Organizational Design
Organizational Design

Organizational Design

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.

Understanding Org Design

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.

"When a designer is asked to help an organisation with a certain situation, the designer will tackle the problem in an abductive way. The designer will not walk into the pitfall of trying to solve problems from the same perspective that is used to view the problems... a designer always thinks in terms of what could be possible." - Steven de Groot (Source: Organizational Aesthetics)

Organizational Design Is Iterative

"You show me a successful complex system, and I will show you a system that has evolved through trial and error" - Tim Harford

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.

"You cannot predict how the humans in your organisation will react to your introduce some set of changes, watch how those changes ripple out in organisational behaviour, and then either roll-back the change, or tweak in response to those observations." -Cedric Chin (Source: The Skill of Org Design)

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.

"Business is not a bathrobe. One size does not fit all. Different problems in different environments for different people at different stages of development require different solutions." - Keith Cunningham (Source: The Road Less Stupid)

Three Models For Organizational Design

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.

McKinsey's 7-S Model Is A Thinking Tool

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.

Applying the Model

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

Strategy: What is our strategy? How do we intend to achieve our objectives? How do we deal with competitive pressure? How are changes in customer demands dealt with? How is strategy adjusted for environmental issues?
Structure: How is the company/team divided? What is the hierarchy? How do the various departments coordinate activities? How do the team members organize and align themselves? Is decision-making centralized or decentralized? Is this as it should be, given what we're doing? Where are the lines of communication? Explicit or implicit?
Systems: What are the main systems that run the organization? Consider financial and HR systems, as well as communications and document storage. Where are the controls and how are they monitored and evaluated? What internal rules and processes does the team use to keep on track?
Shared Values: What are your organization's core values? What is its corporate/team culture like? How strong are the values? What are the fundamental values that the company/team was built on?
Style: How participative is the management/leadership style? How effective is that leadership? Do employees/team members tend to be competitive or cooperative? Are there real teams functioning within the organization or are they just nominal groups?
Staff: What positions or specializations are represented within the team? What positions need to be filled? Are there gaps in required competencies?
Skills: What are the strongest skills represented within the company/team? Are there any skills gaps? What is the company/team known for doing well? Do the current employees/team members have the ability to do the job? How are skills monitored and assessed?

Nadler-Tushman Congruence Model Can Be Used In a Re-Design

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.

Applying The Model

This article from MindTools breaks down how to execute:

Work: start by looking at the critical tasks that underpin your organization's performance, from two perspectives – what work is done, and how it is processed.
People: look at who interacts to get these tasks done – bosses, peers, and external stakeholders, for example. Identify the skills, knowledge, experience, and education that they possess. Then, explore how they like to be compensated, rewarded and recognized for their work. Also, consider how committed they are to the organzation, and what career progression expectations they have.
Organizational Structure: map your organization's structures, systems and processes. Are there distinct business units or divisions (for example, regional, functional, or product- or market-specific)? Are there different levels or ranks, or does it have a flat structure? And how distinct or rigid are the reporting lines? Also, consider how standardized work is within your organization, and look at the rules, policies, procedures, measures, incentive schemes, and rewards that govern it.
Culture: this is often the element with the greatest influence, but the hardest one to analyze. You can explore your organization's culture by considering the leadership style and the beliefs and values of the individuals who work there. Think about the "unwritten rules" that define how work really gets done. (These stem from people's attitudes, beliefs, values, behavior, and so on, and from the processes and structures that you've already examined.) Look at how information flows around the organization, and whether there are any political networks in play
For the analysis portion, pair the areas head-to-head and assess their congruence with one another.
  • Work and People: is the work being done by the most able and skilled people? Does the work meet individuals' needs?
  • Work and Structure: is work done in a well-coordinated manner, given the organizational structure in place? Is that structure sufficient to meet the demands of the work being done?
  • Structure and People: does the formal organization structure allow the people to work together effectively? Does it meet people's needs? Are people's perceptions of the formal structure clear or distorted?
  • People and Culture: are the people working within a culture that best suits them? Does the culture make use of people's own resources?
  • Culture and Work: does the culture help or hinder work performance?
  • Structure and Culture: do the culture and the organizational structure complement one another, or do they compete?
  • As you work through these pairs, identify areas of congruence and incongruence, and consider how your organization's performance measures against its goals.

