Benefits of Better Organization Design

everyday innovator interview

Fewer Fires

I think the first tangible benefit is you have fewer fires to put out. Often, we spend much of our executive time putting out fires. Working issues between those silos that got "mucked up" because we don't have a well-oiled process or culture to facilitate that work between the different functions. These fires happen both in one-off projects, and it happens in repeatable processes for service delivery. So the first thing is we have fewer fires to put out. Once we start having fewer fires to put out, it frees up a little of our time.

We have to let go of our feeling of contribution and importance because we're good at putting fires out. Many people make careers out of putting fires out, and that's how they get promoted because they've saved the day so many times. We often have heroes in our organizations that are firefighters. They're heroes because they are firefighters. You have to make a switch to where you stop rewarding firefighters and start rewarding fire prevention.

So I think the first benefit that's real and tangible is you start putting out fewer fires. That frees up some time for whatever you want, whether product development or strategy or making more improvements. Either way, you start freeing up some time. That's pretty important because you have to carve out some time to redesign and transform activities and make them a priority.

Sustainable Excellence

The second thing is you get rid of (or reduce) the boom-bust scenarios. All too often, part of our organization will come up with a cool idea or product. Marketing will be doing a great job, and they’ll get a lot of customers excited about it; we get a lot of preorders, and we maybe even get a lot of initial sales. All of a sudden, we find out that we can’t make it at the quality we thought we could, and because we have quality issues, we have a lot of service calls, and we have a lousy service process we don’t deliver. Suddenly, we did okay at part of the value chain and poorly at the other, and our results and our sales start coming back down. So we end up with these boom-bust curve scenarios. It’s evident in the sales one, but it also happens in almost all results. We’ll do something to make the results change for a short period, but then it comes back to whatever it was before.

The other benefit is these changes result in more sustainable changes. Because when we change the design of things and change the way we do things and then that influences what the people see and hear in the organization, it influences what they think and how they feel about those things, which affects their behavior. So if you’re going back and changing the root cause of the behavior, which is the design and the artifacts and the leadership that combines with that, we’ve been talking a lot about design, but hand in hand with design, is leadership every day, all day. It’s not like you can design it; leave it alone, and it will do the job for you. I wish it were that way. It’s not like residual income or things like that where you can create something and go to sleep. You create it, but then you have to lead it all the time. The combination of good leadership and good design creates different behaviors in people. The changes have a greater ability to stick, and then consequently, we get more sustainable results, and we don’t get these boom-bust type scenarios. That’s probably benefit number two.

The last benefit is related to sustainability as well. If you’re taking from one group to serve another, you can only do that for so long. Sometimes we can do it for years, and so we don’t really recognize it as an issue, but eventually, that system will correct in part. It gives us, also, high performance that’s long-term sustainability. Hopefully, it’s an economic engine that we’ll be happy to be part of and maybe even help fund our retirement and still be there when we’re retiring.

The video is an excerpt from a podcast with Dr. Chad McAllister at The Everyday Innovator. For more podcasts on innovation and product develop check out the podcast on his website and iTunes.


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