This blog concludes the Design Organisational Vital (OV) sub-series. The blog delved into matters related to the architecture of organizations. Something that many view in isolation from its peer OV’s (Leadership, Strategy, & People).
As discussed in the Effectiveness lab’s earlier series, It’s vital to understand, at every stage of this Effective organization series, the integrationist tendency of the bionically balanced entity. In this particular Design OV sub-series, it’s essential to grasp the interplay between the Leadership, Strategy and Design OV’s and how it aids signature value addition.
Like the human body, the bionic entity functions optimally when all the vital elements (vitals in humans) are operating optimally. The Effectiveness lab grounds its effectiveness-hypothesis on four organization-vitals (OV’s) that are required to achieve sustainable organizational bionic balance:
1. Leadership
2. Strategy
3. Design (Architecture)
4. People
All the four OV’s need various levels of orchestration, moreover from a universal pedestal, for them to support the attainment of the ideal state of bionic-balance at the organization. The orchestration is a function of sustained and effective leadership in combination with other OV’s. It’s a systems management affair
The premise behind the Effectiveness lab’s ‘bionic entity’ OD model is that sustainable signature value is attained when all the four OV’s work in sync, with varying oscillation and OD environments. For example, leadership and strategy won’t on their own facilitate firms to attain a state of bionic balance. To lead as well as create and implement strategy successfully requires an appropriate organizational structure. The whole is greater than the sum of the parts.
The various Design (Architecture) perspectives:
Apparently, organization structure is not always about purpose and process, but also, our innate fashion or values regime. Therefore when we discuss the architecture of organizations, it’s never far-fetched to relate it to generations in society. After all, generations shape the values, likes, and dislikes of a particular group of people. It’s true that organization design is a matter of the purpose the organization is created for, but also increasingly, individual fashion or trend. Structure’s raison-detre can no longer be to achieve the organization’s purpose, but also, the purpose of those individuals that the organization wants to have as its employees.
What connects the structure to strategy and vice-versa? Conventional practice is such that as soon as company leaders define a company’s purpose and subsequently strategy, the next logical is to design a structure. The structure is in effect the house that hosts strategy and its peer OV’s. The various strategy manifestations impact the design of the organization’s structure.
A good example is the International Non-Government Organisation (INGO’s). Forced to hand over its direct service delivery role to local organizations, the orthodox INGO has downscaled significantly. As INGO’s strategy changed to a more focused and evidence-driven approach, their humungous organization structures were cut to the appropriate size. It’s clear that organizational structure designers have to make it their priority early on, to design structures that meet the strategic ambitions of companies.
The process was also discussed, albeit, in the context of organizational design. Process in organizational-design speak is an invisible aspect. The tendency by OD practitioners is to discuss hard elements that influence the design of structure like strategy and the skills required to operationalize the strategy. However, in between strategy and the skills necessary to deliver the strategy, lies process.
Corporations should not jump from strategy creation to skills identification and recruitment. Instead of rushing to identify and recruit skilled labour immediately after choosing a firm’s strategy, companies should perform detailed business process mapping. From the detailed organizational process maps, organizations are able to design effective structures, required to achieve their strategic goals. Designing an organization structure only on the basis of technical skills needed to accomplish a strategy is foolhardy.
Also, People and their individual interests are a primary factor in the design of appropriate organizational architecture. It may be assumed that corporate design is a matter of ‘strategy’ and the ‘processes’ required to deliver strategic outcomes. People are considered a secondary factor. After all, the demand/supply relationship is skewed in favor of the employer and not the employee. Employees that are unhappy with their current employer are free to look at other alternatives. And employers can always hire new staff. Well, it’s not that simple after-all. You need the right people at organizations even with the best design job, to create signature-value.
Finally, culture in an organization also influences design. A specific organizational culture archetype may not work well with certain organizational designs. We can’t disregard culture when choosing an organization’s ideal design.
The coming together of the Leadership, Strategy and Design OV’s:
Bionic balance is attained when OV’s are intertwined and work at various OD velocities. Leadership requires good Strategy, good strategy requires good OD. Design, and good OD. design requires People with the right skills and competencies.
The chain is only as strong as its weakest link. One disconnect, in the grand scheme of bionic balance, results in bionic-imbalance. The domino effect of such imbalance, even when it stems from the failure of one vital, can be damaging to organizations.
We have shared in the Effective organization series, examples of bionically imbalanced firms in East Africa and the Globe – Uber, Kenya Airways (KQ), Nakumatt, and Crane bank. We concluded from our analysis of the four companies that organizations that fail to adapt to an integrationist approach in the management of their ‘insides,’ are likely to fail
All the four entities showed different levels of bionic imbalance. All the four organizations had one thing in common – that while certain OV’s were working okay, others did not. The result was sub-optimal organizations that didn’t sustainably create value.
Overall, it was observed that:
- Leadership was a primary organizational vital – and the two organizations that had this OV (Uber and Nakumatt), were struggling but surviving. Those without proper leadership (KQ and Crane Bank) were on or almost on their knees
- Organizations that didn’t do well in the strategy OV had dug deep into their coffers to sustain operations. They were on their way to bankruptcy and had committed resources without the assurance of returns. The lack of an effective strategy is like a painter doing their work in the dark
- All four organizations lacked depth in the Design and People OV’s
- And finally, turn-around was likely when one or two of the OV’s, especially leadership was assured.
Relevant to this particular blog is the observation that organizations that are attempting a turn-around job, like Uber have had a fresh look at their organization architecture. Therefore turnaround for these entities is not only about Leadership and Strategy, but also Design
We will now shift our attention to the last of the four OV’s in this Effectiveness Organisation series – People.
See you next week
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