Organization Design: Bridging Strategy and Execution
The imminent need for a new organization structure is usually manifested in statements you may hear across the enterprise, reflecting a morass of current disconnects, for instance: “We seem to have got our strategy worked out, but why are the results not coming?”, “One function doesn’t talk to the other”, “The left hand doesn’t know what the right hand does”, ” No one seems to be really clear of what his role is”, “We seem to be top heavy”, “ Not sure who is responsible for what”, “I seem to have many bosses” , or “We are really slow in making decisions.” Studies in anthropology have shown us that for effective functioning, an enterprise may manage itself around 250 as an optimal number. Organizations that go beyond this would need a structure that can hold it together and deliver desired outcomes envisaged.
It is the quest of organizations to create an entity that best enables the overarching purpose to be accomplished. As strategy lays out a plan, it is the structure that organizes, connecting people with each other in meaningful and accountable ways. Design principles that define outcomes, clarity of roles and accountabilities desired are an essential ingredient. Nature too has evolved self-organizing systems clearly reflecting the need for pattern formation and execution focused structures observed in nest building by social insects and birds flocking. Descartes in his ‘Discourse on Method’ introduced the idea that the ordinary laws of nature are adept and tend to organize themselves. In his book ‘The Opium of the Intellectuals’ 1955, Raymond Aron highlights how even ideas and interests tend to be ‘organizing themselves’.
Industrial revolution, inventions, transportation and technology profoundly changed the nature of business and commerce. Size and complexity became an increasing challenge in managing organizations. Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today’s post-industrial structures. Amongst the earliest attempt at organization structuring were the novel attempts to divisionalise by EI Dupont, way back in 1900. Peter Drucker made vital observations on structural experiments at General Motors decades ago and thinkers such as Galbraith, Nadler and Chandler explored boundaries beyond.
Organization design is both an art and science. Harmony in alignment is essential while not losing out on the individual characteristic to serve a larger purpose well. Georges Seurat, a neo-impressionist artist, pioneered the innovative form of pointillism, a technique of applying one dot of colour next to the other. A myriad of tiny separate dabs of different unmixed colours, juxtaposed as per rigid scientific principles, formed a cohesive whole by allowing the dots to merge in the eyes of the beholder, losing neither luminosity nor vibrancy. Seurat’s seminal work ‘La Grand Jatte, 1885’ is an interesting testimony to creating a perfect balance and, perhaps, a metaphor to learn design principles from.
The purpose, vision and strategy of any organization need to be matched by an alignment of people, processes, and technology. Many forms have been explored and experimented with; smaller, flatter, temporary, horizontal, circular, networked, open structures; each serving a specific purpose. Entrepreneurial, functional, divisional, geographic and other variations have been used to address evolving needs. An effective organization design needs to encapsulate both the interdependencies across the various functions as well as attend to the hierarchical vertical alignment. More importantly, the structure must build in the foresight of anticipating what may be needed as contexts change in the future. Even if not visible today, we have to be aware of the need to accommodate new developments to remain relevant.
The exciting work of Dmitri Ivanovich Mendeleev in 1869, a masterpiece of structural juxtaposition from the world of chemistry, stands out for sheer elegance and intuitive genius. Mendeleev’s Periodic Table arrays the elements on the horizontal rows the similar families with common properties and the vertical columns by the progression of atomic weights. From Hydrogen to Uranium, the properties were repeating periodically after a grouping of seven elements giving it its name. Mendeleev recognized that the resultant gaps have a rationale and needed to be left alone; quite remarkable since only 63 of the 92 natural elements were known at that time. Elements discovered later neatly fit into the dedicated gaps, vindicating his brilliant insight.
An important arsenal and a formidable ally, not always deployed, is the opportunity to redesign the organization. To hope that an accidental symmetry would fall in place is wishful thinking. Even as organizations evolve and change over time, the attempt to discover new strategies to meet business challenges is not often followed by a requisite organization redesign. An organization structure, indeed, is the vital bridge between strategy and execution. Organization design has been best approached as a vital internal change and often attempted under the guidance of an external facilitator. Organization design is the process; organization structure is an outcome. Outcome of any strategy hinges on our ability to create a structure that melds purpose, processes, and people. Ironically, the structure you currently have is perfect for the results you currently get!
( The article above was penned on invitation from The Economic Times and appeared under the title “Organizations need to put strategy, execution in sync to deliver desired outcomes” on 28 August 2012 )
(A Sunday Afternoon on the Island of La Grande Jatte: The picture above is the famous painting by Georges Seurat ( 1859-1891) now exhibited at the Art Institute of Chicago, in the same white frame envisioned by him to highlight the luminosity of this amazing work of art. This large masterpiece , measuring 10X6 feet , is the result of painstaking work by Seurat, comprising two years of effort between 1884 -86 with over 200 preparatory sketches. It is widely regarded today as a seminal contribution to the field of art, for the style pioneered by Seurat as divisionalism, now popularly known as pointillism, where dots of paint are designed to merge magically in the eye of the beholder.)