By Sarah Beart & Dev Mookherjee

When a senior leader realises that their organisation is not performing well, or well enough, they often commission a redesign, and task a small design group to start thinking about how they could be better organised. The temptation for the design team is to start tinkering with org charts, add in new roles to bridge perceived gaps, and identify savings and synergies.

However, we believe that what SHOULD take centre stage at this point is getting the design team sufficiently clear and aligned on the strategy. After all, you want them to be designing based on choices you have made about the purpose of the organisation and your beliefs about how it will succeed in possible future contexts, in short, you want the FORM of the organisation to follow its FUNCTION. So we are always curious about how people understand the strategy, and how well-designed the organisation is to make it happen.

Often leaders are impatient to see an org chart, and resist opening up any conversation about strategy at this stage. Many have a fear opening the Pandora’s box of strategy. Or they are impatient “we’ve talked ENDLESSLY about the strategy and everyone is PERFECTLY CLEAR! GRRRR” (often accompanied with an eye roll).  But as one of Michael Frayn’s characters in Matchbox Theatre comments “There are masses of things I want to be clear about. Since I am being so absolutely clear about them, and since one totally transparent thing looks so much like another totally transparent thing, it’s difficult to tell one from the other.”

Inquiring into the Strategy: what we find

Often people do know the headlines, and the desired outcome but they haven’t thought about HOW it’s going to happen. When starting a process of re-design we often carry out interviews with a range of staff and stakeholders with questions including:

– How clear are you about the strategy (they often know at least some of WHAT the strategy is but have little idea of how they choose to make it happen)

– How well organised are you to deliver the strategy? Frequently this provokes a tumbleweed moment – because people haven’t had time to think about this – whether the current form really does enable what they’re trying to achieve.

In his 1992 letter to Berkshire Hathaway shareholders, Warren Buffett said, “It’s only when the tide goes out that you learn who’s been swimming naked.” These inquiry questions pull the tide right out on the strategy and exposes the flotsam and jetsam of strategic thinking, unresolved or unspoken disagreements about strategy (and maybe the odd wreck of previous strategies).

Any senior team who are going to be making the decisions about org design need to have a good enough shared understanding of a good-enough shared strategy if they are going to make good decisions about the design. So that’s where good participative organisation design starts.

Inquiry about terminology should not be avoided – it is the work!

Often, we find that time is expended by groups working on design on understanding what others’ mean when they use certain terms. There is a “dialogic pull” to move to a shared language around what we are trying to do and what we mean by different activities. Examples of this are what exactly is being done under the banner of “commercial” or “compliance” or “operations”. Different parts of the organization may have very different assumptions about the activities implied by different terms. We would suggest that you don’t fight the need for conversation – it’s no reflection on you if there are things that need clearing up, or that new ideas emerge. It’s a natural part of doing org design work, to be welcomed and allowed space and time.

This strategic conversation helps you build a coherent shared narrative about why you needed to redesign, why you have chosen the design you have chosen and how you expect this to help you deliver your strategy

In summary

– Org design is done to help you deliver strategy, so it requires you to look at strategy

– This is needed and not to be feared

– Good participative org re-design processes help you get your senior team to have a shared language and sense of purpose

– This helps you take the rest of the organization along because there is a clear enough shared narrative about the need for re-design and the background to the choices you have made – you will be appropriately clothed for conversations with the wider organisation

Need help with your organization design conversations? Get in touch!

We at Metalogue have developed a tool (www.orgwith.com) to help in-house organization designers to facilitate activity-based design conversations. If you would like a demo of Orgwith™ get in touch at the following email address: orgwith-admin@metalogue.co.uk

Sources

Buffett, Warren. Berkshire Hathaway: Letter to Shareholders (1992)

Frayn, Michael. (2014) “Matchbox Theatre: thirty short entertainments”, Faber & Faber: London

Goold, M & A. Campbell. “Do you have a well designed organization?” in Harvard Business Review, March 2002

Sullivan, Louis H. (1896). “The Tall Office Building Artistically Considered”. Lippincott’s Magazine (March 1896): 403–409. Quoted on Wikipedia: https://en.m.wikipedia.org/wiki/Form_follows_function

Photo: Dev Mookherjee

#orgdesign #strategy #od #facilitation #facilitationtech #hrtech #orgwith

It is by no means business as usual for anyone during this crisis period. While the impact varies from individual to individual, we are all living with less certainty, often more anxiety, and questioning some of the taken for granted in our lives.

