So why do we focus on organization design? There is an old saying, “You can’t get flowers to grow by pulling on them.” The components of organization design combined with leadership are what people see and hear. What they see and hear influences what they think and how they feel. What they think and feel influences what they say and do or their behavior. Their behavior influences organization performance.
We focus on organization design because it influences the behavior of those who work in and with the organization. Stakeholders experience the organization’s many processes and practices, interactions, and artifacts. While interacting with the organization, stakeholders hear and see many manifestations of the organization design. William McDonough proposes that “Design is the first signal of human intention.”
While organization systems come in a wide variety of shapes and sizes, most are composed of seven basic components.
- Customers (external and internal) and their requirements for the outputs.
- Outputs (a.k.a. deliverables) are clearly defined, including physical products, services, and information. Specifications for the deliverables are clear and explicit and drive the design of the process. This varies with the nature of the system. See more on this later in this chapter.
- Processes (activities and interconnections) are explicitly and clearly defined and understood. Internal customer and supplier relationships and requirements are clear and explicit.
- Inputs (internal and external) are identified and requirements clearly and explicitly defined.
- Suppliers (internal and external) are identified for each input. Performance and relationship requirements are explicit and clear.
- Measurements for each of the first five components are identified and operationally defined. Results levels, trends, and comparisons are measured at several places along the value chain or processes.
- Guidance and resources are identified and allocated (people, capital, technology, etc.) to make the system work. Relevant guidance related to strategy and organization culture is identified. Goals and performance targets are set and periodically compared to actual performance.
The design process addresses all seven components to create integrated systems that are aligned and continuously improving.
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