In my research on organizational health I've been reading Warren Bennis's book Changing Organizations definitely a golden oldie. In it he has a quote from Wilfred Brown, Chairman and Managing Director of Glacier Metal Company (1939-1965) who said 'Optimum organization [forms] must be derived from an analysis of the work to be done and the techniques and resources available.'
This strikes me as eminently sensible, and is a precept I teach in the organization design training programs I facilitate. But it is highlighted by looking through the lens of organization health. Boiling down the many definitions and lists of characteristics that I gathered it seems that four attribute emerge. A healthy organization is one that has:
o Effective performance or functioning
o Well managed adaptation, change and growth
o A strong sense of alignment interdependency and community
o A spirit of energy, vibrancy and vigour, perhaps what the on-line shoe retailer Zappos defines as WOW
This being the case then what form should its organizing structures and forms take? Too frequently organizational forms are equated with the organization structure chart i.e. names of jobholders in boxes that show a formal reporting relationship between the jobholders.
What these structure charts lack is any acknowledgement of the work that has to flow through them. This is a mistake as failing to explicitly recognize that getting work done efficiently in order to meet organizational goals is, or should be, the purpose of the organizing frameworks and structures. Too often this formal structure chart is focused on personalities, politics, and decisions made that are divorced from a careful consideration of the business model and the work.
The business model is the 'what and how' of a business in terms of the choices and decisions made in relation to its specific operation. Think about Walmart (or Asda in the UK) for example. The choices and decisions that Walmart makes about its offer, partner networks, distribution channels, and so on make the company distinctively Walmart and not Tesco or a similar competitor. Walmart operationalizes a business model that is noted for:
o Low labor costs (it is a no union company)
o An authoritarian structure
o Hyper-centralized managerial control
o Requiring workers promoted to the managerial ranks to move to a new store in a different location
o Workweeks around 50 hours or more, which can surge to 80 or 90 hours a week during holiday seasons.
o Cutting out the middlemen and shifting costs and risks onto the manufacturer.
o Bringing warehousing, distribution and trucking in-house
o Building new stores around distribution centers
o Harnessing retail information through high-tech barcode and product-tracking software
o Revolutionizing the relationship between merchant and vendors.
These business model choices and decisions mean that the customer gets the lowest possible price for a product.
Through the formal organization chart that depicts hierarchies and formal relationships. It includes (in relation to job descriptions and level) formal allocation of accountabilities and authorities.
Through the informal organization chart that is revealed through social network analysis and the way people learn how to do their work in relationship with others. It includes networks of influence, and sources of informal power and authority.
Through a combination of explicit and informal in patterns that could be revealed by investigation and analysis. (For example why does person A ask her supervisor to make a decision, but person B in the same role but with a different supervisor makes the decision herself).
A healthy organization is one in which the four elements of business model, formal work organization, informal work organization, and the combination of formal and informal work organization are closely aligned.
Does this make sense to you? Have you seen alignment in your organization? Let me know.
Naomi Stanford 