Designing Organizations For High Performance

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Developing & Implementing Effective Organizational Design

Overview & Considerations

Strategy | Organization | Execution

Change that Matters. Results that Count.™

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Legacy Organizations Often Carry With Them BothVisible and Hidden Costs…Failures of Performance… and erosion of ability to keep pace with increasing performance demands

Redundant staffing & services, & inconsistent messages to customers

• Organization has become highly fragmented & dispersed

• Coordination / governance mechanisms absent

Excessive layers, narrow spans of control… mean bureaucratic build-up, with slow “bottle-necked” decision making

• Huge potential for stripping out costs & addressing root causes of organizational dysfunction & obesity

Institutionalized layers of management, causing micro-management & lack of accountability

• Work not delegated to appropriate levels.

• From outside, organization looks bureaucratic or incompetent … but the real culprits are ill-defined accountabilities & incomplete performance measures

• Redundant levels & approvals enable (or force) staff to “pass the buck”

How Does Your Business

Structure Drive (OR Limit)

Performance?



What is Organizational Design? Good organizational design is the “full-system” plan that defines:• Overall organizational goals and strategy,

• The grouping and assignment of tasks,

• The processes and systems by which tasks get done,

• The structuring of functions, jobs and roles,

• The relationships among organizational units (the cross-organizational linkages

among business units and functions),

• The assignment of resources,

• The forms of decision-making and governance,

• The focus of managerial behavior, time and attention,

… and other key elements that enable an organization to marshal capabilities, and efficiently and effectively deliver needed results

A good organizational design comprehensively addresses the key performance issues



Organizational Practices Evolve During Periods of Growth As Organizations Solve “Earlier Problems”, the Next Challenges Are Created

“Evolution and Revolution as Organizations Grow”, Greiner, Harvard Business Review, May-June 1998



Organizational Practices Evolve During Periods of Growth As Leaders Solve “Earlier Problems”, They Create New/ Next Challenges

CategoryPhase 1:Creativity

Phase 2:Direction

Phase 3:Delegation

Phase 4:Coordination

Phase 5:Collaboration

Management Focus Make & sell Efficiency of operations Expansion of market Consolidation of organization

Problem solving & innovation

Organization Structure Informal Centralized & functional Decentralized & geographical

Line-staff & product groups Matrix of tear

Top Management Style Individualistic & entrepreneurial Directive Delegative Watchdog Participative

Control System Market results Standards & cost centers Reports & profit centers Plans & investment centers Mutual goal setting

Management Reward Emphasis Ownership Salary & merit increases Individual bonus Profit sharing & stock

options Team bonus

Resulting Crisis Leadership Autonomy Control Red tape Psychological saturation

Observations about Company Evolution

What phases Have Been Evident at Your Organization?What Worked Well/ Did Not Work Well In Each One?

“Evolution and Revolution as Organizations Grow”, Greiner, Harvard Business Review, May-June 1998



The “Right” Way to Structure an Organization Depends on the Set of Linked Elements Required to Accomplish its Top-Level Goals

Style

Top- Level GoalsSkills

Systems

Structure

Staff

Strategy

The people in the organization, in corporate demographics, not individual personalities.

Org chart/ descriptions showing who reports to whom and how tasks are divided up and integrated.

The coherent set of actions aimed at gaining a sustainable advantage over competition.

How managers behave, through invested time, attention, and symbolic actions.

Capabilities possessed by the organization as a whole as distinct from the individuals.

Fundamental ideas, guiding concepts, values and aspirations, sometimes unwritten, beyond formal statements of corporate objectives.

The processes and procedures through which work gets done.

Waterman, Peters & Phillips, “Structure is Not Organization,” Business Horizons, June 1980 - modified

Cross organizational linkages – defined & implemented - tie these elements together



Implementing a Robust Organizational Change Builds On The Linked Design Elements for a Strong Foundation

Current StateWhere are we? How do we know? What’s our fact base?

Desired Future State

Top-Level Goals (incl. Vision & Values)

Strategy

The Need for Change:Complications

Systems & Processes

Structure

Implementation

Reinforcement (Style, Skills)

Source:

What is the Current State of

this Foundation? Staff



Reinforcement: Organizational Leaders Define & Model the New Organization and its Culture In Six Ways…

Members of organizations watch leaders to see...

1. Where do leaders focus systematic attention?

2. What (results/ behavior) do leaders measure & reward?

3. How do leaders frame & respond to critical incidents?

4. What are practices/ patterns around who gets hired, fired, promoted?

5. How do leaders allocate resources?

6. What do leaders consciously model, teach & coach?

Schein, Edgar, Organizational Culture & Leadership, 1992.

How do leaders

emphasize and

reinforce the overall structure

and culture?



Important Stakeholder Groups Each Have a Role to Play in the Design & Implementation of An Organizational Design

Leader & Exec Team1. Determine the Design FrameworkWhat organizational capabilities do we

need to deliver on the strategy?

Current State Assessment

+ Inventory: Vision, strategy, values; Next-period and future-state business objectives; organizational demographics; …• What is the gap between where we

are and where we want to go?

2. Design the Organization…

StructureWhat structure and org

roles meet strategic design criteria?

Processes/ Lateral Capabilities

How will work get coordinated & integrated across business units?

Reward SystemsHow do we measure & reward performance at

individual, team and org levels?

PeopleHow do we select &

deploy people into new roles, manage their

performance and support their development?

3. Develop Specific Details/ Plans…By function and business unit, test/ assure the pieces all work together

4. Implement the New Design…Develop and rollout a transition plan

Leadership Team

Steering Committee/ Work Groups

Whole Organization, Each Org Unit

Galbraith, Downey, Kates, Designing Dynamic Organizations, 2002. (modified)



Toolkit – Samples Available on Request

Vision/ Mission/ Strategy/ Objectives

Change Management/ Strategic Communications

Culture Assessment and Intervention/ Shaping

Program Management and Project Execution

Process Mapping/ Improvement

Risk Assessment/ FMEA

Lean Improvement/ Non-Value Added Reduction

Failure Mode Assessment/ “Pre-Mortem”

Organizational-Functional Design/ Development

• Organizational Design/ Implementation

• Human Resources – Job Profiling/ Planning, Compensation evaluation/ planning/ design

• Service Level Agreements

Discussion Draft - Do Not Circulate



How Will Your Organization Develop & Implement Smart Design?

If you want to build a ship, then don’t drum up men to gather wood, give orders, and divide the work.

Rather, teach them to yearn for the far and endless sea.

-- Antoine de Saint-Exupery

Metamorphosis Management Group helps leaders execute strategy, build organizations, and create results. We bring our years of experience to complement yours.

We are former managers, operators and consultants—who have worked as senior leaders in general management, business development, sales & marketing, organizational effectiveness, operations and consulting.

We partner with clients to get top- and bottom-line results, and to build/ develop client leaders – in context, on real business problems in their organizations, with their peers/ senior team colleagues. Our core work is supporting leaders: helping to enlarge personal capabilities, engage organizations, and create desired futures.

Our clients achieve objectives through a structured process of engagement:• Leaders set and communicate direction and targets• Working teams

• … Define clear thinking – shared business logic, terms definition and operating-model “languages”

• … Surface data – just the right amount – to support effective analysis and prioritization of the opportunities in your “risk portfolio”

• … Drive decision-making processes through facilitated organizational-management and workforce engagement

• Generate prioritized sets of options• Create effective organizational implementation, execution, and change – on time, on budget



Contact Us

Evan Smith

[email protected]

http://www.metamg.com

[email protected] ofc

mailto:[email protected]

http://www.metamg.com/

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