Organizational Design, Diagnostics Go Agile

By Pamela Babcock Nov 18, 2013
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NEW YORK—Practitioners at high-performing organizations are finding a variety of ways, including using “scrum teams” and scenario planning, to help make their companies’ design more agile, nimble and, therefore, more successful.

There are myriad organizational design models, ranging from the more traditional functional and divisional designs to team and matrix structures to boundaryless organizations. Although all can serve a specific purpose, a company’s ultimate goal should be to adopt the most appropriate design that can best support the components of its business strategy.

Speakers at the Nov. 7-8, 2013, Organization Design and Diagnostics conference, hosted by The Conference Board, shared the most important things they’ve learned about how to effectively implement design and diagnostic work in complex organizations in order to be viewed as strategic partners with senior leadership.

Tony Williams, vice president of global human resources and growth strategies at Tyco, said building HR business competency is key and it’s something Tyco has focused on as it transitions from a holding company to an operating one and as its new organization and strategy undergo reassessment, redesign and realignment. Doing so has helped Tyco significantly in “setting a standard in how we are diagnosing, assessing and then partnering with our organization development partners,” he said.

Elaine Mason, vice president of organization effectiveness at American Express, stressed the importance of “meeting the client where they are” when addressing design.

“You have to recognize that you can only move people so far,” said Mason, who runs an internal organizational design consulting team that supports the business. “And the more you can speak to where they are today, the more they are actually going to be able to listen.”

Brenda Brinson, assistant vice president of organizational effectiveness at USAA, echoed a similar theme, noting that it’s difficult to design an organization while sitting in the stands.

“You have to get on the court, be there making the plays with them and be a partner in the design so it’s our design and it’s our game, [rather than] something I’m doing for you or doing to you,” Brinson explained.

Organizational design is “a much easier thing to do with people,” agreed Reed Deshler, principal at organization design firm AlignOrg Solutions, particularly because “if thinking and behaviors don’t change, results don’t change. Whatever approach, technique, model or process you go through, it has to engage the head, hearts and minds of people.”

Testing “Scrum” Teams at American Express

As a consultant, Deshler said, he’s observed that most companies look for ways to get design done quickly—“not necessarily bad or cheap, but fast and effective”—and for that reason, organizations are increasingly looking to incorporate agile methodologies.

Agile methodologies support incremental or evolutionary development, change or problem-solving brought about through collaborative means, rather than through more abrupt wholesale or mandated changes.

For example, Mason said American Express’ organization design team is currently beta testing how best to use scrum teams (regularly used by software and technology firms for product development) in two business units. She said her design team typically does three-month organization design engagements, followed by an assessment, recommendations for development and then implementation. However, the scrum teams work in shorter weeklong increments to identify problems and implement needed corrections more quickly.

“[These teams] actually have a very consistent cadence,” Mason said. “They meet every single day, every person has a defined role, and there’s someone who is the ‘scrum master’,” or team facilitator. Because organization design is needed to support product development, the process helps identify things like “bugs in the system and pain points,” which must be addressed to get the product developed and to market, she added.

Mason said using these teams has changed the traditional assessment process by making it possible to move from assessment and recommendation to implementation in as little as two weeks. But it’s being done iteratively, so it’s not a full end-to-end organization redesign “where you blast the big announcement that ‘We’ve made all these changes.’ ”

Mason said the process, especially for product-focused groups trying to turn out 40 versions of products annually, helps the company to meet “clients where they are and really helps us adapt our design work to how they want to operate.”

Scenario Work and More

Scenario planning also helps in creating useful organizational design.

Joseph McCann, distinguished principal research fellow at The Conference Board, said scenario work is “immensely powerful” when it’s done before redesign, as it helps leaders connect the dots, see the big picture and understand that design is a good solution to a particular challenge. During such planning, leaders might envision what a green future for their organization looks like, then discuss the design, knowledge and skills implications of that scenario.

American Express uses scenario play-out “quite a bit” before it implements designs, Mason noted. The company is developing an assessment tool that will help leaders do a better job of root-cause analysis—that is, identifying what problem they’re actually trying to solve. She said one big challenge to date has been company leaders saying, “Something’s not right with my organization; I need to move my [organizational chart] boxes and lines immediately!”

It helps when leaders can be directed to “dig in” and identify what they want to do differently, then address how doing that might need to look within - their organization, she advised.

“We’re essentially creating a level of literacy in [organization] design in our leaders, which I consider just as important as their understanding of their business model,” she said. “Our job is to help get them to that level of literacy and to make sure our HR business partners are right alongside with us.”

Pamela Babcock is a freelance writer based in the New York City area.​

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