Make 2014 the year to BONSAI your organizational design

Do most business leadership teams think deeply about the design of their enterprise? Generally no. The design and internal behaviors of organizations develop organically over time as an enterprise grows.  If you believe that organizational design is a bi-product of good management and effective leadership, you could argue that OD is an unnecessary profession.  Certainly, some organizations work exceptionally well WITHOUT teams of consultants, HR and Change Management practitioners running all over them with measuring sticks and psycho-analysis tool-bags.

I often find myself debating whether it's better to have an enterprise that flies by a 'seat of the pants' management method or alternatively adopts 'systematic management' methods.  The great joy and challenge of understanding how organizations work is their a unique blend of science and creativity, of systems and people, of tools and culture.

Getting the best out of an enterprise usually comes down to a blend of everything.

But how do you get the blend right? Even when organizations are led by great leaders, and have great people in them doing the right things, it doesn't hurt for everyone to know 'what the plan is' and 'how they contribute to it'.  And there's the rub.  When organizations aren't thoughtfully designed, they grow in an unkept way. They grow 'slack' in their processes, theifdoms build, budgets grow, resource pools become ever larger and unkept.  Department managers grow their teams based on departmental needs. But what of the big picture?  What if markets and customer needs are changing?  Focusing on department needs and priorities, resources and plans could simply be encouraging wasteful practices to be repeated.

Most people will be familiar with Bonsai; the Japanese art form using miniature trees grown in containers. The main reason for the pastime lies the opportunity to contemplate the world by performing a slightly trivial task. The result of the activity is a more aesthetically pleasing tree design.  But the ACT itself, of nurturing an attractive tree design through a constant vigilance on the part of the practitioner, has huge parallels to the role of an Organizational Designer.

Businesses require a ROLE that is constantly monitoring the health and growth of the enterprise - an Organizational Design practitioner. Think of it as the person that monitors the BONSAI and makes sure it grows in a healthy way.  Without this role to shape the growth of an enterprise into a thoughtful design, it soon becomes unkept.

Organizations work better when resources are aligned in the best possible way to the things that need to be done to achieve stakeholder outcomes.  Designed well and the people working in the enterprise will produce more with the least resources - i.e. You get more growth for your feeding and watering. (Ask business leaders to state what proportion of the activity that happens in their enterprise contributes directly to strategic goals and you'll be surprised by the answer.  If they say any more than 65% they'd be very lucky.  And that's a lot of someone's energy being wasted on things that don't really sum up to very much value at all.)

Organizations CAN be designed to work in an optimal way.  Partly it's about agreeing on a smaller number of agenda items that REALLY will make a difference to the success of the enterprise: Most organizations (and management teams) try to do too many things.  But it's more about ALIGNMENT: aligning strategy to stakeholder needs, aligning customer value with stakeholder value, aligning processes to outcomes, aligning roles to processes...

As an Organizational Designer, trying to make sense of all the data needed to comprehend how an organization is designed and how to adapt it can be mind-bending.  Many-a-time I have blown up my spreadsheet owing to the volume of data that needs to be brought together and understood!

Like most professions, Organizational Designers require tools to harvest data, build it into logical structures, maintain it and make sense of it.  The key areas are:

• INSIGHTS: Data that describes and evidences the drivers that underpin the decisions made on strategy.
• PERFORMANCE AND STRATEGY: Data that describes the strategy of the enterprise, how it plans to achieve the stated outcomes and what progress is being made.
• POLICIES AND PROCESSES: Data that describes how the enterprise operates to produce its outcomes.
• ROLES AND ACCOUNTABILITY: Data that describes how duties are divvied out to people and resources.

The good news is that unlike the BONSAI owner, you don't need to go buy your tree!  This means you only need to think about where to start trimming and nurturing your design.... NO!

The first job is to make sense of the existing design (what's the point in Change Management if you don't know what you're trying to change into?).  Few organizations have a clear picture of what their strategy is, who does what and why, what processes and policies exist and how they dovetail together. That's where an Organizational Design Tool-Kit comes in.  As the name suggests it's a tool-kit for Organizational Designers: a relational database-powered system that helps OD pratitioners to make sense of the big data that defines how an enterprise works.

Using an OD Tool-Kit, it's easy to bring the large quantities of data together and articulate the design of the enterprise.  Then you will see the BIG PICTURE of your BONSAI.  Only then should you consider your first trim ;-)