Benefits of Better Organization Design

Excerpt from a 2017 podcast with Dr. Chad McAllister at The Everyday Innovator

Fewer Fires

I think the first tangible benefit is having fewer fires to put out. Often, we spend much of our executive time putting out fires. Working issues between those silos get “mucked up” because we don’t have a well-oiled process or culture to support that work across functions. These fires happen in one-off projects and in repeatable service-delivery processes. So, the first thing is that we have fewer fires to put out. Once we have fewer fires to put out, it frees up 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 by putting fires out, and that’s how they get promoted because they’ve saved the day 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: stop rewarding firefighters and start rewarding fire prevention.

So I think the first real and tangible benefit is that you start putting out fewer fires. That frees up time for whatever you want: product development, strategy, or making more improvements. Either way, you free up 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 eliminate (or reduce) the boom-bust scenarios. All too often, part of our organization will come up with a cool idea or product. Marketing does a great job, and they get a lot of customers excited about it; we get a lot of preorders, and maybe even a lot of initial sales. Then we find out we can’t make it at the quality we thought we could, and because of quality issues, we get a lot of service calls and 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 sales started coming back down. So we end up with these boom-bust curve scenarios. It’s evident in the sales, but it also happens in almost all results. We do something to change results for a short period, but then they return to what they were before.

The other benefit is that these changes lead to more sustainable results. When we change how things are designed and how we do things, that influences what 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 must lead it all the time. The combination of good leadership and good design creates different behaviors in people. Changes stick better, so we get more sustainable results and avoid boom-bust scenarios. That’s probably benefit number two.

The last benefit is also related to sustainability. 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, so we don’t really recognize it as an issue, but eventually, that system will correct in part. It also gives us 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 2017 podcast with Dr. Chad McAllister at The Everyday Innovator. For more podcasts on innovation and product development, check out the podcast on his website and iTunes.