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Organizational Design & Organizational Design & DevelopmentDevelopment

Foundational ModelsFoundational Models&&

CultureCulture

February 8, 2011February 8, 2011

MGMT-4000MGMT-4000Linda Miklas, Christina FinegoldLinda Miklas, Christina Finegold

Harvard UniversityHarvard University

Center for Workplace Center for Workplace DevelopmentDevelopment

Creating the EnvironmentCreating the Environment

Trust earned one person at a time

Accountability for the right results

Opportunity for Growth & Impact

Center for Workplace Center for Workplace DevelopmentDevelopment

Three Types of TrustThree Types of Trust

Competence – “Trust of Capability”Competence – “Trust of Capability”

Contractual – “Trust of Character”Contractual – “Trust of Character”

Communication – “Trust of Disclosure”Communication – “Trust of Disclosure”

Iceberg ModelIceberg Model

What

How

Iceberg ModelIceberg Model

Skills

Knowledge

HayGroup= Achievement

PowerAffiliation

Butler = Passion

Connection Achievement

Power A Powerful New Model =

AcquireBond

ComprehendDefend

Inner Work Life = Creativity

ProductivityCommitmentCollegiality

Clarity - Communication - RigorClarity - Communication - Rigor

ModelingDecision-Making

Developing Talent

Achieving Results

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Understanding DesignUnderstanding Design

Are business units:Are business units: Structured around a clear and demonstrable Structured around a clear and demonstrable

value proposition?value proposition? Responsible, with authority, for developing and Responsible, with authority, for developing and

executing key components of strategy?executing key components of strategy? Authorized to make decisions affecting strategy?Authorized to make decisions affecting strategy? In control of resources required to execute In control of resources required to execute

strategy?strategy? Accountable for revenue, funding, profitability?Accountable for revenue, funding, profitability?

Source: 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”

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Structural ImperativesStructural Imperatives

Source: Reframing Organizations: Artistry, Choice, and Leadership. Bolman, Lee G. and Deal, Terrence E., 2008, Jossey-Bass.

DimensionDimension Structural ImplicationsStructural Implications

Size and ageSize and age Complexity and formality increase with size and age.Complexity and formality increase with size and age.

Core processCore process Core processes or technologies must align with structure.Core processes or technologies must align with structure.

EnvironmentEnvironment Stable environment reward simpler structure.Stable environment reward simpler structure.

Strategy and goalsStrategy and goals Variation in clarity and consistency of goals requires appropriate Variation in clarity and consistency of goals requires appropriate structural adaptations.structural adaptations.

Information Information technologytechnology

Information technology permits flatter, more flexible, and more Information technology permits flatter, more flexible, and more decentralized structures.decentralized structures.

Nature of the Nature of the workforceworkforce

More educated and professional workers need and want greater More educated and professional workers need and want greater autonomy and discretion.autonomy and discretion.

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Organization Design CharacteristicsOrganization Design Characteristics(Boston Consulting Group)(Boston Consulting Group)

InteractionsInteractions Hybrid Hybrid Structures Structures

and and OverlaysOverlays

Performance Performance RewardsRewards

Open-Open-Source Source

ApproachesApproaches

Lean Lean Corporate Corporate

CenterCenter

Change Change ReadinessReadiness

Design should Design should facilitate facilitate people people working working togethertogether

Interactions Interactions should occur should occur across org across org boundaries.boundaries.

Design should Design should reflect reflect different different business business drivers across drivers across org:org: differences differences in span of in span of controlcontrol processes processes that can that can improve improve management management practicespractices

Design should Design should include include performance performance measurement measurement mechanisms mechanisms and programs and programs to reward to reward performance; performance; variable variable incentives.incentives.

Design can Design can integrate with integrate with customers and customers and suppliers. suppliers.

Design should Design should include a include a center that center that disseminates disseminates best practices, best practices, drives change drives change initiatives.initiatives.

Design should Design should institutionalize institutionalize capacity to flex capacity to flex and respond to and respond to environmental environmental changes.changes.

Source: 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”

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Galbraith’s Star ModelGalbraith’s Star Model

Processes

People

Rewards

Structure

Strategy

Source: 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”

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Five Basic Structure OptionsFive Basic Structure Options

Functional

GM

R & D Operations Marketing

Product

CEO

Electronics Medical Instruments Computers

Market

GM

Health Service Fin. Services Distribution

Geographical

GM

Northern Region Central Region Southern Region

Source: 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”

Process

GM

New Product Dev. Order FulfillmentCustomerAcquisition

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Strategies for Five Structure OptionsStrategies for Five Structure Options

Source: 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”

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ReferencesReferences

2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”; CLC6422289.Organizational Design”; CLC6422289.

A Survivor’s Guide to Organization Redesign, Boston Consulting Group, 2003. A Survivor’s Guide to Organization Redesign, Boston Consulting Group, 2003. www.hcg.com/impact_expertise/publications/files/Survivors_Guide_Organization_Redesign_Jan2003.pdf

The Balanced Scorecard. Kaplan, Robert S. and Norton, David P., 1996.The Balanced Scorecard. Kaplan, Robert S. and Norton, David P., 1996. Designing Your Organization: Using the STAR Model to Solve Five Critical Design Designing Your Organization: Using the STAR Model to Solve Five Critical Design

Challenges. Challenges. Kates, Amy and Galbraith, Jay.Kates, Amy and Galbraith, Jay. Do You Have a Well-Designed Organization? (Goold and Campbell’s Fit and Good Do You Have a Well-Designed Organization? (Goold and Campbell’s Fit and Good

Design Tests), Harvard Business Review, 2002.Design Tests), Harvard Business Review, 2002. Organizing for Agility: Creating Natural Business Units, Booz Allen Hamilton, 1999. Organizing for Agility: Creating Natural Business Units, Booz Allen Hamilton, 1999.

www.boozallen.com/publications/article/658369..

Reframing Organizations: Artistry, Choice, and Leadership. Bolman, Lee G. and Deal, Reframing Organizations: Artistry, Choice, and Leadership. Bolman, Lee G. and Deal, Terrence E., 2008, Jossey-Bass.Terrence E., 2008, Jossey-Bass.

Trust and Betrayal in the Workplace: Building Trust and Betrayal in the Workplace: Building Effective Relationships in Your Effective Relationships in Your Organization. Reina, Dennis S. and Michelle G., 2006, Berrett-Koehler Publishers.Organization. Reina, Dennis S. and Michelle G., 2006, Berrett-Koehler Publishers.