This page is a work in progress, part of a multi-year effort to capture and share learnings, frameworks, tools, and processes to run organizations. See Running Organizations for more.

Culture, defined by the beliefs we hold, heavily influences the design of the organization. The choices we make, and the structures we create and uphold are driven by the culture we seek to create.

Understanding Culture is about understanding the various types of organizational cultures, Cultivating Culture is about finding ways to improve and reinforce a given culture, and this section is about using design frameworks to create the overall design of the operation.

Organizational design is about the fit between the culture you seek to create, and the mission, vision, and goals you want to achieve. Org design is an all-encompassing design problem, using a combination of organizational structure, systems, and processes. Organizational design is a design problem.

Organizational design is an iterative process, as organizations are complex adaptive environments that evolve and change. To design well, we have to constantly read what's happening in the organization and adapt its design to fit the challenge.

There is no right and wrong in organizational design. There may be some solutions that are objectively better than others, but overall, right and wrong are about fit, and the fit is dependent on the context.

There are three main models or frameworks for organizational design. The STAR Model is the most commonly used Framework, and the one I'll cover in-depth in this section.

The 7-S model categorizes seven elements into two major categories of "hard" and "soft" elements. The hard elements are Strategy, Structures, and Systems, while the soft elements are Core Values, Style, Staff, and Skills. This article has a good breakdown of each of the elements.

Whereas the STAR Model makes Strategy the starting point for design, 7-S places Shared Values (i.e. core values) at the center of the model - suggesting that Values are at the center of the design challenge.

Start with Shared Values (core values), comparing them against your Structure, Strategy, and Systems. Then, look at the Hard Elements, followed by the Soft Elements. Work to align all elements, in that order. Answer the following questions about each element.

Questions to use, from MindTools

The Nadler-Tushman Congruence Model is a tool for the analysis of organizational design and can be used to assess design throughout a change project.

The Model looks at four key areas: Work, People, Organizational Structure, and Culture. Whatever you do, you will impact one of the four dimensions, and you'll only get the results you want if all four areas maintain congruence with one another.

This article from MindTools breaks down how to execute:

The STAR Model Is Jay Galbraith's model for organization design, which combines Strategy, Structure, Processes, Rewards, and People. It's a top-down design framework that starts with Strategy.

Galbraith says there are three shapers of organization designs: the diversity and variety of units to be coordinated, the degree of interdependence between the units, and the pace of change and predictability in the business. (Source: Designing Organizations)

Variety and Diversity are about the number of products, services, geographies, customer segments, and more, that an organization has.

Interdependence has three types. Pooled Interdependence, Sequential Interdependence, and Reciprocal Interdependence.

Dynamics of change impact how predictable the work is, which dictates how organized the work approach can be, especially in conjunction with interdependence.

How the work gets divided into job roles determines the degree of specialization required to do the work. The degree of specialization required ultimately depends on the work to be done. Smaller organizations generally have less specialization, while larger organizations have more. Create (Adhocracy) cultures tend to have less specialization and Control (Hierarchical) cultures have more.

If you have more specialization, you'll likely have more interdependence, which will require more coordination and collaboration. Deciding just how much specialization you need to operate the business is a key decision in designing the org.

The shape of an organization refers to the number of levels in an org chart, and the number of people a given manager manages (span of supervision).

A flatter org chart has fewer levels and a higher span of supervision. A vertical org chart has more levels and a lower span of supervision. Create (Adhocracy) and Collaborate (Clan) cultures have higher spans of supervision and Control (Hierarchical) and Compete (Market) have lower spans of supervision.

Flatter charts and higher spans of supervision are more common in modern and tech organizations. Flatter organizations are generally cheaper to run (fewer managers), and make decisions more quickly. In most organizations, managers are expected to supervise about seven employees. This can be increased if four pieces are in place (Source: Designing Organizations):

Tomasz Tunguz reinforces the "highly experienced people" point, noting that Google's experienced Search Quality team had spans of 15+.

Whether those four pieces are present or not, a willingness on the part of a manager to delegate and to use a coaching style instead of a command-and-control style can increase spans, too.

Collaborate cultures and Adhocratic cultures that lean heavily into teaming, peer coaching and teamwork tools can increase the span of supervision drastically, as in the case of holocracy and self-management-focused organizations.

