Imagine your business 12 months from now. In spite of several years of steady growth, your market environment has suddenly changed. Growth has come to a halt and gone negative. Or growth may have become explosive, and you’re struggling to scale with the demand. Your customer markets are in turmoil and your organization is no longer optimized to address the needs of the business.
Wait a minute. No need to imagine it - we’re living it right now! We are in the throes of a pandemic. All bets are off and many of our operating environments have been severely disrupted. We all have stories to tell as the book is still being written.
Stories about how the market has been impacted are plentiful – you likely have several of your own including your own business. One food industry company I’m aware of has recently seen its grocery division demand skyrocket – while at the same time its restaurant division has been nosediving. In another industry, I’m aware of two companies – one an older, more established market leader and the other a younger, innovative upstart. The older of the two has recently had to significantly delay projects and cut thick layers of middle management. The younger upstart has been growing quickly through acquisitions and has not laid off anyone. Do any of these scenarios sound familiar in our commotion-filled market? It’s amazing what 3 months of a pandemic can do to business continuity and strategic plans. What can be done to deal with, let alone, get ahead of the chaos?
The pandemic we are living through is disruption that feels maxed out, but there are always strong forces altering business operating environments. Being grounded in the principles and tools of dynamic organization design will help you succeed and thrive in an ever-changing environment.
So, what is dynamic organization design?
Organization design is kind of an oxymoron – it rarely results from systematic, methodical planning. Instead, it tends to evolve over time. The problem surfaces when that evolved state no longer fits the needs of the business. And in a world of disruption, the likelihood is high that what you thought you had and needed is significantly misaligned with what you actually need.
Classic organization design aligns the organization with your mission, vision and strategy. Much more than just an organization structure or chart – in the fullest sense it encompasses all of the components of an organization including processes, technology and people. Dynamic organization design leverages these same principles and makes them actionable for rapidly changing operating environments. Like the Pandemic. Good organization design adapts to the pace of your industry and strategy - and adjusts.
Let’s review a few key principles of dynamic organization design.
1. Every organization is perfectly designed
Did you realize that even if you don’t have formal roles defined around organization design it is already happening throughout your organization? It’s happening on the proverbial back of the napkin and whiteboards across the company. A critical question to ask is, “Are significant organization design changes happening by design, or by default?” A fun way to visualize this distinction is captured in the image below. John W. Gardner stated that “every organization is perfectly designed to get the results it gets”. This is so true. . . If your organization is not achieving the results it would like to (even due to a dramatic market shift), then change the design!
2. The immense value of dynamic organization design
There is tremendous value in comprehensively designing your organization to best meet the needs of your business. The specifics of the payoffs will be unique to your business, but they likely include some of the following: 1) increased clarity of strategic direction; 2) greater strategic alignment across the company; 3) improved execution and results; and 4) stronger, healthier organization culture. Whatever the specifics of your company’s goals – better strategic alignment and execution will help you achieve greater results. And involving key leaders in the design process will increase engagement, commitment, and innovation along the way.
3. Building dynamic organization design skills
This is definitely a skillset you want to develop in your organization. It is an extension of strategic planning but with a strong operational bent. You undoubtedly today have some of the skills residing in your organization – but in some instances may not have sufficient knowledge of the principles and tools to make it a strategic part of your management practices.
Having this capability inside your company or a strong partner acting as an extension of your company is a strategic necessity – and is also very attainable. By stating that you need this capability, not all of your executives need to be organization design experts. But having a few in key roles with enough knowledge and skill to know the right questions to ask – and to know when engaging experts is a wise choice, can be sufficient. Often, organizations embed this competency within human resources, a strategy function, or perhaps lean / continuous improvement. Depending on the company’s size, there could be an entire department dedicated, or just one key leader. If your CEO or c-suite team is not aware of or buys into the power of organization design, the leaders with this skill set also need to be adept at articulating its value and influencing senior executives to make a strategic investment. Not necessarily an easy task – but again, with some foundational understanding and tools very doable.
Your role in leading the way
I know of one sizable organization where the chief human resources officer had this capability to a significant degree – and it allowed him to be a true strategic advisor and architect within the company. He was able to influence or execute changes in the organization’s processes, systems, structure and culture over many years, that needed to happen to move the mission forward and improve results. He was a real change leader for the organization and the right-hand for the CEO. Regardless of your organization’s size or complexity, by understanding the foundational principles and tools of dynamic organization design, you can also be a change agent for your business.