When many people hear the word “design” or “designer,” they often think of fashion, interior design, or the design of everyday items such as glasses, salt shakers, and so forth. However, everything that is not created by nature is designed by humans (consciously or unconsciously). Thus, our human-created organizations can be purposefully [re]designed to produce even greater value for the multiple stakeholders. Organization designs consist of artifacts including the tangible objects and communication media from four cornerstones (stakeholders, strategy, systems, and scorecard), the culture (rituals, heroes, and symbols), and the context of the organization, including physical environment and the external operating environment. These artifacts, including the less tangible words and deeds of leaders, are what members of the organization see and hear, think and feel, and ultimately say and do.
For our purposes, organization design is a stakeholder-centered approach to aligning and integrating the systems, strategy, and scorecard with the organization’s culture and the unique context.
The four cornerstones of organization design are stakeholders, strategy, systems, and scorecard. While the four components are all interrelated, there is a logical sequence to help you think about the alignment of these components. Stakeholder needs and desires inform the development of strategies for both products and the organization design. Strategies identify external products and services as well as organization System changes to effectively produce and deliver those products and services. Finally, a comprehensive scorecard measures how well the systems and products are working, how the strategy is progressing, along with the value created for the multiple stakeholders. All four cornerstones are manifested in artifacts including documents, speeches, so on and so forth. The organizational culture fills in the “spaces” between the cornerstones and helps to bring the inert cornerstones to life.
To achieve and sustain excellence the critical culture elements — including values, rituals, heroes, and symbols — have to be aligned with the stakeholders, strategy, systems, and scorecard. However, our values can’t be observed directly. We infer values through their manifestations — behaviors, decisions, priorities, so on and so forth. Values are inferred from how people act (practices) and the rituals, heroes, and symbols of the organization that are visible and audible. The task is to select heroes and design symbols and rituals that send messages that are aligned with our desired organization and values. Some have tried to separate culture from the other components of organization design such as strategy. However, all the components work together as an integrated whole, and the design and results are context dependent.
Context is a key consideration when designing any aspect of the organization. For example, the most appropriate strategy development and deployment system might be very different for a Fortune 100 with operations in 40 countries vs. a mom-and-pop coffee shop with two locations in one city. The context contains essential information including the facilities, the technology, the type of work (e.g., nuclear power vs. education), the workforce, and the purpose and mission of the organization. The cornerstone and culture components need to align with and fit the unique characteristics of your organization. These all have to make sense together with the type of work you do, your facilities, the geography, so on and so forth.
So why focus on organization design? We focus on organization design because it influences the behavior of those who work in and with the organization. There is an old saying, “You can’t get flowers to grow by pulling on them.” The components of organization design 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. William McDonough proposes that “Design is the first signal of human intention.” But whose intent?
Enjoy the journey!