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What is Organization Design Part 1: Why is it Important?

the everyday innovator interview videos Mar 13, 2021
 

What is organization design?

From our perspective, organization design aligns the stakeholders and their 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 rituals, symbols, and heroes of the organization make the culture explicit and an integral part of its design. Custom organization designs are tailored to the unique characteristics (context) of the organization. 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 for an organization today.

Why is it important now?

Organization design is an important topic today because we face the double 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 does seem to be changing faster and faster each year. The pace and degree of change do seem to be continually increasing. Also, the external operating environment is 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 not only survive but thrive in this dynamic environment.

What kind of designs do we need?

The organization designs that we need today are integrated, flexible, and agile systems aligned with the stakeholders, strategy, and scorecard. Now, when some people think of systems, they think of bureaucracy. Systems can undoubtedly be rigid, slow, and resist change if that's how you design them, but systems can also be designed to 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; it is taking the time out to be the architect of your organization 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 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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