The STAR Model Is The Default Framework

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.

Three Shapers of Design

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.

  • Pooled Interdependence is when units share budgets or people.
  • Sequential Interdependence is when units coordinate the flow of work.
  • Reciprocal Interdependence is when the output of one unit is the input of another.

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

"If the work was predictable, a hierarchy or mechanistic form was appropriate. If it was unpredictable, an organic form was appropriate. By organic, the authors meant lots of lateral forms to foster coordination." (Burns and Stalker 1961) (Source: Designing Organizations)

STAR Factors

Structural Factors

How Much Specialization is Required

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.

"Greater scale permits much greater specialization. It's usually an advantage to be more specialized in many situations. Larger consulting firms and larger financial services firms can begin specializing around customer segments." - Jay R. Galbraith (Source: Designing Organizations)

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.

Levels & Span of Supervision In the Org Chart

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.

"Narrow spans aren’t inherently worse than wide ones. Narrow is better if you want low error rates and high operational excellence. Wider spans and looser controls are better for experimenting and developing loonshots and new technologies." - Safi Bahcall (Source: The Innovation Equation)

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):

If the leader and the group members are all highly experienced people
When all of the employees do the same work
When each employee's task is independent of the others
When the task is easily measured and easily observed.

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."

Process Factors

Informal Processes

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:

Whom do you talk to every day?
Whom do you go to for help or advice at least once a week?
With one day of training, whose job could you step into?
Whom would you recruit to support a proposal of yours that could be unpopular?
Whom would you trust to keep in confidence your concerns about a work-related issue?

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 Processes

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.

"They are the means of coordinating the interdependent functions within a business. They are increasingly sophisticated, expressed in software and automated." - Jay R. Galbraith (Source: Designing Organizations)

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

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.

"Regions, business units, and functions all have different ideas on how to spend the limited funds. The management process for allocating money and talent is the arena within which these conflicts are managed and discussed." (Source: Designing Organizations)

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

Reward Factors

"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.

Performance Measurement

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.

"Normally a clear, objective single goal will produce a great deal of motivation. People can understand it and can see how to connect their behavior to their own performance and bonus. However, the clearer, the more objective, and the narrower the goal becomes, the more that dysfunctions are likely to creep in." - Jay R. Galbraith (Source: Designing Organizations)

Job Challenge

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.

"When an employee gets promoted too fast and fails, they can be recycled back down to a position that they are proven at - but most companies don't do this and fire the employee. That's a bad practice, because promoting an employee into a job they're not prepared for is a management failure." - Andy Grove (Source: High Output Management)

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.

“When management is the only path to higher compensation, the quality of management suffers, and the lives of the people who work for these reluctant managers become miserable.” - Kim Scott (Source: Radical Candor)

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.

"We are all dependent on the need for competence. And if we don't fulfill that need during the forty or so hours we spend at work, we will search for competence experiences elsewhere, shifting our mental energy to nonwork activities." - Ron Friedman (Source: The Best Place to Work)

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?

"The rewards most often offered in programs of employee recognition typically include only two of the languages of appreciation: Words of Affirmation and Tangible Gifts...Our research shows that only about half of employees prefer appreciation to be shown through these two languages." (Source: The 5 Languages of Appreciation in the Workplace)

For more on recognition, see Cultivating Culture.

People Factors

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.

"There is no generic formula for what makes people successful, despite a great deal of effort and all sorts of assessments to try to come up with one. Many of the people we let go from Netflix because they were not excelling at what we were doing at the time went on to excel at other jobs." - Patty McCord (Source: Powerful)

Using Integrators

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.

Principles For Good Organization Design

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.

"Lateral processes are information and decision processes that coordinate activities spread out across different organizational units, providing mechanisms for decentralizing general management decisions." - Jay R. Galbraith (Source: Designing Organizations)

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.

