Strategic Organization Design supports reliable performance and business velocity
Designing an organization you can rely on
Strategic organization design is the process by which the CEO creates the conditions to deliver the strategy, in a fast and reliable way while supporting growth, innovation, and talent development. Done well, it sets the conditions for every role and every role holder in the organization to create value and deliver the strategy.
Can I rely on my organization to deliver the strategy?
A friend told the story of his dream to become President of his company. His desire to lead was in part to finally have control of the organization and direct what needed to be done. After much hard work he was promoted to President but much to his disappointment he found that in occupying the top job did not make his life easier. Describing his situation he said, “You are pulling all the right levers and steering hard in the right direction. But the organization seems to have a mind of its own. You begin to wonder are those levers really connected to anything? Are your gears in alignment? Why is it so difficult to get things done around here?”
As a President or CEO, once the illusion of control vanishes you are left wondering how to move the organization forward quickly and reliably. You have meetings and people say the right things voicing their support for the strategy, but performance does not match their words. You look deeper and realize people are sincere in their intentions, but the organization is not reliably able to deliver. Too much time is spent on getting work through the system, removing roadblocks, and fixing breakdowns rather than delivering results.
You ask yourself, what will it take to reliably deliver on promises to the Board? How do I speed up the organization? How can I reliably deliver results I have committed to?
Performance reliability, and velocity
Reliability
Reliability means that the organization can be relied upon to deliver on its mandate, strategy and desired results meeting the necessary requirements timeliness, cost, quality, and quantity. People make commitments and the organization structure and systems are designed to support their actions rather than interfere with their ability to keep these commitments.
Reliable performance across an organization does not happen by chance. Reliable performance is an outcome of designing the right work at the right levels and nesting the work into roles which are aligned to strategy. It is the result of effective grouping of work, so jobs are full and robust, and overlap and duplication are eliminated. It is an outcome of people being selected to roles that fully match their capacity and capability for doing the work and delivering the outcomes.
Accountability and authority are distributed across the organization, creating an accountability system where employees understand their work, and how that work aligns to strategy. They understand what outcomes they are accountable for, what decisions they can make and when they need to work with others to get help or receive support. They understand the work of their managers, the work of their subordinates. They understand the work of their peers. They are held accountable to do this work and are trusted to get it done. Role authority is clear and aligned to role accountabilities. With an overall understanding of the organization design, role holders understand when to operate unilaterally and when they need to coordinate work within their own teams or across the broader organization. They know decisions they can make without needing to consult others, and when others need to be brought into the decision process.
Velocity
Velocity is an outcome of reliability. When employees can focus on completing their work and managers do not spend their time addressing breakdowns and removing roadblocks, the organization speeds up. Rather than relying on a few stars who can work around logjams in the system, those logjams have been designed out.
Process management and continuous improvement are tool sets that have been deployed for decades to improve organizational performance horizontally. Strategic organization design complements these tool sets, providing a way to address both vertical (layering) and horizontal (grouping) issues simultaneously to improve the efficacy and velocity of organizations.
Reliability and Accountability
The longer individuals work in an accountability system the stronger the accountability culture becomes and the more reliable the management systems become. When you have a reliable organization structure:
- Senior management work is focused on what is next while holding operational leaders accountable for operational results.
- Managerial leaders are held accountable for fulfilling their leadership accountabilities to support employees and employees know what to expect from their managerial leaders.
- Employees are accountable to carry out their work and feel trusted and supported to make decisions and deliver on their commitments.
- Decisions are nested in the right roles so time waiting for approvals is reduced and second guessing is eliminated.
- Cooperation from other parts of the organization is designed in and cross boundary teamwork is a natural function of how things get done.
Organization velocity and reliability are outcomes of organization design aligned to strategy. They are not dependent on having superstars who can break log jams in the business, because strategic organization design eliminates those logjams and enables all leaders and employees to fully contribute to the success of the organization. In the coming weeks we will discuss how strategic organization design supports innovation and growth, talent development and retention, agility, and value creation.
This blog is part of our ongoing series Organizations that Work. To see all of the blogs in the series that have been posted so far, click here.
Every Tuesday over the next few months, we will be posting blogs that take you from the pain of poor organization design, to identifying the root causes, to the benefits of undertaking strategic organization review. We will discuss the steps needed to effectively align your structure and work with your strategy, and we’ll discuss the processes that take out the guess work and help you to get it done. Through it all we will discuss how to lead the change from start to finish.
If you’d like to speak with us about how we can help you on your journey to an organization that works, please follow us on LinkedIn or book a call directly with one of our partners.
Our approach draws on several bodies of work including Stratified Systems Theory, the work of Dr. Elliott Jaques. For more on Dr. Jaques and his work visit the Requisite Organization International Institute at ROII Requisite – ROII Requisite.