OD consultants: learn to challenge

In a recent organization development course I was facilitating someone asked the question "How can you challenge a leader if you think he or she is making the wrong decision about an organizational change?"

I get a lot of questions like this and it seems to me that they are really about how to recognize and use your sources of power. Why do OD consultants need to think about their sources of power? There are two main reasons. First, because often OD consultants are of a lower level in the organization's hierarchy as it appears on the organization chart than the managers they are working with. Typically organisational managers and leaders draw on formal authority, control of resources, and use of organisational structure, rules and regulations. Their status and power are signalled in the organization chart. These higher level managers have what is called 'positional power' which gives them certain privileges and responsibilities that the lower level OD consultant does not have. The closer someone is to the top of the chart the more they are perceived to have the right to ask for things and not be challenged or questioned. In these circumstances the OD consultants feel that they must do what the higher level person tells them to do without questioning it.

Second the OD consultants are usually based in Human Resources functions and managers tend to think of HR as a service function that does what it is told to do by operational managers. In this case the managers feel that they are in a position to control other parts of the organization because some parts, including HR, are thought of as 'support' functions, while others are 'delivery' functions. In most companies the delivery functions are considered more important than the support functions.

So how can an organization development consultant do to remove the barriers of positional power and control of support organizations? The first step is to recognize that organization development work always involves challenging and questioning. This means learning how to ask a lot of questions in way that is not in a combative or confrontational but careful, constructive, and confident. The second step is to develop really excellent business knowledge and, more importantly, keep it up to date.

Read this extract from an advertisement placed by a large multi-national company for an OD consultant and you will see how the challenging and questioning ability is described in terms of influencing skills:

This is largely a role of influence, balance between strategy and tactics is critical. This will be a person who leads from behind. It is critical that he/she has a customer-focused perspective and orientation to the process. To make the point again, this person must be exceptionally strong in a role of influence and flawless in their approach related to managing people and expectations.

Being able to influence without authority is at the heart of an OD practitioner's ability to challenge and question effectively – often a tricky thing to do in difficult situations where, for example, there is no opportunity for a second chance, or there is a lot of resistance from another person or group.

Further on in the job spec for the OD consultant comes the requirement for a "business-oriented" approach:

While this person will be expected to have deep technical skills in organizational development, their holistic business acumen and practical results-orientation will be critical for their internal credibility. This position's success will be measured by the job holder's business orientation and the continuing demand for their involvement by operational line executives throughout the company.

So in order to be able to challenge and question effectively the OD practitioner needs to have excellent influencing skills and a strong sense of the business. This ability to talk the same business language as line managers, and to realize that they have time, budget, and cost constraints as they try to drive performance is an essential part of OD consultants proving that they are truly business aware.

The first step in learning how to influence effectively is to find out what your current influencing capability is. There are many influencing skills surveys available and it is worth finding out more about these as a good diagnosis can help you find out where to focus your efforts to develop your influencing skills. One assessment tool suggests that there are 5 core skills required for effectively influencing others.

1. Openness which asks how well you set agendas, build trust, handle concerns, and manage the other person's expectations.
2. Investigation which assesses your ability to diagnose the situation, ask good questions to uncover needs, listen attentively, and help people take another look at their decisions.
3. Presence that examines the way you can help people consider the potential consequences of their choices and decisions and how they might benefit from exploring a range of options.
4. Confirmation that explores how well you do at handling concerns and gaining agreement even if there are a number of different ideas in the room.
5. Rapport building that considers your ability to build long-term relationships that are mutually beneficial

Once you have done this look for courses or books that will give you some information and some practical exercises you can apply as you learn to influence. A useful book on this is Influencing: Skills and Techniques for Business Success, Fiona Dent and Mike Brent, published by Palgrave MacMillan. Then keep on practicing.

To develop business acumen you need to learn about the industry sector that your company operates in, the market conditions, the competitors and so on. There are usually specialist journals by industry available. Additionally there are numerous business journals and magazines. Some to read are the Harvard Business Review, McKinsey Quarterly, and strategy + business. All of these have websites that you can learn more from.