Fire Bullets, Then Cannonballs

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

"Fire bullets (low-cost, low-risk, low-distraction experiments) to figure out what will work - calibrating your line of sight by taking small shots. Then, once you have empirical validation, you fire a cannonball (concentrating resources into a big bet) on the calibrated line of sight...Calibrated cannonballs correlate with outsized results; uncalibrated cannonballs correlate with disaster." - Jim Collins (Source: Turning the Flywheel)

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?

Choose Your Dysfunction

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.

"Pulling any lever in the system will have an effect on other parts of the system. You can't just reorganize, or just train, or just automate, as if you were merely adding some spice to the stew. Each of these actions changes the recipe." (Source: Improving Performance)

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.

Distribute Control to Handle Complexity

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.

"There must be enough central control to achieve coordination toward the larger system goal, and enough autonomy to keep all subsystems flourishing, functioning, and self-organizing." - Donella H. Meadows (Source: Thinking in Systems)

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.

"Only the whole organization understands all the work. That is why it's best to distribute control among everyone. Complex systems survive and thrive because control is distributed. It is why the Internet cannot be destroyed. It is why terrorist groups form independent, self-organizing units. And it is why organizations require workers to have a high level of control over their own work." - Jurgen Appelo (Source: Managing for Happiness)

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

"Positively associated with desirable employee outcomes, including the internalization of work motivation, well-being, work engagement, positive job attitudes, and desired job behaviors, and was negatively related with employee distress and undesired job behaviors." (Source: Leader autonomy support in the workplace)

Work Through Teams

Teams Outperform Individuals

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:

"In the long term, we believe there will be no leading organization that does not work primarily on the basis of teams." (Source: Organizational performance: It's a team sport)

What Is a Team And Why Do They Work?

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.

"Most of us at one time or another have been part of a great team, a group of people who functioned together in an extraordinary way - who trusted one another, who complimented one another's strengths and compensated for one another's limitations, who had common goals that were larger than individual goals, and who produced extraordinary results. I have met many people who have experienced this sort of profound teamwork - in sports, or in performing arts, or in business. Many say that they have spent much of their life looking for that experience again." - Peter Senge (Source: The Fifth Discipline)

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.

"They bring together complementary skills and experiences that, by definition, exceed those of any individual on the team. This broader mix of skills and know-how enables teams to respond to multifaceted challenges... Teams can adjust their approach to new information and challenges with greater speed, accuracy, and effectiveness than can individuals caught in the web of larger organizational connections." (Source: The Wisdom of Teams)

Flexible Teaming

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.

Maximize Coordination Within 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.

"Connections crisscross all over the place, and there is lots of overlap: team members track and travel through not only their own specialized territory but often the entire playing field. Trust and purpose are inefficient: getting to know your colleagues intimately and acquiring a whole-system overview are big time sinks; the sharing of responsibilities generates redundancy. But this overlap and redundancy - these inefficiencies - are precisely what imbues teams with high-level adaptability and efficacy." (Source: Team of Teams)

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.

"Hierarchies and classification systems are necessary, especially in complex fields of practice, so we will never get rid of silos. So the challenge is to find ways to get outside our hierarchical boundaries and see from multiple perspectives." - Harold Jarche (Source: Super-Connectors)

Minimize Interdependence Across Teams

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.

"Where was it written in stone that every project had to involve so many separate entities? It wasn't just that we had the wrong solution in mind; rather, we'd been trying to solve the wrong problem altogether. We didn't yet have the new solution, but we finally grasped the true identity of our problem: the ever-expanding cost of coordination among teams." (Source: Working Backwards)

Increase Networking and Training Across Teams

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:

"We would take an individual from one team - say, an Army Special Forces operator - and assign him to a different part of our force for six months- a team of SEALs, for example, or a group of analysts... By allowing our operators to see how the war looked from inside other groups, and by building personal relationships, we could build between teams some of the fluency that traditionally exists within teams." (Source: Team of Teams)

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

"People who are successful at rotational assignments learn how to learn; they do not simply gain the specific knowledge of the business... Individuals become more flexible, and if we are to create flexible organizations, we need flexible people. These people also develop relationships in the various departments, which then can be used later in lateral coordination attempts." - Jay R. Galbraith (Source: Designing Organizations)

Make Data & Information Available To All

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.

