Creating Your Organisation: By Accident or Design?

Organizational Design

I work with a variety of clients. They range from small, to medium, to global players. Some are very successful on the face of it, but are they properly geared to reap future rewards and seize new opportunities?

As businesses evolve, it’s easy to lose sight of what the business is about and who it is trying to serve.

On Pursuit and Desire

How are you looking at your organization as it goes through time? Do you think of it as some stoic and stagnant? Or do you consider how time and circumstances impact it and its effectiveness?

Consider these ideas:

  • The pursuit of Mammon can blind us to our true purpose and potential, leading us down dark alleys as we chase the ‘next big thing’ which was never in our core competence.
  • The desire to hold on to what we already have can tempt us into a state of atrophy and lead to ultimate demise.
  • As businesses become more and more ‘corporate,’ people in each department can begin to see their department as their primary business, and not as a supporting role to the true business proposition.

Considering the Stakeholders

Customers invariably suffer as they are left out in the cold when companies forget who they were created to serve.

Consider this from the past:

I once worked for a Passenger Transport Authority whose role it was to organise and monitor the provision of public transport across a region. During an improvement meeting, I struggled to get the team to realise that Passengers were one of their primary stakeholders.

Everyone else was a stakeholder, it seemed, but according to this team, passengers didn’t qualify for that status because they had no choice but to use the service. If they could afford a car, they’d use that instead.

Becoming so removed from those who make sure you are in business is a dangerous and foolhardy gamble.

Why does it happen and is it inevitable? Do businesses just get too big, and then get too big for their boots as a natural result of growth? Of course not. But it often happens because they don’t spend the time on organisation design.

Organizational Scale

It’s a big leap moving from serving ten customers to fifty. It’s a real challenge increasing your product range by 10%. It’s not easy increasing your headcount even if you can find good people to join you.

And remember this: Keeping agile, creative, and bold as you grow demands expert planning.

There’s a danger that processes become too fixed, rules become inflexible, systems become locked and decision-making becomes sluggish. And there’s always the potential for people to become disenfranchised, overworked and demoralised.

Not all employees see the growth of their company as a good thing if they are having to work twice as hard to prop up that growth.

Organising for Success

I’ve seen companies muddle through for a few years on goodwill alone. Loyal customers (they do exist!) give them a chance, and loyal staff go that extra mile. But sooner or later something gives. There’s always a limit to goodwill.

Organisation Design is a simple principle which begs us to answer the question:

“Is our organisation sufficiently well-designed to support our plans for growth?”

For some companies the question they also need to ask is “is our organisation sufficiently well-designed to make sure we can carry on doing what we’re doing today?”

Corporate Life Cycle Model

Corporate Life Cycle ModelIchak Adizes describes the trajectory companies can go through in his Corporate Life Cycle Model, but the journey to Prime state is far smoother when companies get a grip on organisation design early on.

And the trajectory towards corporate Death isn’t inevitable if the organisation is continuously being redesigned to align with its strategy.

Most companies go to the trouble of drafting a strategy because they recognise they need to have some idea where they plan to take the business.

The process is often long and arduous, involving highly paid executives enjoying five-star treatment at an off-site venue over several days.

Completing the Organisational Design

But without the complementary org design process, many strategies fall over when they get to execution stage. Why? There are many reasons, some of which might be:

  • The IT systems aren’t geared up to make the necessary data available or in a format that is of any use
  • No-one bothered to tell the staff what the strategy was because there wasn’t a mechanism for cascading information or objectives
  • The skills required to deliver the strategy don’t exist because they weren’t identified, developed or recruited
  • The current infrastructure/estate is inadequate to accommodate growth
  • Roles and boundaries have not been sufficiently well-articulated so people are unclear about what’s theirs and what’s someone else’s
  • Reporting lines are muddy, spans of control are unclear
  • The culture is ill-defined: values don’t exist and if they do, aren’t lived
  • The environment is oppressive
  • People don’t really know who their customers are or how to service them well

Any one of these will kill a strategy dead or make it nigh on impossible to deliver it effectively!

So the next time you sit down to dream, strategize and agree what you want for your business, don’t forget the poor relation: organisation design. This will be the mechanism that enables you to bring your strategy alive and to fruition.

So, how would you describe the design or your current organisation? Does it look like it was purposefully design or was it done more by happenstance? What can you do to begin to add order to some of the chaos that exists where you work? I would love to hear your thoughts!


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Tim Lambert
Tim Lambert
 is CEO of Kay-Lambert Associates Limited

He is a professional leadership coach working with groups and individuals
Email | LinkedIn | Twitter | Web | Blog | Skype: timlambertkla

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1 Comment

  1. asimancas on November 26, 2013 at 12:18 am

    Reblogueó esto en Network of thought.