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The Renaissance of Organization Design

Organization DesignWe all hear it every day: The world is changing faster and faster. Business models have to transform, mind-sets should change and organizations are need to be more resilient to keep up pace. Troops of consultants are well fed in this environment, yet often making the confusion of leaders and managers even bigger. Sometimes I feel and see a mixture of actionism, fluster, cynicism and fatigue among managers. Is there a way out of this ominous state?

For me, the centre of the discussion is the organization itself. Organizations need to be shaped in a way so that they become far more agile, flexible, and resilient. They need to provide more of an inspirational environment that empowers people. All too often, the organizational design discussion focuses only on structures, processes, interfaces and the like and keeps a blind eye to the social aspects of organizations. What we need is something like a new understanding and a new emphasis of the social operating model. Bringing the social operating model into the spotlight, we have to go deeper under the surface. Mere mechanical and causal thinking doesn’t help and simple top down attempts often are doomed to fail. We need more of a systems thinking approach, building on intense involvement and participation of organizations’ people even in the design process. Leaders and managers often acknowledge that being important yet feel uncomfortable and helpless regarding the actual implementation.

The biggest challenge is to let go one basic assumption: the design of the organization is an exclusive privilege of senior management and smart consultants. I observe that with the situation organizations face becoming more and more tense, the adoption or maintenance of the good old top-down approach gains in popularity. But we learned a very important lesson in the last years. Alex Osterwalder and the movement of Business Model Innovation showed us that a discipline like strategy can be understood and done in a completely different way. Osterwalder’s utilization of the design thinking approach for strategy development is coming close to all but a revolution. People, corporate staffers together with managers get involved in the process of designing business models on all levels of a company. They are engaged, have fun and yet, it works – they create great new business models and a good spirit. We – UPGRADE – have applied the same thinking to the discipline of change management with our “Transformation Design”. We make the people the designers of their own change. Professional change consultants dislike this idea – seeing amateurs doing their work. Crazy, maybe, but why not? The good news is: It really works.

But how can this provoking idea be applied for designing and structuring organizations, too? Isn’t this a far too complex task, with far-reaching structural implications such as the definition of interfaces, lines of control and reporting, the levelling of staff and eventually even the actual staffing? As these, oftentimes, involve aspects of power and politics, handing over the authority for the design of organizations to the organization seems to be too big an adventure.

Nevertheless, let’s be bold and try. Imagine a process in which the upper management drafts a framework for the organization including vision, mission, design principles, and the core elements of the high level strategic and operational model. Based on this frame a bottom up design process would be started. Teams of all parts of the organization would be equipped with the necessary tools for organization design. Working on the basis of design thinking and with the spirit of collaboration they would create the best possible design for their respective organizational section. This involvement in the designing process creates a sense of responsibility for the outcome. People create the setup that they want, and eventually will, work in. They change themselves instead of being changed.

I know the first objection will be that if though cuts like cost cutting are required, this participatory approach will not work. Agreed. But downsizing is not in scope in most of organizational change initiatives.

Anyways, what would be needed I believe, is the reinvigoration and quite a renaissance of organization design through reframing and approaching it differently. On my part, I believe, a more collaborative design process is the right approach. However, I am happy about other approaches and opinions – I would like to start the discussion.

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