I've found that a span of control of ~ 10 is reasonable in many situations, even accounting for junior talent. Beyond 10, it's tough to remember who's-working-on-what, what discussions were had last week, and who is accountable for what.

For more, see the next page "Organizational Structure."

Informal processes are the processes that people use to get work done. These are commonly used and usually undocumented processes like Slack chats and community formation. Uncovering Informal Processes and making them visible is a step toward improving overall Business Processes.

Unlike formal business processes, these are the many workarounds people use to get work done and feel included and cared for in an organization. These processes are common in culturally Create, Collaborate, and Compete cultures and are more likely to be stamped out of Control (Hierarchical) cultures.

Management literature suggests that understanding the "informal networks" is key to understanding informal processes. This 1993 HBR article suggests understanding the network by asking people:

One way to increase cross-functional Informal coordination is through interdepartmental events. Though these may be management-sanctioned or even management-led, they can take on a life of their own.

Know that you can't "control" informal processes, but you can strategize to improve or remove broken and ignored processes and procedures.

Business process lives at all levels of the organization. When we talk about "business process," we're mostly talking about the key processes that cut across departments and functions to deliver value to customers. Business processes can include manual or automated activities or both.

As the software space improves, a lot of interdependence across functions can be addressed with centralization and automation. Still, much of business process requires manual work and human oversight to communicate and coordinate, often through informal processes.

Management processes are about resource allocation - budgets, people utilization, and priorities (i.e. decision-making). Management processes align the organization's resources with its Mission, Vision and Goals.

How management prioritizes work is a critical day-to-day process that shapes the design of the organization.

For more on management, see Designing Management. For more on priorities and decision-making, see Deciding & Delegating.

"Rewards," in the STAR Model refers to People (HR) work that aligns the goals of the organization with the goals of the people within it. Designing rewards is about incentivizing the right kinds of behaviors and disincentivizing the wrong kinds.

The goals and measures that management uses to understand performance have an outsized impact on the design of the organization and the culture as a whole. Individualistic performance metrics generally lead to less teamwork, while an emphasis on team outcomes can lead to less individual striving.

There's an art to great performance measurement. Focused, clear goals can create unanticipated downstream effects, and at worst, dysfunction, while unclear and unfocused goals leave people unmotivated.

Job Challenge is the most critical of the four factors in the STAR Model because it's the only reward factor that uses intrinsic motivation, instead of extrinsic motivation. Designing great roles and finding the right people for them makes everything else easier.

One way to increase job challenge for star players is to use interdepartmental rotation. In addition to challenging individuals, job rotation increases collective knowledge, builds networks across the organization, and builds up general management capability in the organization.

Compensation refers to salaries, merit increases, bonuses, commissions, and equity. Theoretically, the more an organization can use non-salary means, the more it can increase motivation for people to perform. But this is not without risk. Aligning incentives can increase motivation, but poorly-aligned incentives can destroy a culture.

Consider compensating around team goals instead of individual goals. Think carefully about the best way to incentivize your top-level executives. If the C-Suite isn't incentivized to work as a team - to embrace their interdependence - then it's hard to imagine the rest of the organization working together effectively.

For more on compensation, see Cultivating Culture.

Who advances in the organization and how are those decisions made? Promotion is a key form of reward in most organizations.

There's data to back the Peter Principle. An un-principled approach to building out management - for example, promoting your highest performers into management roles by default - can lead to a culture of weak leadership and a lack of talent in key non-management roles. Designing powerful Individual Contributor roles and having the willingness to recycle talent can combat that. This is harder in Market cultures and Hierarchical cultures.

Do Manager candidates have to have a proven track record of mentorship and coaching? How do you define "proven"? How do Director-level candidates prove themselves worthy?

Don't make Management the only path to promotion for top talent, or you'll end up with a weak management team and poor use of talent.

For more on promotions, see Cultivating Culture.

Recognition for our competence or mastery in our roles is the psychological fuel of engagement. Recognition can be ritualized throughout an organization into daily, weekly, monthly, quarterly, and annual processes. Recognition can be led by your Leadership Team, or your Management, or can be a peer-based effort.