But as you are developing these sources of power remember that you already have some. You have the technical skills related to human resource matters and employment conditions. You have a certain amount of resource power – the manager wants you to do something so you are a resource to him/her and you can do the work 'going the extra mile', or you can do it just well enough.

Use your power skillfully and take action to develop your influencing skills and business knowledge. My next step in doing this is to take a program, Know the World, Know Yourself at the newly founded Global Shift University.

Good wishes for 2012.

Running scared or running positive?

This past week has been exceptionally busy for me, but reflecting on it a theme has emerged as, among other things, I've read three articles on healthy communities, participated in a discussion on organization development in China, and read a lovely article about a woman in her 70s who is an excellent runner and has developed her form using Chi running techniques, and commented on a wellness white paper a colleague sent me.

The connection between all these is close, albeit from different perspectives. They are all concerned with creating and using positive energies and emotions. Doing this leads to individual and organization health and high performance. I'm glad that I've recognized the theme and can now re-group myself as by Friday I felt thoroughly pulled down by the inertia, politics, and power plays of organizational life. (Not helped by watching the movie All the King's Men about a politician,Willie Stark, who "begins his political career as an idealistic man of the people but soon becomes corrupted by success and caught between dreams of service and an insatiable lust for power")

Meg Wheatley's interview in strategy+businessreinforces my view that community matters. She makes the point that "In a time like this of economic and emotional distress, every organization needs leaders who can help people regain their capacity, energy and desire to contribute". Unfortunately, she also says that people are reporting that "mean-spritedness is on the rise in their companies. And there seems to be a growing climate of disrespect for individual experience and competence." Partly she thinks this is due the uncharted territory that we (organizations) are in. Certainly in my work this week I've heard the phrase 'we're doing things we've never done before' echoed several times, and that is somewhat scary and I've observed that people are reacting in a scared way.

Wheatley has some antidotes to this 'running scared' mentality including taking time to reflect, making choices, and learning how to find the place beyond hope and fear. In another article of hers she quotes Rudolf Bahro, a prominent German activist and iconoclast: "When the forms of an old culture are dying, the new culture is created by a few people who are not afraid to be insecure." Bahro offers insecurity as a positive trait, especially necessary in times of disintegration."

As she rightly points out living with insecurity and taking a reflective and thoughtful path to manage it positively is a lot easier said than done but nevertheless has huge benefits, and pays dividends in terms of higher motivation, and performance as well as increased feelings of individual well-being that ultimately contribute to the creation of organizational health (the collectivities of individual well-being among other factors).

In the November issue of ACSM's Certified News, Margaret Moore (aka Coach Meg) of Wellcoaches Corporation discusses the 'pivotal role of positive emotions in successful group performance', drawing on the work of Marcial Losada and Barbara Frederickson to argue that groups and communities that have positive emotions and participative management practices are higher performing than those that are fear driven, rule bound, and risk averse. Her article has a nice illustration of the butterfly effect (Lorenz equation) that I learned about while taking a program on chaos theory.

Moore presents a list of Losada's findings that, if applied, would help develop the positive emotions she advocates. One that I would like to see more of is the ratio of positive and negative topics and points made in meetings staying at above 3:1. Do this focusing on "positive topics, asking positive questions, providing affirmations, exploring strengths, or success stories.

In one of the meetings I attended last week someone presented a change curve (the standard, simplified, type of visual about the emotions people feel about change), and talked, humorously, about the 'valley of despair' part of the curve that she feels in. We all enjoyed the discussion and laughed a lot so maybe humor is another way of generating positive emotions. (I'll ask her on Monday if she has moved on from the valley of despair towards 'the search for meaning').

The content of these articles relates to another article I read (in November's AARP Magazine) about Betty Holston Smith. She is in her 70s and has run eight ultramarathons in the past four years. Her running technique is based on chi running (Chi is energy – the life giving, vital energy that unites body, mind and spirit a concept that has its origins in early Chinese philosophy). Her positive energy abounds and is a testament to its contribution to high performance.

