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  • Writer's pictureMarisa Guerin

The Power of Organization Design

Marisa Guerin, PhD – March 16, 2021

When I worked in corporate training and development and eventually as the senior Human Resources executive within a global corporation, my colleague Jim and I were always fascinated to observe how people thought about the “organization.” For some people, it was simply the name on the building and on the letterhead, a public identity. For others, it was the visual chart of roles and hierarchy that defined who the managers and executives were and who the worker bees were. For others, it seemed to be a rather murky, cloudy mystery that nevertheless impacted them every day.

Mystery or not, organizations are powerful entities that are worth understanding better. If you work in an organization, or lead an organization, or consult to an organization, this blog offers some thoughts from the perspective of ORGANIZATION DESIGN. It isn’t the only perspective by any means, but I have found it to be especially helpful when you wish to understand or influence how the organization performs.

Here is my personal rendering of a definition to get us started:

Organizations, from simple ones to hugely complex ones, are human systems with primary tasks and designed structures; they are put together to enable numbers of people to achieve particular purposes.

Following this definition, you can see that organizations can be large, like United Airlines, or small, like the West Philadelphia Tool Library. Organizations might be legally-constituted, or informally established by the members; they can be secular or religious, physically located or dispersed virtually; and they can be formed for all kinds of reasons that range from business to socializing to public services.

It would be hard to overstate how critically important the connecting glue of the shared purpose (or primary task) is for an organization. The primary task of an organization is its fundamental purpose, the reason it exists, the main thing it must do. This is the “north star” for the members of the organization, a decisive criterion for making decisions of all kinds, especially when resources are tight. (See this link for a related blog post on teamwork and primary task.) If you have people who like to get together for this or that common interest, they may be a lively and ongoing group but they aren’t an organization until they attempt to accomplish something together that requires them to…. wait for it… organize themselves!

For example, a relaxed bunch of beachgoers on a summer day, enjoying the sun and sand, is simply an aggregate of people. But if someone gets in trouble in the water and calls for help, you might suddenly see the emergence in real-time of a rescue organization consisting of lifeguards, other swimmers, people dialing 911 on their mobile phones, and volunteers helping to carry the stricken person to safety or to provide emergency medical care. When the crisis passes, this emergent organization disappears.

Besides the primacy of a purpose, the other aspect of the definition that is worth emphasizing is the fact that organizations have an internal structure, a design. Even the quick-thinking strangers on the beach knew enough to specialize into the critical roles required to save a drowning person: lifeguards to retrieve the struggling swimmer from the water, phone callers to assemble help, skilled volunteers or beach officials giving medical attention, helpful people ensuring that the rescued person and their family get taken care of.

Obviously, institutions are organizations with more staying power because their purposes are longer-term and required sustained collaboration by many people. For the larger systems we work in, or lead, or consult to, the mostly-invisible elements of organization design include things like job titles, leader roles, unit divisions and their relationships, goals, core technologies, buildings, information systems, and compensation plans. And as we saw in the beach example, these design elements may or may not be consciously constructed – many aspects of organization design operate underneath our attention, without much conscious management.

Here’s the important thing to understand about these design elements: they are very powerful in shaping the behavior of people within the organization system.

Generally, you get the behavior that the system is designed to produce, whether it was consciously intended or not.

Individuals by themselves usually cannot overcome the power of the organizational structure to produce certain behaviors, outcomes, and capabilities. Since the design elements are often invisible, they are often underappreciated as a driver of both positive and negative results. Organizational leaders in particular must learn to understand the impact of the organization’s “wiring” on its behavior.

So here are two corollaries of this important design principle:

First, it won’t help to replace poor performers if their problems stem from the way the organization is structured. For example, if the desired speed of production is impeded by lack of access to key data or too many required approvals within the process, then individual performance is going to hit a limit, no matter who is hired.

Second, inspiring speeches and workshops about organizational values won’t be effective if organizational elements drive results that are contradictory to the values. For example, if the compensation system drives people to compete with one another for the end-of-year bonus, then insistence on teamwork and cooperation will stall. It’s like trying to drive a car with one foot on the gas and one foot on the brake.

It is very common for us to assume that the problems in people-systems are caused by the people (seems like it should be obvious, right?) but I would offer strong caution about that kind of conclusion. All kinds of organization performance issues have their roots in the design of the organization’s structures or processes, not the capacity of the people. Slow or contested decision-making can stem from confused authority lines or insufficient delegation. Lack of vision and innovation could be attributable to systems that are too closed off from their customers, providers, and local communities. Chaotic and conflict-ridden operations may arise because of the absence of the necessary coordination point – the person, office, or information system that enables many players to collaborate more efficiently.

Bottom line: when in doubt, think about the forces that might be at work to drive the behavior you want to change. Empower yourself and others to evaluate and redesign when necessary so that the ways you organize your efforts are supportive to the task and facilitate the best efforts of the people. Be especially attentive to the locus of authority and how it is distributed.

And a final point: organizations grow up. They experience both stability and turbulence at different stages of development. Some painful crises are signs of growth, not dysfunction, especially when a young organization grows past the creative, more informal founder stage. Be prepared to evolve your assumptions about how the organization should operate to take account of its increasing complexity or maturity.

Organizations are worth caring for. They are worth understanding, and they belong to us, the people who sponsor them, work in them, and keep them alive. Resist the temptation to demonize the structural realities of complex systems and to romanticize the ideals or relationships in an organization.

It’s all necessary, it’s all valuable, and it’s the way we humans co-create our small and big world!

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