Organisations too are re-thinking what they do, and how they do it- in many cases coming right back to fundamental questions of meaning and purpose. Our engineering clients are engaging with the challenges of building ventilators and producing PPE. Our clients in tourism have been concerned with getting people home safely- and playing their part in keeping the supply chain going for vital things such as food & medicine.

Like many consultancies we have been asked to find innovative ways of continuing essential assignments. Indeed people have been surprised at how much you can still get done in the virtual space once you get over the new rules of engagement.  Sarah Beart’s blog on virtual working  is well worth reading on these.

We have noticed that many organisations are needing to re-evaluate and adapt their structures or ways of working to adapt to the new reality. The broad principles we follow continue to apply,  however some things need to be emphasised more than ever.

With that in mind, our (slightly revisited) 10 top tips for organisation design are…

1.  Be as clear as you can be on what the strategy is AND see organisation design as an opportunity to continue to engage people in the development and the implementation of strategy. At this time of heightened uncertainty the importance of making sense together is even more crucial. We’ve had many a light bulb moment in workshops as the implications of a strategy memo suddenly become much clearer- this will be even more the case at the moment.

2. Create a small and representative design team to work on this and give them a clear remit. With the right facilitation support they will design for the strategy & for the future- and most importantly feel ownership of the new design.

3. Pay even more attention than usual to communication. We’ve seen great examples of very open communication by CEOs in the last 6 weeks- very conscious that distrust and paranoia thrive in a vacuum. The same also applies to organisation design work: even more attention than usual needs to be paid to communicating on the process and the decisions that are being taken to those who are not part of the design team.

4. Build a real warts and all picture of what is and isn’t working about the current structure. And share that picture (with the warts) as you start the re-design work so you have enough shared context from which to work.

5. Trust that a good design process (like ours) will get you to a good outcome for your organisation– even though no one knows at the outset what that outcome will be. As we said to a workshop participant recently “We haven’t failed yet”.

6. Beware of the sketch someone (the CEO/ an expert consultant) has drawn up on the back of an envelope and which is “the answer”. It might not be a bad idea- but it won’t have the right level of ownership in the organisation to allow for a successful implementation

7. Be pacey – but don’t rush it. This work is important for any organisation and has significant implications- so it’s important to take the time to get it right. That doesn’t mean it has to take years. Our experience suggests that 6-8 weeks is enough to come up with a well thought through robust organisational design.

8. Be creative. In the last few weeks face to face workshops have gone virtual- and clients have been positively surprised at the quality of work that they have been able to do.

9. Plan for implementation up-front. A significant re-design always requires implementation resource: leadership time, HR, internal communication and some project coordination. Don’t be surprised by this!

10. Plan for transition support. Individuals will end up in new roles needing to do all the “traditional” management stuff (set new KPIs, implement new governance processes, create new leadership teams etc) AND in all likelihood with individuals in their teams requiring significant emotional support. At the best of times it will typically takes 6 months to individuals to be fully up & running in a new structure. It might take longer this time, and not providing appropriate support runs the risk of not realising the benefits of your re-design.

We hope these tips and pointers are helpful. What would you add from your own experience?

The quote “CULTURE EATS STRATEGY FOR BREAKFAST!” often pops up (in big bold letters) on LinkedIn posts and has variously been attributed to Peter Drucker, Gary Hamel (and with more veracity) Bill Moore and Jerry Rose.

It’s an idea that smells good but is difficult to swallow due to the elusive nature of culture.

If we follow the wafting scent we notice that it is the decisions we make and don’t make which are gobbling up our strategic intentions. Even when we can get to make the decisions, they are often hard to swallow and difficult to digest for the wider organisation. But what can we do to protect our strategies from the patterns of interaction embedded in our culture?

