The Nine Guidelines included in this article are based on Albert Cherns seminal work and his 1976 presentation at Loughborough University on his Principles of Organizational Design.
If you’re interested in effective organization design, then you’ll find it useful to adopt a set of organization design principles.
What is Organizational Design?
Organization design principles inform decisions about both process and content of design work. Be careful with these principles. They alone don’t make a design specialist. You cannot hand these ideas to an HR generalist and assume a good design outcome. You wouldn’t want me flying your commercial aircraft on the basis that I understand the principles of aerodynamics. Competency in organization design leadership is built not only on principles but also complementary skill-sets, personal development, and practice.
If you believe your organization has design opportunities, conservative advice is to contact a specialist in the field. You are looking for help among those who have a coherent set of organization design principles and experience applying them to real work. The benefit is a much higher probability for a successful design outcome.
9 Organizational Design Principles
These principles define a path for leaders like you who require a different organization from the one you experience today.
Design is System Change
It is helpful to temporarily set aside the term organization design structure in favor of system change. The former frequently conjures images of box charts and dividing the organization according to some internal logic. System change is what you’re really managing when designing an organization. Because of this, there are basic principles of organization design that focus on the design process itself.
1. Respect the Process.
The first organization design principle is that the process must be compatible with its objectives. If your higher-level objective is a participative, responsive, and knowledgeable workforce then your design process must reflect this intention. If, on the other hand, you are satisfied with an organization that waits for direction, works to order, and is slow to change, then traditional, top-down, expert-driven approaches to design will satisfy your interests.
2. Use Minimum Critical Specifications.
We can predict design effectiveness and implementation success not so much by some objective quality of the design, but by employees’ ability to see their ideas in the design. Therefore, we must be careful to avoid over-specifying how work will be done in the new design. We can be quite precise about what must be done in the form of setting minimum critical specifications while designing no more than is necessary. We call this designing to minimum critical specifications.
3. Create System Awareness.
Organizations that are externally responsive and internally adaptable are populated with people who have more complete views of the full system. An organization design principle is to foster as much wall-to-wall system awareness and network connectivity as possible through the design process itself. Your organization is not a machine whose parts are fixed in form and function. Rather, it is viewable as a living system capable of adapting to changing environmental demands if the design and design process establishes proper conditions.
Focus on Core Value-Creating Work
Every organization exists to turn inputs into outputs. The process of conversion is called the value chain. Simply put, the conversion process has steps that are performed in some discernible sequence. Design to accommodate the work. Here are associated principles:
4. Control Variance Close to the Work.
A variance is any “unprogrammed” event in inputs, process, or outputs. Much of the design of management layers such as supervision and inspection is intended to control or eliminate variance. When we separate this activity in time, place, or job from the conditions that created the variance we limit learning and create unnecessary delay as we export the issue up and across the organization. Thus, a good organizational design principle is to enable an organization to manage variance as close to the source of the variance as possible.
5. Keep Work Whole.
Creating organizational boundaries is an unavoidable aspect of design. A notable disadvantage to boundaries is the way they interfere with sharing knowledge, experience, and cooperation. The more we separate whole systems of work through boundaries, the more inefficient, error-prone, and dysfunctional organizations can become. Therefore, it is good practice to identify whole units of work and strive to keep them as whole as possible when defining organizational boundaries.
6. Direct Information to Usable Location.
The information systems that operate within an organization should be designed to deliver information to the point where action can be taken based on the information. A work team with the right information can manage its variances within the team and avoid exporting the issue across organizational boundaries.
Balance the Technical with the Human
Your organization is best viewed as a system of both technical and human dimension. Recognize both and design your organization such that these aspects fit together. Ideally, your design team will include members with technical expertise in the value chain. Do not allow them to work alone. You must augment the technical mind with the social mind.
7. Promote Desired Behavior through System Elements.
Employees take their behavioral cues from various aspects of the environment and they are quick to spot inconsistency. Thus, an organization design principle must focus attention on mutually reinforcing design elements. For example, if you want to promote team collaboration, then you should not design performance management systems and consequences that promote internally competitive, win-lose behavior. This focus on internal coherence applies to virtually all human resource programs beginning with practices to attract the right talent for the organizational system. This is another good reason to have HR leaders involved in the design process.
8. Design Jobs for Engagement.
Further aligned to the idea of organizations as social systems, design must create jobs that attend to the needs of those doing the work. Not everyone wants the same responsibility, involvement, and growth opportunity as anyone else. Even so, there are fundamental job characteristics that support a quality of working life. It is advisable that job design activity is informed by these characteristics such that jobs of obviously poor quality are not an outcome of a design effort.
9. Don’t Refreeze.
The model of unfreeze the organization, change the organization, and refreeze the organization is no longer useful. Your organization must continually evolve with environmental conditions. It is advisable to embrace the idea of continuous design. This does not mean you are always subjecting your organization to high levels of disruptive change. It does mean that you view the organization in dynamic and not static form. Change is always happening in our environment. You must always be attentive to the quality of fit between the environment and your organization. Do not view organization design as a project tightly bounded in time.
Beyond the Organizational Design Principles: Experience Matters
Every organization designer must base their practice on some grounding view of the work. You now have nine solid organization design principles that you might choose to adopt. Even so, principles do not make a successful designer. This is my major caution. It is not enough to have principles. Experience matters.
You’re probably seeking help if you’re considering design work. Ask a prospective helper two things. First, ask about the organizational design principles that inform their design practice. Be patient, they might not be prepared to answer such a direct and penetrating question. Second, ask about their design experience. How do they put their principles into action?
The benefit is that you gain a better understanding of the depth of understanding and practice that a helper can bring to your organization. This will help you make good choices for design support.
“If you want a plan implemented, a company reorganized, work redesigned, or many problems solved all at once, get as many key stakeholders as possible in one room and ask them to work on the task together.” –Marvin Weisbord, 2012
Dan Schmitz is a Consultant at ON THE MARK. OTM’s experience and passion for collaborative business transformation that’s supported by pragmatism, systems thinking, and a belief in people is unparalleled. OTM has been in business for 29 years and is a leading organization design firm.