Finally a co-worker asked me to review the business plan and rationale for an organizational wellness program that looks at five areas of well-being: career, mind and body, financial, community (being a member of a goal oriented or special interest group), and social (the network of relationships a person has). The paper lists the organizational benefits of such a wellness program including – as Wheatley, and more both imply in relation to reflective behavior and positivity:

 Increased employee productivity
 Higher quality work
 Improved employee morale and job satisfaction
 The ability to innovate, implement and adapt to change
 Reduced turnover
 Fewer stress-related disabilities and illnesses
 Reduced absenteeism
 Reduced presenteeims (employees who are not engaged)

I wait to see if the program will be financed or introduced as we are currently focused on stringent cost cutting, and axing of what are seen as discretionary efforts.

The Chinese connection came up again in the discussion I had with two Chinese colleagues about organization development in China. One of them mentioned the principles of yin/yang, wondering why organization development as we know it is currently rooted in western traditions, and suggesting that organization development that flowed from Chinese traditions might have a very different aspect and approach.

It was a fascinating discussion originating in the idea that a Chinese organization I am working with would like to offer a recognized and certified organization development program to its members. The plan was to buy in an existing western one. What emerged as we talked, however, was the notion of co-creating a Chinese organization development course with, among others, people who have been on the two-day organization design and development programs that I have run there and then aim to get that one certified.

The intention of this approach would be to explore and include more of the traditional Chinese philosophies and approaches – my colleague mentioned the yin-yang complementarities – and develop a potentially very different approach to organization development that could act to counter balance the fear and anxiety noted by Meg Wheatley, whilst recognizing that both exist as part of the dynamic system of an organization.

What are you doing to balance your fear and anxiety with positive energy and emotion? I've registered to take a half day course in Chi running!

Are private offices status symbols? And what happens if we take them away?

Many organizations are in the throes of supporting people as they transition from current ways of working to new ways of working. For many people the new ways of working are radically different. Among other changes they are moving from

  • Own desk/office space that is assigned to them to shared space, perhaps desk sharing or hoteling
  • Roaming or teleworking from the assigned space to roaming or teleworking from unassigned space
  • People having private offices based on position in hierarchy to people having enclosed work space based on job function.
  • Traditional one-for-one space assignment to neighborhoods or zones with fluid boundaries

In making this cultural and working practices shift people tend to concentrate on space planning and work practices and processes. But there is another factor around the cultural change that is worth investigating.

Some research by Professor Halevy of Stanford University, and others, suggests in his article Power Corrupts, Particularly When it Lacks Status that if symbols of status are removed there are consequences in the way power is used (and misused). He and his research team predicted that when people have a role that gives them power but lacks status – and the respect that comes with that status – then it can lead to demeaning behaviors. They tested this prediction and found it to be true – albeit in laboratory rather than a real world situation. Nevertheless it is an interesting finding because if it is generalizable into the world of work there may be the unforeseen consequence of negative behavior change if symbols of status i.e. private offices are removed and there are no replacement status symbols.

I asked whether the research had touched on offices as status symbols and Halevy replied: "We haven't looked at the effects of taking away status symbols on the behavior of power holders, although I suspect that, in the absence of alternative ways to signal status, taking away these status symbols might lead power holders to try to dominate others in their environment to re-establish a clear hierarchy. Thus, devising alternative, less costly ways for people to signal their status might be necessary to avoid these outcomes".

If people either consciously or unconsciously regard 'their own' private office as a status symbol (regardless of whether they say it is an essential for them to work effectively), and have an emotional attachment to this 'entitlement', what are the effects of any drive towards a working environment that has many fewer private offices and encourages people to hot-desk, desk share, 'hotel', and telework? Will power without status corrupt absolutely as the Economist article commenting on Halvey's research suggests.

In my own work I have heard people say that they would like their managers to have offices. I was a little perplexed by this but then read another article, The fluency of social hierarchy: The ease with which hierarchical relationships are seen, remembered, learned, and liked, that suggested "that relationships with more hierarchical organization are easier to see, understand, learn, and remember. This cognitive fluency of hierarchies could be one mechanism through which hierarchies persist and are enjoyed even though people often claim to want to avoid them" – it seems plausible then that private offices signal the comfort of hierarchy.

In fact, Halevy's more recent research in fact shows that power without status, while perhaps not corrupting absolutely, does breed dysfunctional relationship conflict in organizations.