We suggest that “decision-making” is the dish on the culture change menu which is most likely to hit the spot. We describe below some of the examples of decision-making in organisations we have recently worked in to illustrate how patterns of decision making inhibit or constrain strategy.

At the end of our post we present “Our Menu” – interventions we suggest can improve decision-making to support strategy execution.

Too many cooks

Example: A professional services business struggles to reach agreement on internal ways of working. Significant time is spent by the senior team reaching consensus on minor issues, leaving less time to focus on business development, quality reviews, and development of intellectual property.

What has helped: Creating leadership roles on specific topics. Asking those individuals to get agreement from all to a general approach, and document it, and then empowering those individuals to make decisions within that framework.

Reject the “under-cooked” opportunities

Example: A tech firm we have worked with struggles to make decisions on new business opportunities. Sales staff bring in opportunities with great potential but many are prematurely rejected as sunk costs and investments in particular laboratory technology only support a certain type of client or product. This leads to very difficult conversations between the engineers and commercial units resulting in sub-optimal outcomes. The sunk cost fallacy (making ongoing decisions to justify previous investments) plagues decision making in this organisation. This is hard to challenge as it conflicts with the pressure for demonstrating investment payback over time.

What has helped: We suggest that what is needed is acute attention on what the emerging flow of opportunities are telling us the market wants and then critical judgements on what decisions the business needs to make in order to respond.

Eat your vegetables!

Example: In this professional services business, the top team struggle to spend sufficient time on organisational matters such as building leadership capability and team development. Professional and technical issues are ascribed with far more value and so leaders are drawn to the meat on their plate but tend to leave vegetables uneaten. As a result, tricky organisational decisions have been put off and difficult conversations requiring resolution are perpetuated, partly because no-one is clear who has the right to make them.

What has helped: When introduced to the RAPID tool (Blenko & Rogers) the senior team were able to put on the table difficult decisions. They then worked through who does, and who should, have the decision rights in order for the business to deliver its strategy.

Salad dressing

Example: In an alternative energy business a senior team were having difficulty getting any traction or momentum behind decisions that they were taking which were cross-business unit. When they met, differences were aired, however, the overriding atmosphere was one of good humour and play which perhaps masked a fear of conflict and a group norm around the value of harmony. One team member talked about their meeting culture being like a bottle of olive oil and balsamic vinegar. At the start of the meetings the layers were separated. Through discussions they shook the bottle creating a smooth emulsion of the ingredients. However, following on from their meetings, the “salad dressing” of their collective decision making gradually separated back into its constituent parts. This was not an active unpicking of decisions, more a return of focus to individual business units which let things unravel through inertia.

What has helped: is spending time as a team surfacing and noticing their own dynamics. Working with the playful spirit of metaphor the team have a language for calling themselves out on these patterns so they can see when they need to push decisions forward.

Our Menu

– Be explicit as a team about decision-making rights. The RAPID tool (Blenko M. & Rogers) is great to use for this conversation: it identifies who holds each of the critical roles around a decision i.e. who Recommends, Approves, Performs, provides Input and critically who actually decides. Do this as a dialogue/collective experience, preferably with facilitation, and not a theoretical desk top exercise.

– Clarify decision criteria before getting into the decision itself. This can help prevent the professional culture (e.g. legal, risk, clinical, engineering etc) from “crowding out” strategic, commercial and operational matters

– Don’t fall into the trap of expensive restructuring exercises to resolve lack of accountability

– Be clear on what is up for grabs (on the plate) and what is a given (off the plate)

– Finally, pay attention to who is involved in decision making and notice your dynamics as a team

Ingredients used in this post

Arkes, H.R. & Blumer, C. (1985) The Psychology of Sunk Costs, Organizational Behaviour and Human Decision Processes, 35, 124-140

Blenko M. & Rogers (2006) “Who has the D?” in Harvard Business Review. 01 Jan 2006

Campbell, A., Whitehead, J. and Finkelstein, S. “Why good leaders make bad decisions, in Harvard Business Review. 01 Feb 2009


Chef
: Dev Mookherjee

Sous Chefs: Sophy Pern, Simon Martin, Kevin Power, Andrew Day and Sarah Beart

 

The gift is the present

We both attended a recent meeting which started with this exchange…

John:  “Can we spend some time preparing our plan for the future?”

