LEADING THOUGHTS

Researchers at the Centre for Performance-Led HR (Lancaster U Management School) argue that organizational design is fast becoming a strategic capability, particularly for those organizations undergoing business model change. And where should that strategic capability reside? “For HR to be truly strategic,” they write in a white paper, “the function needs to develop the capability of influencing business model design at each level of analysis (industry value web, organisation value proposition, and component structure).”

In this video, the researchers make their case.

At the 0:38 mark, Paul Sparrow discusses what organizational design capabilities involve, and makes the distinction between org design and organizational development. He says HR is in the perfect position to marry the two.

At the 1:10 mark, Craig Marsh offers a series of questions that HR directors should ask of themselves around the need for leading the charge in org design.

At the 3:00 mark, he says HR directors need to think bigger, more broadly, and in a more integrated fashion.

Download the CPHR white paper, Integrated Organisation Design: The New Strategic Priority for HR Directors, here or send me an email at Alan [at] AlanMorantz [dot] com.

For organizations to be highly innovative, they must be skilled in creativity (R&D) and production (operational execution), with the two sides working together effectively. Seems simple but in most companies, the two capabilities are difficult if not impossible to integrate, say Booz & Company consultants Zia Khan and Jon Katzenbach.

Writing in Strategy+Business, Khan and Katzenbach refer to the two parts of an organization: the formal side with its codified processes, reporting structures, and decision rights (where production mostly sits), and the informal side, with its social networks, shared values, and mutually understood rituals (where the creative work flows).

Organizations tend to favour one side or the other. As a result, there is either wasted effort in chasing too many ideas or an arid environment in which innovators cannot plant roots.

Khan and Katzenbach offer advice on how achieve the production-creativity balance.

“Figure out ways to shape the formal and informal structures together, integrating them from the beginning.” One way is by mapping informal networks to identify patterns in how information flows. Then plant creative and socially adept people in these positions and make use of their networking talents to sharpen ideas and win support.

“Capture budding ideas from the widest possible net and collect them centrally.” Use formal structures to harvest ideas that come up at the water cooler. Example: Starbucks.

“Involve multiple perspectives in ‘go/no-go’ choices from the outset, and thus make them stick.” Find ways to get marketing, finance, and engineering together at the same table for “rigorous and synchronized debate.” Focus the debate on a new idea with these three questions: Will customers want it? Can we produce it? Will we be able to make money from it?

“Motivate the right behaviours.” Celebrate failure as well as success. Use informal communications and formal incentives to support focus and cohesion. Apply the lessons of failed projects to other projects.

The article includes a short case study of Bell Canada as an example of a company getting the creative-production balance right.

“Are you killing enough ideas?” by Zia Khan and Jon Katzenbach; Strategy+Business (Issue 56, Autumn 2009)

Link to Strategy+Business

photo credit: kana76