So it would be interesting to do specific power/status research project on the power and status implications of moving from traditional to new ways of working. People in the following situations could be invited to participate in the research:

• Those who currently have private offices and who have not been asked to give them up
• Those who currently have private offices and might be asked to give them up
• Those who have had private offices in the past and have already given them up private offices,

The research may extend to consider other things that might qualify as status symbols such as car parking spaces or 'territory' like their own floor plate for their organization.

The findings from any such study might help with
:

• Mitigating some of the risks around impacting people's feelings about status
• Capturing ways in which employees may self-affirm to compensate for lost status symbols
• Identifying 'compensating' status elements if these are required for effective performance
• Determining whether there is any link between power use and status symbols in an organization that affects for good or ill workplace performance
• Developing a change plan that recognizes the power/status relationship

What's your view – are offices the status symbols of power? Will the exercise of power change for the worse if the status symbols are removed?

Bones, beans, and gold coins

Imagine a look alike Las Vegas casino but in Johannesburg. Now imagine around 70 organization design consultants sitting in there in one of the artificially lit hotel conference rooms working through an eclectic program of presentations, exercises, flag twirling, journey mapping, world café, and other things beloved by 'interventionists'. I was one of the 70 at the New Africa Organization Design Forum Summit there. My task was to talk about the myths of organization design. At points I found myself asking myself 'am I seriously part of this community?' this question perhaps brought on by the ODD sessions. I finally worked out that ODD was an acronym (organization design and development) and not intended to be a descriptor so clearly I was confused there, but maybe not.

The program veered from the sedate, and the 'I've heard this a thousand times before', to the wacky in unpredictable sequence, each session with its own specific language and vocabulary that required a jargon buster (unfortunately not provided). Similarly it veered from participants being seated and listening attentively to a presenter with power points to scrabbling on the floor picking up the bones and beans that John Ballam sowed amongst us in his superb method of shaking us out of our known worlds of 'adaptive systems', 'holistic thinking' 'new paradigms', 'mental models', and so on leading us towards 'shamanism', 'healing', 'energy fields', 'the consistency of the unseen', and 'fractals'. His mix of theatre and chaos theory started with his own chanting, dancing and sowing and finished with all participants doing a short stomp dance with pelvic wiggles. (Odd or not? Form your own views).

The overall theme for the three days (one pre-conference) was to discuss "Aligning Organization Design and Culture to Accelerate Performance and Adaptability in the Three Horizons of Work". In case you're wondering what the 'three horizons of work are' here goes:

I. Hierarchical: Innovations in Core/Mechanistic Design
Typical structure: Hierarchy / Vertical structures
Decision culture: Controlled, authority cascaded from top, directed
Culture of change: Push-Control & Predict,conformity with prescribed culture
Best fit change method: Waterfall, strategic planning,supports status quo,
Design leaders and methods: Galbraith; Star Model, Jacques; Requisite Order, Fredrick Taylor; Mechanistic

II. Participatory: Innovations in Emerging/Humanistic Design
Typical structure: Hierarchy / Cross functional Vertical and Horizontal
Decision culture: Delegated authority from top to select teams, feedback loops influence decisions
Culture of change: Push / Pull-Proactive, engage, transfer knowledge,learning, co-created culture
Best fit change method: Engagement events and initiatives, shifts the status quo and power relations
Design leaders and methods: Axelrod; Conference Model, Emery/Weisberg;Search, Lukensmeyer; AmericaSpeaks, Owens; Open Space

III. Individual Accountability Innovations in Experimental / Organic Design
Typical structure: Flat / Networked, Circles, Fluid, focus on roles not structure
Decision culture: Distributed to all levels based on accountabilities, all make relevant decisions through dialogue
Best fit change method: Pull-Sense & Response to real time stimuli,transparency, emergent culture
Real time & built into operating process, vertical structure fades, focus shifts to results vs. structure
Design leaders and methods: Adaptive Organizations: Winby; Decision Accelerators, Robertson; Holacracy, Ressler; Results Only Work Environments

The bulk of the participants were from South Africa and worked in government, and a goodly proportion of the speakers were North American consultants. With this combination I came away with a mixed bundle of stuff. There were some good questions raised.

