At NOBL, we help ambitious leaders accelerate business transformation through organizational design. As leaders in this discipline, we’ve decided to share our perspectives and tools with the hope of educating others and contributing to the growing body of open-source knowledge.
PART ONE: WHY COMPANIES NEED ORGANIZATIONAL DESIGN
When you put the user at the center of a product design process, it’s called design thinking.
When you apply design thinking to the shared experiences of customers and employees, it’s called service design.
And when you apply design thinking to the way companies behave and change, it’s called organizational design (org design for short).
Org design is the next frontier of design thinking, and according to Deloitte, it’s an important concern for more than 90% of senior leaders. But like design thinking when it was introduced, most leaders haven’t experienced org design first-hand or had training in how it works successfully. But all of us know when work hasn’t been consciously designed.
Business Leaders Face Many Organizational Design Challenges
In large companies, many of us feel stifled. Bureaucracy stands in our way of moving work forward. We’ve become less customer centric, and can’t see how our actions impact the big picture. We’re tasked with responding to a faster world by working longer and harder, not smarter. We crave some semblance of work/life balance, but rarely find a calm moment to even discuss it. Work feels like a treadmill from which we can’t escape.
In rapidly scaling startups, many of us feel lost and overwhelmed. We know that what got us here won’t be what gets us to the next horizon, but we’re unsure what steps to take. What processes should be more defined, which should remain flexible? Will catered meals and ball pits be enough to retain our best colleagues? How do we hire and onboard the next onslaught of new employees, and who will do it? Work feels like a frenzy of uncertain choices, none of which we feel we can afford to flub.
In both large and scaling companies, without organizational design, we use the wrong performance measures, and then those measures become our priorities. We amass bureaucracies. We create busy-work. We lose our best people, and suppress the collective potential of the people who remain. Our tools shape us, rather than the other way around. Our products become more of a reflection of our org chart than our user’s needs. We lose the organizational culture we worked so hard to cultivate, and eventually we lose outright to our competitors.
NOBL has helped world-famous organizations consciously design more effective cultures and business units. Reach out to see how we might be able to help your organization.
Let’s be clear, though: you as a leader are not to blame for these conditions. These conditions are the product of a world where technology can scale exponentially, but people cannot. The latter half of the 20th century birthed the first companies large enough and wealthy enough to rival nations, and the 21st century has given rise to companies that scale to that size and power within a matter of years. Humans have simply never had to coordinate and collaborate at this scale or at this speed. No aspect of our lives is immune: we’re struggling with it in our organizations, governments, cities, and cultures.
The challenges we face at work were germinating long before you became a leader, and will continue to accelerate long after you retire. So no, you aren’t responsible for these conditions. But as a leader, you are responsible for taking action in response to these conditions.
The first thing you must do is educate yourself. Organizational design offers a set of perspectives and tools to help you see your organization with fresh eyes and to help you make meaningful, lasting changes to it.
PART TWO: DEFINING ORGANIZATIONAL DESIGN
Organizational Design is a human-centered approach to improving how people work together and how companies respond to change.
Organizational design borrows from the design thinking toolkit, chiefly: empathy, systems thinking, co-creation, and experimentation. Through iterative design cycles, organizational designers work with teams, in their native environment, to identify opportunities for improvement and test the fit of potential new ways of working.
What does this actually look like in practice? At NOBL, our outcome is always the same: high-performing firms and enriching cultures. But the format and output of our work varies during the course of a single engagement:
- COACHING: Leadership and team coaching, change management coaching, often conducted in-person embedded with the team
- RESEARCH: Sprints into competitive and comparative companies (organizational structure, budgets, processes, etc.) and assessing the existing conditions of a team or organization (often conducted, too, while onsite)
- FACILITATION: Team offsites and workshops, critical for developing cross-team collaboration and strengthening social bonds
- TRAINING: Targeted courses to address critical teaming skill gaps (e.g. cultures of continuous learning, adaptive leadership, prioritization, strategic time management, etc.)
At NOBL, these organizational design activities are conducted by teams of people with diverse backgrounds. Some of us are trained organizational psychologists and change management professionals. Others of us arrived at organizational design by leading design thinking or service design practices. A few of us are recovering management consultants. We are stronger for the collisions between our differing experiences, perspectives, and tools. We believe that this discipline can only grow more effective as people from more diverse fields participate.
PART THREE: PRINCIPLES OF ORGANIZATIONAL DESIGN
Because organizational design by its nature can affect large swaths of people with just a single change, we believe that this work must be done with care, compassion, moral intent, and wisdom. Organizations are not your petri dishes. Organizations are groups of human beings trying to be something greater than themselves and trying to achieve something that would be impossible for any individual alone.
At NOBL, we’ve developed the following organizational design principles to encode what we’ve learned from our years of practice and to remind ourselves of the gravity of what we do every day:
- Serve. An organization’s highest priority is to serve its customers and communities.
- Anticipate change. An organization should be at least as dynamic as its environment. Changes to the organization should be expected and welcomed, so long as the changes are made in service of customers and communities.
