Encyclopedia of Leadership

4.1

DESIGNING PRODUCTIVE ORGANIZATIONS

Inspired by Bernie Novokowsky, Peter Drucker, Jay Galbraith, David Hanna,

Susan Mohrman, and Thomas Cummings.

“Structure is a very powerful shaper of behavior. It’s like the strange pumpkin I once saw at a country fair. It had

been grown in a four-cornered Mason jar. The jar had since been broken and removed. The remaining pumpkin

was shaped exactly like a small Mason jar. Beside it was a pumpkin from the same batch of seeds that was

allowed to grow without constraints. It was five times bigger. Organization structures and systems have the

same effect on the people in them. They either limit or liberate their performance potential.”

—Jim Clemmer, PATHWAYS TO PERFORMANCE

When it comes to designing an organizational structure there is no such thing as “one size fits

all.” On this matter, Peter Drucker, arguably the most distinguished organizational guru of our

time, is unequivocal: “There is no such thing as the one right organization [design]. There are

only organizations, each of which has distinct strengths, distinct limitations, and specific

applications.” This tool will provide you with the overall design of an organization, division,

or workgroup, including a systemic model for organizational design.

Organizational design needs to:

1. Support organizational aims.An organization’s high-level thinking as expressed in its
   vision, mission, and values must lead to solid business results. For example, if customer
   service is a highly valued organizational aim, then the organization must be widely
   organized to deliver outstanding customer service. [☛2.5 Values, 2.6 Clarifying Purpose]


2. Be systemic.Many organizational designs fall short because the elements of the design
   don’t fit with and support each other. Nor do they support the larger system. A good
   organization design facilitates: a) access to information, b) decision making by those
   with the best information, and c) the ability to take appropriate action in the face of
   change. [☛2.1 Systems Thinking]


3. Focus from the outside-in.


4. Be easy to understand and communicate.The organization should be readily understand-
   able: inside (to employees) and outside (to customers and other stakeholders). People
   need to be able to work the system quickly and easily. [☛5.1 Change Equation,
   8.3 Organizational Communication]


5. Be flexible.Only stone-age organizations can be cast in stone. Organizations need to be
   able to turn on a dime so they can reorganize to deal with environmental changes or
   to capture opportunities. [☛1.10 GAS Model]

SECTION 4 TOOLS FORDESIGNINGPRODUCTIVEPROCESSES ANDORGANIZATIONS 101

➠Clarify customer/client needs.

➠Map stakeholder groups.

➠Understand relevant environmental forces.

[☛3.3 Environmental Scan]

✔Who does this organization serve?

✔Who are the groups who have a stake in success?

✔What are the driving or competitive forces in the

society around the organization?

Organization design starts

with an assessment Key questions