By Ron Carucci
For many executives, the concept of organization design is an oxymoron. They’re so consumed by working in the organization that they lack the patience to work on the organization.
Here are guidelines for successful redesign:
- Organize around competitive advantage. If your edge is responsiveness or speed, the organization must be built for that. If it’s quality and service, that’s a different configuration. A narrowly defined set of critical choices is the foundation of good organization design.
- Create boundaries between competitive and necessary work. Competitive work—work that directly drives, or supports, the ability to compete—must be organized for effectiveness and mastery. This is the work you have to be better at than anyone else. On the other hand, necessary work—tasks that you have to do on par with anyone else, or in compliance with regulatory requirements—should be organized for maximum efficiency. Problems happen when competitive and necessary work get too close, and the urgency of the every day undermines the strategic work of remaining competitively focused.
- Focus on the seams. Great service sits at the intersection of sales, customer service and supply chain. Product innovation sits at the intersection of research and development, marketing and business intelligence. Where these seams come together, work must be tightly linked to ensure coordination. Repeatable core processes, technology and information-sharing platforms, and crossfunctional teams are all design options that help create seamless linkages.
- Distribute decision rights. A good decision architecture helps clarify everyone’s expectations about what they are accountable for. It’s the set of authority structures, roles and processes by which the organization is managed. Fail to reform this, and your organization may simply retrench to silos and border wars.
- Design clear, meaningful roles. Roles should be designed, so that people are continually challenged and fulfilled. Stretching people’s skills sustains a feeling of personal growth and satisfaction. It also enables great organizational breadth, something vital for when people are ready for expanded leadership responsibilities.
Ron Carucci is cofounder and managing partner at Navalent.