"The reconfigurable organization needs accounting systems, data structures, and planning processes that allow it to operate as a collection of miniature business units. All the data must be available to all the parties." - Jay R. Galbraith (Source: Designing Organizations)

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.

"Spider organizations are those with centralized control and if you cut off the head, the rest will die. In starfish organizations, cutting off one leg will not kill it, because intelligence is distributed throughout the organism." - Harold Jarche (Source: Super-Connectors)

Manage Conflict Well

If You Don't Have Conflict, You Have Drama

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

"Gossip, secrets, triangulating, retaliating, blaming, avoiding, turf wars, blowing up... Drama is what happens when people struggle against themselves or each other, with or without awareness, to feel justified about their negative behavior." - Nate Regier (Source: Conflict Without Casualties)

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.

"People seeking drama allies will keep looking until they find someone to play along, moving from person to person. They will reject or avoid people who refuse to enter the drama or who directly confront it." - Nate Regier (Source: Conflict Without Casualties)

Conflict Is a Natural Outcome

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.

"If conflict is suppressed, then the team will never become a team and the group will remain relatively passive, doing only what it is told to do." (Source: Games That Teach Teams)

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.

Focus People on Learning

"Humans are the learning organism par excellence. The drive to learn is as strong as the sexual drive - it begins earlier and lasts longer." - Edward Hall, Anthropologist

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.

"At times of change, the learners are the ones who will inherit the world, while the knowers will be beautifully prepared for a world which no longer exists." — Alistair Smith

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.

Use Feedback Systems

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.

"Hattie (2008), after synthesizing the results of 800 meta-analyses, came to the conclusion that 'the single most powerful influence enhancing achievement is feedback." (Source: The Six Disciplines of Breakthrough Learning)

Peer Feedback Practices

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.

Dot Collector

"Everyone shares a continuous stream of feedback about people’s behavior using an application called the Dot Collector. This custom tool allows people to record their assessments of any other person in two ways: summary ratings — thumbs-up, thumbs-down — and candid, specific comments about the person’s actions or inaction. The dots are individual data points, which are aggregated to reveal larger crowd-sourced patterns to connect the dots." (Source: An Everyone Culture)

Sun Hydraulics asks peers to reflect on two questions (Source: Reinventing Organizations)
  1. State an admirable feature about the employee
  2. Ask what contributions they have made to Sun
Google asked peers to reflect on two areas:

"We asked for one single thing the person should do more of, and one thing they could do differently to have more impact. We reasoned that if people had Just one thing to focus on, they'd be more likely to achieve genuine change than if they divided their efforts." (Source: Work Rules!)

Netflix executives used a "Start, Stop, Continue" peer feedback practice in their team meetings:

"Each person tells a colleague one thing they should start doing, one thing they should stop doing, and one thing they're doing really well and should keep doing. We were such believers in the value of transparency that we did this exercise in our meetings, out loud in front of the group." (Source: Powerful)

Upward Feedback

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.

Google's twice-yearly survey was anonymous, and used these questions (Source: Work Rules!):
  • 1. My manager gives me actionable feedback that helps me improve my performance.
  • 2. My manager does not "micromanage" (i.e., get involved in details that should be handled at other levels).
  • 3. My manager shows consideration for me as a person.
  • 4. My manager keeps the team focused on our priority results/ deliverables.
  • 5. My manager regularly shares relevant information from his/her manager and senior leadership.
  • 6. My manager has had a meaningful discussion with me about my career development in the past six months.
  • 7. My manager communicates clear goals for our team.
  • 8. My manager has the technical expertise (e.g., coding in Tech, accounting in Finance) required to effectively manage me.
  • 9. I would recommend my manager to other Googlers.

Plan For The Future

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.

"Create your future org chart. Draft it out. Don’t use names; just stick to titles that are recognizable to you such as CFO, EVP of Talent, CFO, Controller, etc. (You can change titles to something better later if desired; for now, though, just stick to titles that are a rote description of the positions.) As time passes, review your future chart. Revise it." - Cathy McCullough (Source: How CEOs Should Spend Their Time)