Pam:  “I think we spend too much time thinking about the future and the past – can we pay more attention to what’s going on for us right now?”

This conversation reminded us that we are often willfully or unconsciously not fully present when preparing for the future. Inherent in assumptions of working with strategy is that strategy is “all about the future”. We are often invited to hold or facilitate “blue-sky brain-storming” or to help prepare scenarios for “The [insert organisation name] 2025 Vision”. John and Pam’s exchange got us thinking that rather than just accept the notion that we need to separate the future from the past and present, perhaps we needed to consider a more helpful way of working on strategy.

Well, there are certainly benefits of an exclusively future focused approach in developing strategy which can include…

– lots of energy and excitement from the executive team about future possibilities

– we start to feel creative, powerful and omnipotent when unencumbered from the heavy responsibilities of day to day delivery, thus forgetting that we exist in an emerging present (George Santayana) and we can participate in the future but not change it (David Lewis).

– it breaks assumptions about what’s possible by unhooking us from the assumptions restricting our thinking. Note: Dan Gilbert challenges our ability to do this by arguing that we under-estimate our change in interests, views and preferences because we often find it difficult to imagine a future for ourselves that is different.

However, the downside of the full future focus is that…

– we end up only paying attention to data signals from users, customers and the market which confirm our intended future (termed confirmation bias by Wason) and therefore miss opportunities and threats.

– we ignore the organizational myths and rituals from the past which could shape or frame the perception of future possibilities – e.g. “we tried to offer services ten years ago and it nearly killed us”.

– we pay insufficient attention to the possibilities inherent in what we are currently doing. It could be a current product, service or capability which could become the revenue stream of tomorrow. An example of this is how Amazon Web Services was transformed from being a back office enabling function supporting the Amazon retailing business to a significant and fast-growing business stream in its own right.

Hallucinations not Visions

This encouragement to separating ourselves from the murky, complex nature of our present realities often ends in strategies being described post-hoc as resulting from hallucinations, not visions. The gap between what middle managers in organisations experience in the present and the idealized nature of the vision is often too great to be credible, increasing the likelihood of cynical conversations at the water-cooler.

William Gibson’s suggestion that “the future is already here — it’s just not very evenly distributed” suggests that we need to pay far more attention to opportunities and signals in the present, from both within and outside the organization.

Changing our focus to the present

Well, there are strategy processes that do indeed enable participants to both stay present and build a compelling and connected future. An example of such a process is Future Search (Weisbord & Janoff), which helps organization participants build a compelling future by paying sufficient attention to the opportunities in the present. It encourages participants to look at common ground to build a compelling organisation future. However, even if we don’t choose one of these approaches to building our strategy, we can all question whether we really are present enough when preparing for the future.

Take this gift I give you – it is the present

(from poem by Ian MacMillan)

The gift is the present

Dev Mookherjee & Sarah Beart

Bibliography

Gibson, W. (1999) “The Science in Science Fiction” on Talk of the Nation, NPR (30 November 1999, Timecode 11:55)

Gilbert, D. (2014) “The Psychology of your Future Self”, TED talk at TED2014, https://www.ted.com/talks/dan_gilbert_you_are_always_changing?language=en

Lewin, K. (1943). Defining the “Field at a Given Time.” Psychological Review, 50, 292–310

Lewis, D. (1976) “The Paradoxes of Time Travel.” American Philosophical Quarterly, 13:145-52.

Macmillan, I. Extract from a poem read on a BBC Radio 3 programme but not otherwise published. Permission provided by author to use the quote in this blog.

Santayana, G. (1942). The Philosophy of Santayana, Modern Library, Vol 224

Wason, Peter C. (1960), “On the failure to eliminate hypotheses in a conceptual task”, Quarterly Journal of Experimental Psychology, Psychology Press, 12 (3): 129–40, doi:10.1080/17470216008416717, ISSN 1747-0226

Weisbord, M. & S. Janoff (2010). Future Search: Getting the Whole System in the Room for Vision, Commitment and Action. San Francisco: Berrett Kohler.