Organization Design Part 2 - What is it?

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

Some people say organizations don’t exist because they’re not material things but rather concepts or collections of concepts. However, many physical things or artifacts communicate what an organization is and how it works. So, if we think of an organization as information, then many artifacts represent the organization’s design and core ideas and concepts. A variety of tangible artifacts represents everything from understanding the needs and requirements of our stakeholders, including the customers, to the strategies that we lay out and visually display with business models and goals that we write down and track, along with systems and the way we describe our methods and the metrics or scorecard that we use. So, organization design is the design of the underlying concepts, the artifacts that communicate those concepts, and their interconnections. The most critical design issue is aligning the individual components or artifacts and their information to be consistent and coherent.

Along with stakeholders' tangible artifacts, strategies, systems, and the scorecard, culture is also a key element. For many people, culture is a pretty squishy concept and difficult to get your “arms” around. People often think culture is squishy because values are vague, and they can’t see values directly. So when we talk about designing culture, we’re talking about designing things that are consistent with the values that we want people to exhibit in the organization. The artifacts we can create, including rituals (practices and processes), symbols, and heroes, influence culture and its manifestations.

Rituals

How do we do things in the company? How do we have meetings? What are those rituals? We often don’t call them rituals because that’s what anthropologists call them, as opposed to business people, but that’s what they are. These include the practices and processes of the organization. How we do work, make decisions, etc.

Symbols

We also have symbols, everything from reserved parking slots to the type of office you get and (in years past) separate washrooms and eating facilities for different categories. Those are really important symbols. They tell you things about the company's values.

Heroes

We hold certain people up and tell stories about founders, sometimes the great engineers who are the famous ones in the company. We tell stories about heroes, hold them up, and revere them. The values that their behaviors represent are part of the culture. When you choose your heroes, they should be people who display the values or behaviors you want in your organization.

While organization design isn't like designing a physical object, we use design thinking and design tools to create organizational artifacts and show how they fit together. These artifacts range from the systems and how we operate to the heroes we have and the criteria we use to select those heroes. All of that is designed, whether consciously or unconsciously. We’re proposing that you do that intentionally, think it through, test it, and adjust it.

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.