Designing Organizations For High Performance
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The document discusses the importance of effective organizational design, highlighting how legacy organizations often suffer from inefficiencies, redundancies, and lack of accountability that hinder performance. It outlines the key elements of good organizational design, including goal setting, resource assignment, and management practices, while providing a framework for evaluating and implementing organizational changes. Additionally, it emphasizes the role of leadership in shaping culture and structure to drive results in dynamic environments.
Designing Organizations For High Performance
- 1. — CONFIDENTIAL — Not for Distribution CONTACT: http://www.metamg.com info@metamg.com 914-613-3187 ofc Developing & Implementing Effective Organizational Design Overview & Considerations Strategy | Organization | Execution Change that Matters. Results that Count.™
- 2. 2 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt Legacy Organizations Often Carry With Them Both Visible and Hidden Costs… Failures of Performance… and erosion of ability to keep pace with increasing performance demands Redundant staffing & services, & inconsistent messages to customers • Organization has become highly fragmented & dispersed • Coordination / governance mechanisms absent Excessive layers, narrow spans of control… mean bureaucratic build-up, with slow “bottle-necked” decision making • Huge potential for stripping out costs & addressing root causes of organizational dysfunction & obesity Institutionalized layers of management, causing micro-management & lack of accountability • Work not delegated to appropriate levels. • From outside, organization looks bureaucratic or incompetent … but the real culprits are ill-defined accountabilities & incomplete performance measures • Redundant levels & approvals enable (or force) staff to “pass the buck” How Does Your Business Structure Drive (OR Limit) Performance?
- 3. 3 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt What is Organizational Design? Good organizational design is the “full-system” plan that defines: • Overall organizational goals and strategy, • The grouping and assignment of tasks, • The processes and systems by which tasks get done, • The structuring of functions, jobs and roles, • The relationships among organizational units (the cross-organizational linkages among business units and functions), • The assignment of resources, • The forms of decision-making and governance, • The focus of managerial behavior, time and attention, … and other key elements that enable an organization to marshal capabilities, and efficiently and effectively deliver needed results A good organizational design comprehensively addresses the key performance issues
- 4. 4 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt Organizational Practices Evolve During Periods of Growth As Organizations Solve “Earlier Problems”, the Next Challenges Are Created “Evolution and Revolution as Organizations Grow”, Greiner, Harvard Business Review, May-June 1998
- 5. 5 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt Organizational Practices Evolve During Periods of Growth As Leaders Solve “Earlier Problems”, They Create New/ Next Challenges Category Phase 1: Creativity Phase 2: Direction Phase 3: Delegation Phase 4: Coordination Phase 5: Collaboration Management Focus Make & sell Efficiency of operations Expansion of market Consolidation of organization Problem solving & innovation Organization Structure Informal Centralized & functional Decentralized & geographical Line-staff & product groups Matrix of tear Top Management Style Individualistic & entrepreneurial Directive Delegative Watchdog Participative Control System Market results Standards & cost centers Reports & profit centers Plans & investment centers Mutual goal setting Management Reward Emphasis Ownership Salary & merit increases Individual bonus Profit sharing & stock options Team bonus Resulting Crisis Leadership Autonomy Control Red tape Psychological saturation Observations about Company Evolution What phases Have Been Evident at Your Organization? What Worked Well/ Did Not Work Well In Each One? “Evolution and Revolution as Organizations Grow”, Greiner, Harvard Business Review, May-June 1998
- 6. 6 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt The “Right” Way to Structure an Organization Depends on the Set of Linked Elements Required to Accomplish its Top-Level Goals Style Top- Level GoalsSkills Systems Structure Staff Strategy The people in the organization, in corporate demographics, not individual personalities. Org chart/ descriptions showing who reports to whom and how tasks are divided up and integrated. The coherent set of actions aimed at gaining a sustainable advantage over competition. How managers behave, through invested time, attention, and symbolic actions. Capabilities possessed by the organization as a whole as distinct from the individuals. Fundamental ideas, guiding concepts, values and aspirations, sometimes unwritten, beyond formal statements of corporate objectives. The processes and procedures through which work gets done. Waterman, Peters & Phillips, “Structure is Not Organization,” Business Horizons, June 1980 - modified Cross organizational linkages – defined & implemented - tie these elements together
- 7. 7 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt Implementing a Robust Organizational Change Builds On The Linked Design Elements for a Strong Foundation Current State Where are we? How do we know? What’s our fact base? Desired Future State Top-Level Goals (incl. Vision & Values) Strategy The Need for Change: Complications Systems & Processes Structure Implementation Reinforcement (Style, Skills) Source: What is the Current State of this Foundation? Staff
- 8. 8 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt Reinforcement: Organizational Leaders Define & Model the New Organization and its Culture In Six Ways… Members of organizations watch leaders to see... 1. Where do leaders focus systematic attention? 2. What (results/ behavior) do leaders measure & reward? 3. How do leaders frame & respond to critical incidents? 4. What are practices/ patterns around who gets hired, fired, promoted? 5. How do leaders allocate resources? 6. What do leaders consciously model, teach & coach? Schein, Edgar, Organizational Culture & Leadership, 1992. How do leaders emphasize and reinforce the overall structure and culture?
