By Wesley Dorsett
The first step in most major Organizational Design (OD) models (McKinsey’s 7S model, Jay Galbraith’s “Star” model, etc.) is strategy. So, it’s safe to say that “OD” and strategy are two sides of the same coin. You can’t talk about OD without simultaneously thinking about and talking about strategy. And while there will always be downstream dimensions of OD that must be addressed, the beginning point of any organizational design project is always strategy and the far-too-common “strategy words” like value proposition, competitive advantage, capabilities, etc. But the one thing every OD challenge has in common is the fact that leaders must make CHOICES.
Choice—the act of picking or deciding between two or more possibilities—is what strategy, and OD are all about.
In their book Playing to Win, A. G. Lafley & Roger Martin lay out a proven methodology and process for developing a successful business strategy. The foundation for doing “all things strategy” is based upon their 5 Choice Cascade framework. The process is simply to take leaders through a 5-step sequence of making (sometimes very hard) choices.
However, lots of modern-day research has uncovered the truth about us humans, that is, we do not make rational decisions. Human behavior scientists like Dan Ariely and others have researched and demonstrated how predictably irrational we are in our choices. Forces such as emotions and social norms carry much more weight in our decision making than cold, objective, unbiased logic and reason.
So what do neuroscience, and the study of human behavior and psychology have to do with the “hard stuff” of strategy required to design an organization? EVERYTHING! If we don’t accept the fact that our default wiring for making decisions (and especially strategic decisions) is embedded in this world of unconscious drivers, we are bound to make less-than-optimal strategies and organizational design choices.
At Linkage, the Strategic Thinking model we teach all of our clients is comprised of three, mutually reinforcing parts: 1) Exploring Perspectives, 2) Discerning Significance and 3) Envisioning Possibilities. Choice is an integral part of all three parts. We choose where we look for information, and from whom. We choose and make judgments about which data is significant, important, and business-relevant. We choose what scenarios are possible and then which ones we will commit to pursuing.
Much of the dysfunction that we consultants see when we are asked to come in and develop, instruct, coach, and advise leaders about their organizations can be traced back to an ambiguous and unclear strategy, which leads to organization by default, not organization by design. That is, the design of the organization is not deliberate and intentional, it is just happenstance, it just is, and then leaders wonder why they aren’t achieving the results they need. The ambiguity is often the result of leaders’ very real struggle with making clear choices and decisions about the strategy—what game to play, where and how to play it, and what we need to win. Our organization does “this” and “not that.” However, it’s the “not that” part that we often don’t want to commit to and which often derails organizational design efforts.
So here’s the bottom line: You can’t be all things to all customers. Choice. Decision. Commitment. Priorities. Trade-offs. These are words that we are all very familiar with but rarely do we find palatable. “Having it all” is just so appetizing. But OD work requires a commitment to choose. You must focus on those few key factors that make a difference to your strategy and exploit them. And every design choice you make—structure, process, rewards, metrics, etc.—must focus on achieving your well-defined strategy.
Are you struggling with your current organization structure? We can help. And if you’re in the Chicago area, come to our two-day workshop in early February. Limited space is still available. Click here to learn more.