- Surrender the past. Honor what’s come before and help individuals grieve the losses that accompany change. Then, move forward together.
- Chase fit, not fads. Success is an organization well-calibrated to its environment and out-delivering on its customers’ needs. Agile isn’t always the answer and six-sigma isn’t always the problem. Context is king.
- Do no harm. Value small, “safe-to-fail” changes you can learn from quickly over a single, slow, sweeping, and risky change. From the small changes, spread and expand on what works. Learn from what doesn’t.
- Design by doing. Organizations are complex adaptive systems, meaning you can’t understand how they behave or respond to change until you introduce changes. Diagramming in PowerPoint is not organizational design, it’s organizational fiction.
- Play your zone. Focus others to first change the things in their control. Move on to the things they can influence. As you succeed together, you’ll expand both zones.
- Advocate for the individual. Organizational change is merely individual behavior change on a mass scale. Individuals need the capability, motivation, and provocation to change. Train new skills. Design better rewards. Stage inspiring interventions.
- Delay drawing boxes. Don’t start with org charts or titles. If you focus on purpose and strategies, structures will emerge organically.
- Keep work simple. There are two kinds of organizational complexity: the complexity natural to delivering what customers need, and the added complexity of bureaucracies and personal egos. Kill the latter whenever it arises.
- Make change a habit. Every team needs a recurring time and space to reflect on how to become more effective. Remember that when you document the implicit parts of teaming (norms, policies, roles, strategies, habits, procedures, and processes) you make them easier to reflect on and change.
Download our Organizational Design Principles (PDF)
PART FOUR: THE ORGANIZATIONAL DESIGN PROCESS
Traditionally, an organization will hire management consultants to tell them what to do, and then hire a change management firm to plan and oversee those company changes. Our organizational design process combines elements of both fields into a modern process that creates rapid, viral change.
- First, in any new organization, we orient ourselves. Our primary goal of this step is to understand where the organization needs to go with the redesign strategy, and what resistance to change to expect at the company.
- Second, we bring together a diverse group of internal stakeholders and align on the road ahead. Our goal is not only to determine the work ahead, but also to create buy-in early in the redesign process and enlist an army of change advocates that will lead by example in regards to what’s to come.
- Third, we divide the desired changes into “Fail-Safe” and “Safe-to-Fail” paths. Not all change is created equal: some (like the organization redesign strategy) need to be mostly right when they roll out, but most (like processes) actually benefit from layers of testing and iteration. We identify the right paths for different company changes and implement the strategy with the right teams.
- Throughout this process, we integrate the company changes being made across both methods. We stitch “fail-safe” and “safe-to-fail” changes together, both in terms of what each effort is learning and how they will eventually work in concert, to produce the desired outcomes.
- Fifth and finally, we equip the organization to no longer need us to make a change. Throughout our process, we train internal champions in our Change Making approach and codify those lessons into a unique “Change Playbook” or Center of Excellence for these models to use as they lead by example for the rest of the organization.
We’ve developed an in-depth guide to organizational change making if you’re exploring how you can design a more effective organization.
Why NOBL’s Approach to Organizational Redesign Works
Our process for organizational transformation produces unique redesign strategy results for five reasons:
- We embed with our clients. This ensures we learn directly from lines of communication within their teams, absorb their company culture, and are immediately available to troubleshoot any organizational design challenges.
- We co-create layers of change within the existing organizational structure. We involve our client’s teams in the design process starting on day one. They help us uncover insights, prototype new ways of working, and then take the lead on testing and redesigning those changes.
- We make change simple. Our researchers scour the globe for new models of working sourced from the highest-performing teams at an organization, but we distill those practices into minimum viable prototypes that make it easy to try and then tailor to the evolving layers of structure their organization needs.
- We create lasting cultural moments. To make the need for change feel both inspiring and inevitable, we take teams offsite twice in our process to create distinct cultural events. At our Align event, we ensure company leaders are aligned around the priorities for change. At our Adopt event, we ensure those same company leaders are fully bought in to the changes their teams have designed and tested. These offsites are designed to be emotional and memorable for our attendees.
- We make change spread throughout the organizational structure. As our prototypes in change begin to gain traction in one area of the organization, we introduce them to teams in other areas of the organization. Because we’ve involved their colleagues in the design and implementation of these changes, new teams are more apt to accept these prototypes. One small change quickly becomes a model phenomenon inside the organization, and the teams’ ability to respond to change becomes a lasting competitive advantage.
Real Stories of Organizational Redesign
What do we mean by prototypes in new ways of working? When we work with clients on their business strategy, we tackle their challenges by developing lightweight tools and new ways of working they can try out and redesign to suit the structure of their business.
When a client found their business units no longer working well together, causing project delays and in-fighting, we developed a cross-functional team structure, a process for forming those teams, and a set of model habits and rituals for the team to follow.Those instructions for the team fit on just two printed pages and allowed the program to get off the ground quickly and prove immediate results. Over time, the team has refined our initial approach to suit the evolving layers of structure their organization needs.