Recognition can be handed out publicly or privately. The authors of The 5 Languages of Appreciation in the Workplace noted that ~ 30-40% of people would rather not be recognized in front of a large group.

Do you give gifts with your recognition? Do you give "words of affirmation"? Both?

For more on recognition, see Cultivating Culture.

People factors are about choosing the "skill sets" and "mind-sets' that align with your overall organizational Strategy.

The hiring factors include Recruiting, People Development, Job Rotation, and Promotions. These are typical HR practices.

Hiring great people is about matching people to context. I don't believe there is a generic "A player" for every role. Knowing what's most important in a given role, and how to staff teams with balanced skillsets is key.

One way to build flexibility and resiliency into an organization of any significant size is through the use of Integrator roles. These are roles like Product or Project Managers, who exert influence outside of the traditional hierarchy. Having Integrators report to the highest levels possible helps imbue them with power. Giving them other authority - like budget and planning authority, control over key processes, and control over certain decisions helps, too.

Most of the activity in your organization does not revolve around your org chart. Building "lateral processes," that cut across your vertical hierarchy is key to improving performance, whether you change your formal organizational structure or not.

The Lateral Organization is about improving coordination across the hierarchy, which means better processes, collaboration, and often more autonomy in decision-making from teams.

Product advantages are erased quickly by new technology and competition. As these advantages disappear, the design of the organization needs to shift so to accommodate change. Designing an organization that is flexible and adaptable is paramount. If the "stable" part of the organization is the Functional departments, the changing part is the cross-functional teams and their varying practices and processes.

These are a few of my favorite principles for designing resilient, flexible organizations for Create (Adhocracy), Collaborate (Clan) and Compete (Market) cultures.

In Turning The Flywheel, Jim Collins encourages us to test things before making big changes. I think this metaphor fits well for organizational design.

Consider whether the design decision is a Type 1 or Type 2 Decision. A Type 2 decision is reversible, whereas Type 1 decisions can't be rolled back easily. Changing the organizational structure is a Type 1 decision. Running a time-boxed experiment with a small team is a Type 2 decision.

Before a change, feel out the changes with the broader team. Do you have the clout to pull off a big change? Will people give you the benefit of the doubt? Are they on board?

Every organization of significant size has inefficient or broken processes, outdated practices, team chemistry issues, and more. We can't solve all of the problems, and tweaking design in one area will likely shift problems to another area. Instead of aiming to solve all of your problems, only work on the highest priority bottlenecks that prevent you from growing.

We all are dealt a set of problems. If we can exert more choice over the types of problems we have, we'll be better equipped to meet our goals. Being conscious of how decisions in one area will push problems into another helps you to choose where you'd like your organizational dysfunction to reside.

In a dynamic market, Create and Compete cultures can benefit from distributing power and authority to lower levels of the organization in order to move faster and react to market changes.

Heed the "darkness principle," which says that we all have incomplete models of what's happening in an organization. Use managers more often as tie-breakers rather than as the default decision-makers in the organization.

Moreover, the autonomy of employees is good for business. A meta-analytic study of 72 workplace studies found that increasing autonomy (distributing control) is:

Research shows that teams solve problems better than lone-wolf A-players. If you're going to solve hard problems, you need to utilize teams in your organization.

More organizations are moving toward team structures, whether in combination with their vertical org chart or as a replacement. Deloitte says:

Teams are groups of people with common goals and leadership, shared responsibility, and the authority to make decisions. Teams are the fundamental unit of the greatest human achievements. Teams make work fun and motivating, and they get results.

Teams work when individuals bring their unique skillsets and experiences, work together to better define problems and create approaches to solving them, and then develop communication mediums for real-time problem-solving.

Tiger Teams and Task Forces are two examples of more flexible, impermanent team options that organizations can use to test team structures. Plan for how these teams will be led, measured, and rewarded, and for how they'll resolve inevitable conflicts that arise.

The more control that teams have over an end-to-end "work stream," the more autonomy and responsibility they'll claim, and the more impact they'll deliver. Once you've proved the model, you can scale the building of lateral teams.

For more on teams, see Effective Teams.

