How Organizational Design became (ir)relevant.
The world is changing rapidly. That’s not new. But many companies do not know how to translate those external changes into the way they organize themselves. Organizational Design has been of the agenda for a long time. But now it’s back. But it’s different then two decades ago. So why has it disappeared? And what has changed since then?
Organizational Design disappeared because it became irrelevant. We thought that everything that we needed to know was known. Divisional structures, centralization, decentralization, matrix, flat structures, coördination mechanisms, … it all has been described and for every situation there was a solution. OD became a menu out of which organizations just had to choose.
But the world has changed. Yesterday’s solutions are no longer enough for today’s challenges. Don’t get me wrong. Some of the old stuff is still valid as long as we don’t see them as out-of-the-box solution. We are inundated by the new stuff: holacracies, heterarchies, teal organizations, new ways of working, ecosystems. It’s like there’s a new religion in the corporate church.
And the simple reason is that markets change. The rules of the game change. There’s a surge of disruption. Nothing is the same as before, nor will it be ever again the same as it is now.
New Theories do not work if you apply them
I know one thing for sure. These new theories don’t work if you apply them. You have to create your own theory.
Every organization is unique and has a unique cocktail of culture, history, leadership brand. So the one thing you should not do, is trying to copy what works in another company. And you should not be normative about what other companies don’t do.
We can look with admiration at companies like Google, Netflix, Semco, MorningStar, Durabrik, Colruyt, … These companies do fantastic things, but there is no reason your company should be just like them. Look and learn, but never copy.
Organizational Design as a Process
So here’s what we should do:
- Look at Organizational Design from many angles.
- See it as a way to create a context where things happen.
- Focus on the problem you want to solve
- Analyse how your current company practices are helpful or not.
- Set up experiments
- Be willing to fail and to return to a former situation.
- Don’t do a big bang. You might blow up everything.
- Determine how you are going to scale up successful experiments.
- Never start an organizational design process with a drawing of an organizational chart. As a matter of fact never start an organizational change process with a org chart.
Spotify’s organizational Design
If you have time, look at this video. You’ll see it’s about Spotify’s culture. Hey. Isn’t this blog about organizational design? Yes, it is. But that’s the point. Organizational design is about all aspects that support a business strategy. Culture, processes, leadership and structure need to be aligned. That’s hard.
There’s a big difference between building a culture in a start-up and changing an established corporate culture.
So organizational design is back. But it has changed.
Beware the next big Thing, by Julian Birkinshaw