When a client in a rapidly scaling startup realized that group decision-making was slowing them down, causing them to miss opportunities, we developed a simple decision tree (and eventually a Slackbot) for their teams to use to find the right decision-making model for each situation they encountered. This tool has evolved into a speedy governance process with faster decision making.
For one company with non-stop, high-stakes projects, we helped them avoid constant fire drills by helping them develop a simple checklist that works for the redesign structure the organization needs. The checklist helps to gauge 1) if the issue was truly serious, 2) who the right people to contact were, 3) who not to bother, and 4) how to ensure open lines of communication during the fire drill. The department went from having a weekly widespread crisis to nearly none at all.
When established clients found themselves being outpaced by upstarts, we developed a lightweight innovation pipeline structure and hired expert trainers in design thinking and physical prototyping. After training, our clients uncovered millions of dollars in new opportunities just by visiting a local store with paper prototypes. This team went on to launch a new business strategy and innovative services and grab tech headlines for their brand.
PART FIVE: PREPARING INDIVIDUALS FOR CHANGE
By now, it should be obvious that change is the natural outcome of the organizational design process. But individuals are often resistant to change, especially at work. After all, change threatens the loss of their time, pride, control, familiarity, competence, and narrative. To help the people we work with overcome their resistance to change and avoid change fatigue:
We help leaders craft an inspiring vision for change. People won’t embrace change if they don’t like where it will get them. We work with leaders to fully articulate a compelling vision which includes: why, why now, what it will look like when its successful, what questions remain unanswered, and what parts others are called to play in the process.
We prepare teams for the emotional journey to come. Our organizational psychologists walk our clients through the possible emotions they may feel in response to the change process. We build their self-awareness for change resistance by helping them understand what’s to come, and by giving them language to express those feelings.
We help leaders unlock fast wins. When change moves quickly from talk to action, skeptics turn into champions. We look for easy ways to build momentum so that their staff gains energy as they move the work forward.
We help teams reduce unnecessary work and unproductive meetings. Change takes time—time which has to be taken away from another activity or priority. One of the first things we do with leaders is review their processes and meeting habits with the goal of finding 10-20% more time back. We then spread those changes down to more teams.
We share control over the design process. Our approach to organization design is highly collaborative and at times, client-led, so that the people we work with feel a greater sense of ownership in the process. If they want to slow down or take a short break, they have the power to do so.
PART SIX: THE STAGES OF ORGANIZATIONAL DESIGN NEEDS
As organizations scale, they’ll need different strategies to meet new business objectives. Strategic priorities can be driven by funding, customer acquisition, the rate of new hires, employee engagement, the age of the company, leadership team performance, an acquisition/IPO, or even by the founder’s well-being (or lack thereof).
At NOBL, we obsessively study what organizations should be paying attention to at each stage of their growth. While there is a great deal of fuzziness between these stages, and no two companies follow the same growth trajectory, our model is meant to serve as both a checklist and conscious reminder that every stage of growth triggers new priorities and requires a renewed focus.
Our Tool: Organizational Design Stages, a model for growth and organizational design (PDF)
Based on our experience and research, as organizations grow, their strategic focus may evolve in this order:
- Conflict and diversity. While searching for the right idea and execution, proto-organizations should embrace healthy conflict and diverse perspectives.
- Unity of command. To present the case for a business as a coherent idea, fledgling organizations need coherent and effective leadership structures.
- Formal planning. As product-market fit locks in and rapid growth begins, organizations can finally begin developing medium-term plans.
- Formal structures. For sustainable growth, organizations need structures that deliver upon their strategy and work well together.
- Leadership refresh. Passions may need to be renewed and conditions may require new strengths and perspectives.
- Re-risking. Defending a captured market position and developing new opportunities requires all forms of innovation.
PART SEVEN: CONCLUSION
Successful products put the user at the center of their form and functionality in order to become beloved and irreplaceable.
Successful businesses thoughtfully design customers’ experiences in order to exceed expectations and ensure customers will buy the service again.
Successful employers thoughtfully design employees’ experiences in order to exceed expectations and ensure employees will focus on serving their customers.
Organizational design isn’t a “nice to have,” it’s mandatory in a world of exponential scale. In this world, organizations continually drift toward the edge of chaos as they interact with their environment. Leaders aren’t responsible for that chaos, but they are responsible for steering in response; both through their own actions and by empowering those closest to the customer.
Organizational design can help you see your environment with fresh eyes. It can rally your people behind a purpose that genuinely inspires them. It can unlock new strategies and new systems, and improve performance across the board. It can make organizational structures more clear and less political. It can simplify systems, reduce costs, and knit together the organization under one unified culture.
If the world of work were more thoughtfully designed, perhaps the majority of workers wouldn’t be disengaged. If more leaders understood org design, maybe 50% of employees wouldn’t quit because of their manager. Just maybe we could give back the 30% of time that employees say isn’t used productively. Maybe we could erase the lack of diversity in our firms and instill a greater sense of belonging among our teams. Maybe we could save more world-changing companies and technologies from being scaled to death.
We hope this article serves as a useful starting point as you think about your organization’s design. The next step is to listen to those around you. Then, together, make thoughtful changes and learn from where they take you.
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