From the course: Organization Design

Organization design definition and triggers

From the course: Organization Design

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Organization design definition and triggers

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Imagine, two companies in the same industry. Both make similar products or offer comparable services, but one delivers more value to customers, employees, shareholders. Why? Value is created through just three levers. Strategy, talent, and organization. Strategy is all about choices of products, services, markets, and business models. Talent is about ensuring you have people with the right experience and skills. Most leaders spend a lot of time on strategy and talent. That's good. But they don't spend enough time on organization. Organization provides the environment that allows people to contribute their unique talents against a shared mission when they come to work everyday. Organization is what makes smart, hard-working people in one company feel frustrated because they don't see results for their effort. But organization is what makes people in another company feel great about what they do together, to innovate and deliver on big ambitious goals. Organization allows us to get more done together than we can alone. Doesn't matter if we're sitting together face-to-face or working virtually around the world, the organization is still there shaping behavior. Now I'll be the first to admit that when we start to talk about organization, it can feel a little abstract, because we're talking about forces that influence power dynamics, collaboration, motivation. So what is organization design, and how can we design something we can't see? Organization design is a set of frameworks, tools, and methods that make these unseen forces visible. It gives us a common language. Through the use of organization design tools, we can work together to analyze misalignments, generate and evaluate options, make decisions, and create better workplaces. So when should you be thinking about organization design? First, when you change strategy. If you are targeting new customers, entering new markets, changing your business model, how you make money, then you likely need to redesign your organization in some way. Second, when you're not getting the performance you want. You might've made some changes to reflect a new strategy, but perhaps you're not seeing results. Symptoms might be that decisions are slow. You notice internal competition. Costs are too high, or people aren't putting their focus on the right work. Lastly, when the external environment changes. In this case, your organization might be perfectly designed for the past. When competitors change the game with new technology, customers and consumers demand new solutions, or regulators change the rules, then your organization needs to change, too. So start looking at your organization. Is something changing in the company or externally that would cause you to reconsider old assumptions? Is it easy for you and your colleagues to work together? Does it feel like everyone is clear on the goals? Do they feel enabled and empowered to contribute their best everyday? These are the questions that organization design can help answer.

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