The Skill of Org Design

Context of bahaviour and goals

Obviously context includes the organisational behaviours and goals you want to induce. But it also includes non-obvious things like the business model you run (if you are a company), or the systems your organisation has to interface with (if you are a university club). To some degree, the context you’re in will limit the set of organisational forms you may design.

3 types of services work:

• Brain projects — projects that are novel, at the forefront of professional or technical knowledge.
• Grey Hair projects — projects that may require a bit of customisation, but have been done repeatedly by the consulting company.
• Procedure projects — these are the lowest value form of consulting work, and are usually executed not because the client company can’t hire to do it in-house, but that it doesn’t want to

Org design: form (promotion plan) vs context (consulting business model)

So trying to pretend that the business model doesn’t affect your org design — that you can somehow get a 12-level promotion plan (the ‘form’) to work with the reality of the consulting business model (the ‘context’) — is wilful ignorance of the nature of the business.

4 sub-skills to do effective iteration:

• You have to be good with people.
• You have the ability to think in systems.
• You have a decent understanding of the three modes of organisational control and how they interact with each other. a) economic incentives, b) ‘contractual’ obligations, and c) culture. These three tools make up your org design toolbox.
• You should have the ability to introduce changes in the org, and you should know how to get them to take.

Predictions on resistence and incentives

In practice, this looks like an ability to predict which people might resist the org change, and how, and therefore allows you to do targeted interventions to prevent such resistance from occurring. Systems Thinking Systems thinking means a particular thing here: you are able to predict how people are going to respond to incentives.

Notice and act on emergent behaviours

Good org designers are able to model how changes to these structures and policies might play out. This doesn’t mean that they have perfect prediction — we’re dealing with a complex adaptive system, after all — but it does mean that when a new org behaviour emerges, perhaps as a result of some policy change made months in the past, they are able to notice the behaviour and know how to act on it (either by reinforcing it or changing it).

The CUA factor

first, the nature of a person’s motivation; and second, the nature of the environment in which he works. An imaginary composite index can be applied to measure an environment’s complexity, uncertainty, and ambiguity, which we’ll call the CUA factor.

Force it?

Figure out how much I had left in the ‘credibility/trust’ bank, and if I wanted to burn that capital.

Find a reversible version of the org change

If possible, find a smaller, more reversible version of the org change to introduce first. Use disasters to my full advantage (people are usually more receptive to trying new ways of doing things in the wake of something painful). Strategically allow certain things to blow up so that I could exploit the pain to introduce org change, as per 4) above. Or build consensus; consensus was always the best, if most time consuming, option. I would also take extra time doing 1-on-1s right after we introduced a change.

How to turn experiments into org changes

An organization might always try highly localized, low-risk experiments, yet never figure out how to “scale” those experiments. Or, an org might turn every experiment into a big-bang, long duration program.

Challenges in larger orgs

• the larger the organisation, the more difficult the org design.
• harder to observe changes in organisational behaviour in response to policy changes.
• things take slower to spread
• more moving parts

Mistakes are inevitable

If you manage a team of 10 people, it’s quite possible to do so with very few mistakes or bad behaviors. If you manage an organization of 1,000 people it is quite impossible. At a certain size, your company will do things that are so bad that you never imagined that you’d be associated with that kind of incompetence.

How to get good in org design?

if you want to get good at org design, your time is better spent building more accurate models of the people in your org, in learning how they respond to incentives, and in building enough power and credibility to get your org changes to take.

Case studies of org designs, and then tweak them to fit your context

that stories of organisational processes are more important than descriptive how-tos of the process. A novice would read Working Backwards or Netflix’s No Rules Rules as “Ahh, here are a handful of mechanisms these successful organisations used to become successful! If I adopt them in my org, I, too, will be successful.” But this is naive. An experienced org designer would read them for the stories of how those companies got to those mechanisms in the first place. The story of the iterative process is more revealing than a simple description of the mechanisms, because it tells us the context.