The New Movement of Organisation Design
Design and development
The terms ‘organisation design’ and ‘organisation development’ are often conflated and attributed to the same meaning in the corporate world. After all, both look to raise performance and lower costs. However, they are different approaches and produce different outcomes.
‘Design’ involves detailed analysis, design, and editing of structures, roles and processes to realise the organisation’s strategy and goals. It defines the size and shape and how the firm will function. It is strategic, so it should be conducted every three to five years and tends to be the domain of the Chief Executive or Managing Director. As it is an infrequent activity, few people have the necessary expertise and experience to design an organisation competently. Typically they are to be found outside the company and brought in for a short time for the specific project.
‘Development’ involves improving the organisation’s capabilities by developing its staff and systems. It enables the sustained improvement of performance through the ongoing involvement of its. The approach usually rests with the Chief People Officer or Human Resource Director. It is an ongoing long-term endeavour that requires skilled practitioners who are typically full-time employees.
Design or development?
When the company is required to alter its direction and make a fundamental change in performance and cost quickly, it is best to redesign the firm and then, once implemented, follow it up with an organisational development programme to embed and refine the changes. When a lower level of change is required, and years are available to achieve its goals, it might be best to adopt a development programme.
A new generation of designers
Too many traditional experts, specialists, academics and corporate leaders are trapped in established paradigms of management theory on organisation design.
The new generation of organisation designers are disrupting the challenging disciple. They are moving away from the technical, mechanical tools and units of analysis.
They design for ‘value and purpose’ and are looking further afield for new and alternative sources of inspiration.
Less but better
Some may find it surprising that in organisation design the principles of Dieter Rams can be an invaluable guide for modelling corporate entities. Rams, a German industrial designer, developed a set of principles for ‘good design’ that have stood the test of time. These principles are widely considered the fundamental guidelines for creating a functional and aesthetically pleasing product.
He instigated a new breed of designers, including the famous Jony Ive, who created the design language for Apple’s electronic devices. His secret? Rams called his approach ‘less, but better’.
The less but better philosophy is as relevant to designing an organisation’s operating model as it is to developing a consumer product. It is entirely feasible to have less waste, less confusion, less cost and less organisational friction, and at the same time have better performance, a better culture, better customer satisfaction and better decision-making.
One should use the 3D process for designing an organisation design: discover, data and design.
Discover
Today’s firms realise that they need a strategy that clearly defines their purpose and the value that they produce. And, in turn, the departments, teams and every individual within the firm need to be arranged in a manner that directly contributes to the strategy, goals and objectives.
Once an organisation can clearly describe its purpose and value, a CEO will have the guiding principles to work with a design specialist to create an operating model that omits the unimportant to emphasise the essential aspects.
The organisation’s strategy, structure and culture should be explored and examined to do this. This review will enable the executive to discover where there might be misalignments, mismatches and matters affecting performance.
A frank discussion follows to agree on what the future organisation design must address, setting the design parameters.
Data
Another Dieter Rams design principle is that a design must be detailed and nothing must be arbitrary or left to chance. Care and accuracy in the analysis and design process are requisite.
Data must be collected to perform an empirical, evidence-based analysis. If done right, the assembled information will produce millions of data points. We live in the age of big data, and our ability to rapidly collect, process, distribute, analyse and present complex information drives us. Designers must look to visualisation techniques to tell the story of their data in an accessible way.
With such a large volume of data and information, it is easy to spend months analysing it, hoping that some insights will be found. Formulating hypotheses and finding the data that support or refute them is better and takes less time. Conclusions can then be drawn that set a foundation for the design.
Design
An organisation brings people together to satisfy specific needs and wants. Good design emphasises an organisation's and its members' usefulness while disregarding anything that could detract from its purpose. It should clarify the organisation’s structure. At best, it is self-explanatory and has an obvious logic to it.
And, of course, let’s not forget that an organisation is a social entity – a group of people working together towards a common goal. Good design is sensitive to people’s social needs and allows them to flourish and be nurtured.
The output of the design process should be to establish a range of ‘base case’ solutions – operating models that fulfil design criteria established during the discovery stage. Then, set out a range of variations of the base cases to be prepared for future changes in circumstances.
The last step of the design phase is to calculate the benefits of change and confirm that they align with expectations.
Adopting a well-designed value and purpose operating model can produce ‘less but better’ for all – better products and services for customers at a lower price, better performance for companies at a lower cost, and better job satisfaction for staff with less conflict and stress.