Levers Of Organisational Design
From GTwM
The design of an organization--the accountability system that defines roles, rights, and responsibilities throughout the firm--has a direct impact on the performance of every employee. Yet, few leaders devote focused attention to how this design is chosen, implemented, and adjusted over time. Robert Simons, the Charles M. Williams Professor of Business Administration in the accounting & control area at Harvard Business School, argues that by viewing design as a powerful and proactive management lever--rather than an inevitable outcome of corporate evolution--leaders can maximize productivity across every level of the organization.
Levers of Organization Design presents a new design theory based on four key yet often underrated categories:
- customer definition,
- critical performance variables,
- creative tension, and
- commitment to mission.
Building from these core areas, Simons lays out a step-by-step process leaders can follow to create structures and accountability systems that positively influence how people do their work, where they focus their attention, and how their activities can be aligned to contribute to overall strategic goals.
He also introduces four levers of organizational design--
- unit configuration,
- diagnostic control systems,
- interactive networks, and
- responsibility to others
that leaders can manipulate to improve overall organizational efficiency and effectiveness vastly. For anyone accountable for measuring and managing performance, this book shows how good design can become an organization's roadmap to success.
Underpinning his arguement is his presentation of Strategy as multi faceted
- Strategy as positioning (low cost / customer intimacy / innovation - ie Dell / IBM / HP)
- Strategy as plan
- Strategy as emerging patterns of behaviour (Honda / USA / Motorbikes)
- Strategy as perspective (HPInvent)
| Strategy As Postioning | Strategy As Plan | Strategy As Emergent Behaviour | Strategy As Perspective |
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Clearly define and delight your "Primary Customer" (all other constituents in the supply chain need to be managed / sufficed).You also need to select and regularly review your configuration. (Low Cost / Customer Intimacy / Innovation being the main three configurations). | Identify the key concerns of this primary customer and measures that can capture how the organisation is performing against these concerns (related KPI's) | For longer term success you also need to be responsive / creative. Traditionally strategy was seen as being top down command and control. However realised strategies often bear no relation to planned strategies. Events intervene. Orgs therefore need, to differing degrees, the ability to listen to feedback from the bottom up, and to encourage cross functional interaction. | |
| "Architects need to understand the intended function of a building before they can design a building. Internally they then lay them out / divide them up (into rooms etc) to help the occupant function" | "Having built the building you need to wire it up to provide the power that will drive / facilitate work" | "An architect then needs to look at how people move about in the building. How far should the building support interaction, how should it limit it. Is the building a retail outlet our is the client needing a prison?" | "Having a) designed & constructed the building, b) provided power, c) ensured people can move around in it in a way that is appropriate we finally need to d) employ the right people" |
| Organisational Design caters to the above. Structures can be heavily centralised for Low Cost Config, or very localised. They can be structured by Function, Region, Product Groups, Client Groups etc. | Build a Diagnostic Control Sys. to monitor KPI's, to focus day to day attention on the right things. One that reports back on an exception basis. | On the whole orgs. are designed to created order. However all orgs need a degree of adapatability.To increase adaptability you need a Interactive Control Systems etc to encourage feedback and interaction across functions & improve understanding. Ensure org. has antennae! | |
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| To increase creativity
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