Whereas autonomous individuals can operate with little coordination amongst one another, teams must be highly-coordinated in order to achieve. Coordination means alignment, communication, relationship-building, and trust. That work is costly up-front but has high ROI in the long term.

Whether you re-organize the organization structurally or work through the Lateral Organization (See Organizational Structure), teams require that you work around structural or information silos to coordinate with groups of individuals.

Though individuals on teams need to be highly coordinated, teams must operate as independently as possible in order to achieve goals. The problem of dependencies within teams is solved by more coordination and higher levels of communication. Between teams, more dependencies lead to delays and waiting, and a lack of productivity.

The solution that Amazon used, covered in Working Backwards, was to eliminate interdependence by keeping teams focused on single projects or singular "work streams" that required minimal coordination with other teams. This led to the famous "Two-Pizza Team" concept.

Increasing networking across teams helps people to see the larger system at work and builds respect and trust, which improves coordination and collaboration. It also helps cross-train and build more flexibility in the staff. It's a key way to fight the subcultures that naturally form as organizations grow.

Some organizations use training programs so that people are exposed to more perspectives. General Stanley McCrystal used an "embedding" program to increase understanding between units:

Job rotation is commonly used to increase understanding across Functions, increase flexibility in staff and build relationships across Teams.

Information is power, and making teams powerful requires making data available to everyone. This means building data structures and accounting systems that allow for open, easy access throughout the organization.

When data is shared openly, knowledge becomes not the exclusive domain of managers but is everyone's responsibility. This creates more powerful and resilient organizations.

Having processes for handling conflict is critical to a healthy organization. If you don't manage conflict, you'll have politics and drama.

If people feel they can't disclose their feelings, can't reinforce personal boundaries, and can't effectively collaborate with others, they become ineffective in their roles. As people in these situations seek community and connection within the organization, they look for and find others like them, which creates a spiral of drama.

Conflict shouldn't be viewed as "bad." Conflict is neither good nor bad, it's an outcome of people working together, and it comes to every relationship at some point.

Solving conflicts requires that people learn how to state their feelings and share their concerns openly. Only after people have shared, can the group work to resolve the issues. No set of principles or processes can solve conflict if feelings can't be shared. This requires that individuals possess a level of maturity and feel some psychological safety.

Managing conflict can't be just a "management problem" to solve. To treat people like adults, we need them to be able to have and manage conflict within and across functions. A conflict resolution process and training allow people to take responsibility and defer relationship issues to management.

For conflict resolution practices, see Effective Teaming.

We're driven to learn. Learning is an intrinsic motivator, not an extrinsic motivator. Rewarding learning drives motivation in the workplace.

Jobs change quickly, and having the ability to learn is more important than knowing things. Focusing compensation on learning can help facilitate a learning organization by prioritizing continuous improvement and personal growth.

A culture that encourages people to experiment, learn new skills, and test their abilities, and that has clear Salary Bands, can benefit from a model of "learn to earn." Learn-to-earn is a model where people are rewarded for upskilling instead of achieving. This puts people in the driver's seat to personal growth and higher pay, and the organization into a position where talent increases over time.

Many organizations have shifted from annual performance measurement to a continuous process. Many indirectly link compensation to Rocks/OKRs.

Whether you use Google's CFR's - Conversations, Feedback, Recognition or The Center for Courage & Renewal's Lauds, Learning, Looking Forward, focus on the growth of the individual.

Feedback is a powerful tool that deserves strong systems. 360-degree or peer-based feedback removes pressure from management and changes the organization's design from being vertical and hierarchical to more horizontal. If feedback is both positive and critical, it becomes a mechanism for relationship and trust-building between peers.

Bridgewater's Dot Collector is built for collecting feedback at scale - a "big data" approach to peer feedback. Bridgwater launched a tool that organizations can use.

Upward feedback gives staff an opportunity to give feedback to the management team and allows the organizational designer to assess whether managers are doing the job as designed, and to what extent.

Consider where you'll be in six months, 12 months, and two years out. Design your organization in a way that helps you succeed today and doesn't require that you rebuild systems and structure in one year. Organizational change takes time, so planning, patience, and iteration are necessary.

At the least, create a future org chart so that you can anticipate the roles you'll need and the structures that make the most sense. Communicate it with your Leadership Team and Management group.