- 9. 9 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt Important Stakeholder Groups Each Have a Role to Play in the Design & Implementation of An Organizational Design Leader & Exec Team 1. Determine the Design Framework What organizational capabilities do we need to deliver on the strategy? Current State Assessment + Inventory: Vision, strategy, values; Next-period and future-state business objectives; organizational demographics; … •What is the gap between where we are and where we want to go? 2. Design the Organization… Structure What structure and org roles meet strategic design criteria? Processes/ Lateral Capabilities How will work get coordinated & integrated across business units? Reward Systems How do we measure & reward performance at individual, team and org levels? People How do we select & deploy people into new roles, manage their performance and support their development? 3. Develop Specific Details/ Plans… By function and business unit, test/ assure the pieces all work together 4. Implement the New Design… Develop and rollout a transition plan Leadership Team Steering Committee/ Work Groups Whole Organization, Each Org Unit Galbraith, Downey, Kates, Designing Dynamic Organizations, 2002. (modified)
- 10. 10 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt Toolkit – Samples Available on Request Vision/ Mission/ Strategy/ Objectives Change Management/ Strategic Communications Culture Assessment and Intervention/ Shaping Program Management and Project Execution Process Mapping/ Improvement Risk Assessment/ FMEA Lean Improvement/ Non-Value Added Reduction Failure Mode Assessment/ “Pre-Mortem” Organizational-Functional Design/ Development • Organizational Design/ Implementation • Human Resources – Job Profiling/ Planning, Compensation evaluation/ planning/ design • Service Level Agreements Discussion Draft - Do Not Circulate
- 11. 11 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt How Will Your Organization Develop & Implement Smart Design? If you want to build a ship, then don’t drum up men to gather wood, give orders, and divide the work. Rather, teach them to yearn for the far and endless sea. -- Antoine de Saint-Exupery Metamorphosis Management Group helps leaders execute strategy, build organizations, and create results. We bring our years of experience to complement yours. We are former managers, operators and consultants—who have worked as senior leaders in general management, business development, sales & marketing, organizational effectiveness, operations and consulting. We partner with clients to get top- and bottom-line results, and to build/ develop client leaders – in context, on real business problems in their organizations, with their peers/ senior team colleagues. Our core work is supporting leaders: helping to enlarge personal capabilities, engage organizations, and create desired futures. Our clients achieve objectives through a structured process of engagement: • Leaders set and communicate direction and targets • Working teams • … Define clear thinking – shared business logic, terms definition and operating-model “languages” • … Surface data – just the right amount – to support effective analysis and prioritization of the opportunities in your “risk portfolio” • … Drive decision-making processes through facilitated organizational-management and workforce engagement • Generate prioritized sets of options • Create effective organizational implementation, execution, and change – on time, on budget
- 12. 12 — CONFIDENTIAL — Not for Distribution AIProcessRevis021805v2Organizational Design_MMG… .ppt Contact Us Evan Smith evan@metamg.com http://www.metamg.com info@metamg.com 914-613-3187 ofc
Editor's Notes
- #8: Org design bigger than just org structure What are key business processes that deliver value for GBU’s and [OrgName] overall? Standardized planning not defined. Scorecarding is good.