Organization Design Part 1 - Why Important?

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

From our perspective, organizational design aligns stakeholders’ needs with the organization’s strategy, systems, and comprehensive scorecard. These four “cornerstones” are held together by the culture (values, symbols, rituals, and heroes) that support and bring the systems and strategy to “life.” The organization’s rituals, symbols, and heroes make the culture explicit and an integral part of its design. Custom organization designs are tailored to the organization’s unique characteristics and context. But why is organization design an important topic now? The short answer may be that we’ve tried everything else, and we’re still struggling to make organizations perform at their full potential. However, two issues make organization design relevant and important today.

Why is it important now?

Organization design matters today because we face the dual challenge of change and complexity. I know it is a bit of a cliché to say, “we live in times of great change,” but the world seems to be changing faster each year. The pace and degree of change do seem to be continually increasing. The external operating environment is also getting more complicated. We operate in an interconnected, often unpredictable global environment that includes a wide variety of work placement options in a worldwide system of suppliers and partners, an increasingly diverse and often virtual workforce, and products and services with short life cycles driving the continuous need to innovate. These two challenges drive the need to continually rethink and redesign your organizations to survive and thrive in this dynamic environment.

What kind of designs do we need?

The organizational designs we need today are integrated, flexible, and agile systems aligned with stakeholders, strategy, and the scorecard. Now, when some people think of systems, they think of bureaucracy. Systems can undoubtedly be rigid, slow, and resistant to change if that’s how you design them, but they can also be agile, flexible, and human. I think organization design has probably always been important, but business is getting tougher and tougher all the time, and it seems that we have less and less time for improvement. At a time when leaders have limited discretionary time, the answer may not be to get better at working IN our organizations, but it may be “carving” out some time and getting better at working ON our organizations. That’s really what organization design is about: taking the time to be your organization’s architect and [re]design it and [re]build it thoughtfully and consciously to perform better today, tomorrow, and next year.

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.