One that I found intriguing was 'How does the national culture of South Africa support the organization development work that you are doing?' This led to a discussion on what the South African values are: 'Ubuntu' – I am because we are – was one value that doesn't mesh with the 'what's in it for me?' attitude that I meet in my American work, similarly the South African value of 'walk together and not apart', makes one think collaboration, a value reinforced by viewing the history of apartheid exhibition in the hotel I was staying in (coincidentally the same day that someone emailed me the Malvina Reynolds song, 'It's not nice' ). 'N Boer maak n plan' was another value people mentioned. This one is about dealing pragmatically with things that go wrong. Another was 'lekgotla' which is a forum for discussion and dialogue.

Having also just been in China I wondered about the Chinese values that might contribute to organization design work. Do national cultures mean working differently even in multinational organizations? Why is organization development and design work so North American based? Noble Kumawu, from Ghana, co-author of Global OD: A Model for Africa and the World, and CEO of OCIC International started to address that question.

Taking a view that questioning is the precursor to doing things differently (and hopefully better) I am now pondering national cultures, shamanism, and a whole raft of phrases that caught my attention: "Get rid of the heroes', 'selling an energy field' (not a BP or Shell thing but the psychic energy around organization development), 'find your organizational voice', 'courage is not the absence of fear but the control of it'.

I've added to my already extensive Amazon wish list with Howard Gardner, John D. Caputo, Angeles Arrien, Confessions of an Economic Hitman by John Perkins, and Julian Jaynes, all now on it. I also met up with several people to continue the conversations with. So could I go back to work and 'add value' (the CFO might ask) to my organization having invested the time and money in attending? It's possible but exactly how to measure that is still a question mark. I'm comforting myself that several speakers (and participants) felt that measures and models were old school so I may not go down the track of contortions of proving it to myself or the CFO.

The gold coins? On inspection they proved to be plastic tokens, I think someone must have brought them in from the gaming tables or slot machines. They too were scattered about but on the tables not the floor. I just hope they're not symbolic of organization design or development work that promises a lot and yields little.

Change your business model

I've been thinking about business models this week – what makes it easier or more difficult for companies to change or adjustment their model at regular intervals? Failure to do that has significant consequences as AT & T, a US telecoms company, found out. Originally established in 1885, in 2005 it was bought by SBC for around $16 billion. SBC was one of the 'baby bells' that was spun out of the company, known as 'Ma Bell,' as part of a 1984 court-ordered break-up.

The failure, at the time, of leaders of AT & T to change its business model in order to take advantage of new technologies such as wireless and internet were cited as reasons for the takeover. But they are not alone in this failure as Clayton Christensen, of Harvard Business School, and author of several books on innovation said on hearing that AT & T been bought. 'It is a tragic fall [for AT & T] and I lament the passing, because it was a huge disruptive success in its day. The world is filled with companies that are marvellously innovative from a technical point of view, but completely unable to innovate on a business model.'

As I was working on this I came across a white paper Retrench or Refresh? Do existing business models still deliver the goods.

The authors suggest that generally speaking, companies who are more adept at rethinking their business model have the following attributes:

1. Flexibility: to evolve to business models where a) products and services are able to be paid for on an as needed basis, for example, in the IT world from the software license model to the software as a service model, b) companies can scale up or down without loss of business continuity.

2. Ability to deliver short-term cost savings and/or efficiency gains to customers: to offer customers a greater level of granularity in the way products and services can be bought, for example Ryanair's menu of options compared with British Airway's all-in single price approach.

3. Capacity to drive innovation: to engage with those interested in participation in open-innovation (looking to people outside the organization to come up with new and/or improved product and service ideas)

4. Capability to enter new markets: to look outside their traditional markets and be in a position to offer products and services tailored to customers in these new markets.

5. Collaborative ownership structures: to achieve economies of scale and reduce competitive pressures

6. Use of the digital economy: to help reinvent what the company is capable of offering and how it offers it.

One way of developing the adeptness and attributes required was suggested by Peter Drucker (and I've written about this before). He called it 'Planned Abandonment' saying that the time to abandon a product, service, policy, rule, or other organizational element is much earlier than when it begins to cause problems. As a rule it is time to abandon when any of the three following conditions apply:

1. The product, service, market, process, or whatever still has a few good years of life
2. Its greatest virtue is that it is fully written off. Ask instead 'what is it producing?'
3. An old and declining product, service, market, process, etc is being maintained at the expense of new and growing products, services, markets, processes, etc.

