Designing Effective Organizations: How to Create Structured Networks [Hardcover]

A highly detailed reference work for anyone struggling with ineffective organisational structures. It advocates a demanding approach to structure redesign which will deter some senior managers. However, I'm sure that if you follow their methodology no-one could accuse you of not trying! Repetitive in parts but they get their points across. Probably essential reading if you're undertaking this process in a complex business.

There is no single solution to designing an effective organization. What you can do is pose a number of key questions to help you design an organization appropriate for a particular context and time frame.

Goold and Campbell, from Ashridge Management Centre, who I came across as a member of the Organization Design Forum. Have put forward a way of thinking about organization design by setting out nine design tests, based on two concepts:

* FIT which is based on the idea that organizations should be fit for purpose;

* DESIGN PRINCIPLES, which have been distilled from previous good work in organization design.

The four drivers of fit and the nine design principles are illustrated as set out in their book, and set out below.

FIT Drivers:

* Product-market strategies.[Market advantage test]

* Corporate strategies.[Parenting test]

* People.[People test]

* Constraints[Feasibilty test]

For example to enlarge on one of the points above - the people fit/test. Does the design adequately refect the motivations, strengths and weaknesses of the available people? The structure should fit the available /potential core talent needed to deliver the strategic aims, eg the kinds of recruit that will be needed for the future and the existing talent in the organization, eg the top management team or the core IT team.

Expanding on the Constraints fit, the authors propose a feasibility test. Does the design take into account the constraints that might make the proposal unworkable? The requirements are to ensure that the external environment has been scanned to identify all possible constraints eg legal and government directives in setting up joint ventures in particular countries, and the robustness of the design against each constraint or possible source of failure eg how will a major breakdown in one part of the organization affect the whole operation. (Of course if you fire a whistle blower/head of risk management, you will not get very far on this dimension, as we have seen in recent disclosures].

THE GOOD DESIGN PRINCIPLES:

* Specialization principle.(Specialist culture test]

* Coordination principle.[Difficult links test]

* Knowledge and competence principle.[Redundant heirarchy test]

* Control and and committment.[Accountabilty test]

* Innovation and adaptation principle. [ Flexibility test]

Expanding on the Design principles. The accountability test. Does the design facilitate the creation of control processes, for each unit that are appropriate to their roles and responsibilities. Economical to implement, and motivating for the managers and employees in the unit, eg are customer-facing units, given enough 'slack' or autonomy to meet their objectives and are they rewarded for doing so?

With the flexibility test. Will the design help the development of new strategies and be flexible enough to adapt to future changes. For example; do innovative units have enough access to talent to meet demands for new products or services, and are they rewarded for learning, passing on their learning and for putting it into practice in the form of innovations?

These nine deign tests are extremely useful because they can be used to assess the strengths and weaknesses of existing organizations, or proposals for a new organization.

In summary, these most practical set of design tests would be a good place to begin to evaluate your own organization, focusing on its existing structure or on any proposed changes.

For other related work have a look at, Designing your organization - pub 2007, for very good quality material on organization design.(see my other reviews)

Some additional material that I reccomend that you look at is:

- Integrated Organization Design - the new Strategy Prioriy for HR Directors. A White paper - 09/01, pub Jan 2009 by CPHR. (The centre for performance led HR, based at Lancaster University - Management School) This can be downloaded free.

The first part of a wider ranging project bringing together Organization Development and Organization Design. Into a "new" capability, called by the authors "Architectural Design".

The paper covers the ground well and will challenge your views. Picks up on Galbraiths work eg the Five Star model.

Stan Felstead - Interchange Resources - UK.