needs, and ensure that everything is aligned in Design, towards the goal of simplicity.
- Personal connection. Without a personal relationship with the customer, and a thorough understanding of its needs, it’s impossible to be genuinely intentional in Design.
- Direct communication. Explaining the design process and looping for continuous feedback become then two critical attributes for Intentional Design to be successful.
Even if these principles were mentioned for product design, I believe these can be applied to also Organisation Design, as we need to think of a process that can need to the outcome we want to achieve and be holistic as much as possible. Sometimes also identified as deliberate Design, it all boils down to designing with purpose (Grainer, 2017).
Purpose over Building
Another interesting reflection on Intentional Design, this time coming from the field of UX, is that often designers embed meaning to design after they have designed something (Eaton, 2018). In reality, purpose should always be embedded in the final solution because Design is purpose.
The concept is simple, yet it is an essential aspect to take into consideration, as it pushes ourselves into one specific direction in the continuum between Emergent Design and Intentional Design (Moore, 2019).
When it’s time to become Intentional?
Which brings us to the question: when is it time to think in terms of Intentional Design? We can go back in time again to the work of Danny Miller who already in 1980 wrote a paper titled Revolution and Evolution: A Quantum View of Organizational Adaptation (published in 1982) where he analysed when companies do perform the change (Miller, 1982). Thinking in Mintzberg’s terms, the question is if companies should continuously adapt to the external Environment at the expense of internal Consistency, or rather maintain internal Consistency at the cost of gradually worsening fit with its Environment. According to the research by Miller, companies tend to opt for the “revolution”, i.e. they prefer to maintain Consistency over time, and then go through a period of severe disruption to realign the fit with the external Environment (Miller and Friesen, 1982). He defines this Quantum Theory of Structural Change, mostly showing that companies tend to change in short periods of disruption (Miller, 1982). This should not come to a surprise, as we have already seen discussing operation models, that companies tend to change when disrupting external forces hit them hard.
Why this? An explanation can be the concept of Entropy, which is the tendency of any system, left undisturbed, to fall into chaos. The idea itself can also be applied to organisations. In 2014 an interesting article by David Chappell presented a model to measure Entropy of Hierarchical Organisations (Chappell and Dewey, 2015). Essentially the idea is that Entropy destroys the performance of the organisation over time. A more detailed view came into a post of Jeffrey Saltzman (Saltzman, 2009).
Sam Spurlin proposes an interesting link between the Entropic Organisation and the Negentropic Organisation (Spurlin, 2019). Negentropy, or Negative Entropy, is a concept developed by Schrödinger in his book What is life (Ho, 1994)? As he discussed the energy levels of organisms, which do not, alone, tend to chaos. In Sparlin’s view, many leaders, to fight Entropy, tend to consolidate the status quo, mostly struggling to keep the organisation “consistent” to its original Design. The Negentropic Organisation is, therefore, a confirmation of Miller’s and Mintzberg’s theory, of leadership trying to privilege Consistency over time.
What I like about Spurlin’s theory, however, is that he suggests an alternative to the two extremes, that he calls Intentional Organisation.
The idea here is not to suggest a new organisation model, but rather to design the capability of an organisation to adapt itself, without having to choose in the trade-off between Consistency and being flexible within the ecosystem.
The Intentional Organization doesn’t have a specific structure or compensation model or hiring process or anything else. Instead, it has a specific practice around noticing, making sense, and experimenting that allows it to change itself over time.Sam Spurlin, Designing the Intentional Organisation (Spurlin, 2019).
This translates into an Intentional Design Cycle of Deliberately focusing on Noticing, Making sense and Experimenting. And constantly repeat.
And it is precisely because this cycle is so much linked to the reality of the individuals living in the organisation and the ecosystem in which the organisation lives, that makes it impossible to look at any off-the-shelf solution.
Consistency is a critical attribute for every organisation. It should span across all its organisation elements, from Purpose to Strategy, from Business Model to Operating Model, from Organisation Model to Capabilities. However, fighting for Consistency often leads to suboptimal results because the organisation becomes less and less able to cope with the change induced by the external environment. In fighting for Consistency too often, leaders fail to recognise external change drivers. Until this becomes merely unavoidable. Here some organisations are capable of reacting through a disruptive transformation that creates a new system of Consistency. But many fail, choosing to go for make-up changes, which end up destroying the internal Consistency, create confusion and ultimately can cause the death of the organisation.
The alternative to this is in Intentionally and Deliberately Designing an organisation built for resilience and flexibility. If this might be easier at the inception stage of the organisation itself, it also needs to be translated into a continuous intentional design process that trains the organisation in always Listening to the Environment, making sense of change, and adapting when and where is needed across all its organisation dimension.
Essentially, coming back to Mintzberg, the Intentionally Designed Organisation is the one that is capable of maintaining both the internal Consistency (Business Model – Strategy – Operating Model – Org Design – Culture (Currie, 2019)) and the external one (Customers – Stakeholders – Ecosystem – Sustainability) without any trade-offs between the two.
When people feel comfortable and confident, when we understand how things work, when we can move through the organisation and the ecosystem seamlessly without needing to learn or figure it out, then we’ve reached a status of Intentional Design.
A difficult result to achieve, but probably a real challenge for the organisation design practitioner of today, that needs to reinvent entirely, as this translates into a continuous design, similar to what is proposed by Naomi Stanford but requires many more tools and a truly systemic view of change. After all, we have seen some already advocate for an entire branch of Science of Intentional Change (Wilson et al., 2014).
On the last note, who can be the owner of this design process? The answer is not easy as everybody should be accountable in an organisation for its Design. Here I call in the concept that Bjorne Bogsnes did in his book on Beyond Budgeting, when he mentions a role for HR, Finance and Agile IT to drive the Operating Model and Organisation Design. I agree that these three disciplines, with their aggregated knowledge, are essential in the implementation, but it is also necessary to embed the entire corporate leadership into this effort (Collins, 2018). Something that we need to remember when we think of partial domains like Digital Transformation.
Intentional Design is an Act of Deliberate and Purposeful Leadership
What’s good about it? Well, organisations that have been driven through Intentional Design are recognisable by high levels of creativity, participation, happiness. In a word, they exploited their Human side for greatest performance.
Consistency and Intentional Design within the Organisation Evolution Framework
I’ve recently introduced a Visual Framework that allows visualising all essential building blocks of Organisation Design. Intentional Design is the Critical Element linked to Leadership, the fifth building block of the Model. Additionally, one of the objectives of Leadership is to create the needed Consistency among the different components of the model, in a dynamic and integrated way.
Introducing the Organisation Evolution Framework
Visual representation of Organisation Design building blocks and their dynamic relationships.
Now released in Version 1, open for feedback.
So, what about your organisation? How does it treat Consistency? Is it ready to become Intentionally Designed?
Reference Listshow more
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Epstein, D. (2019). Range : why generalists triumph in a specialized world. New York: Riverhead Books.
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Cover Photo by Nick Fewings on Unsplash