Drucker suggested that the leadership team should regularly ask a series of questions aimed at pinpointing areas for abandonment. This is a good suggestion and one followed by Lenovo (a computer maker). Its team of nine leaders (down from two dozen at one time) are based in six cities and three continents, yet they meet every other month to review the business typically spending three or four days together in a key market, visiting local stores and listening to partners, customers, and employees.

The goal of these review meetings is to align the organization's goals, and take quick action where things are not working well. For example, following a leadership team visit to India, Lenovo restructured its business model there to drive growth in segments like small and medium business (SMB), government and education, which were not getting much attention earlier. The company separated SMB, earlier part of its consumer division, to make it an independent business. It also created different teams to handle its government and education business, as these required a different focus. These decisions were made because although it was the leading PC vendor in the enterprise space in India, success in that arena alone would not help to improve its share in India.

Lenovo, which launched its first personal computer in 1990, has the goal of becoming the first global consumer brand to emerge from China, and its management team is willing and able to change the company's business model as required to meet this goal. For other organizations a barrier to business model change are the skills of the management teams, and/or additionally the sheer complexity of the structures, processes, policies, and working practices that for any long established company have been in place over many years.

In a fascinating blog post, The Collapse of Complex Business Models, Clay Shirky, (writer, consultant, lecturer) discusses the idea that an organization's failure to respond to stress in the environment is not a lack of will it is simply that they cannot. One of the examples he cites is AT & T, mentioned earlier. His suggestion is that the complexities of long established organizations make them unable to change 'In such systems, there is no way to make things a little bit simpler – the whole edifice becomes a huge, interlocking system not readily amenable to change. .. Under a situation of declining marginal returns collapse may be the most appropriate response … Furthermore, even when moderate adjustments could be made, they tend to be resisted, because any simplification discomfits elites.'

What's your view? How easy is it to change a business model? What are your success stories in this?

Organization charts

Too frequently in the case of organizational problems arising the first response is to look to the organization chart i.e. names of jobholders in boxes that show a formal reporting relationship between the jobholders.

When people are trying to decide the 'best' structure for their organization they often forget that work has to flow through it, and that different structures have different attributes. For example, that adaptability is poor in a traditional hierarchy but good in a network. Instead structure decisions are made based on personalities, politics, and expediency. This is a mistake on two counts. First, failing to explicitly recognize that structure choices impact organizational capabilities, and second that getting work done efficiently in order to meet organizational goals is, or should be, the purpose of the organizing frameworks and structures.

On the first point – that structure choices impact organizational capabilities – Conway's law says the technical architecture of a computer system reflects the bureaucratic structure of the organization that produced it. Think about Microsoft as an example. It has the Windows Group, the Office Group and the XBox group, and their systems are isolated from each other. Although at one stage Office and Windows were 'joined at the hip', trust-busters made Microsoft erect a Chinese wall between the two organizations, so their architectures had to bifurcate.

On the second point – that getting work done efficiently in order to meet organizational goals is, or should be, the purpose of the organizing frameworks and structures – organization charts offer almost no insight into how work is done. Work occurs in what is commonly called the "white space" in the chart – and can be mapped by organizational network analysis, and social network analysis. In most cases the organizational network analysis chart showing how work is getting done via information flows and collaboration bears very little relationship to the formal organization chart.

The possibilities that technology now offer for charting the way work actually gets done in organizations and the advent of new business models raise the question about the future of the traditional organization chart. Are they of any real value? Three different but common scenarios make it a question worth thinking about.

Take the way work gets done. In many organizations employees play multiple roles, for example, working on project teams, (perhaps more than one at a time), contributing expertise and skills in a variety of forums, and they often work for more than one boss. In these cases, and even using dotted lines, it is not so easy to allocate them to a slot in an organization chart.

Now consider the business model of a new organization. LiveOps, established in 2000, deploys cloud computing to virtualize their business services. It is a cloud-based call centre service that manages a network of more than 20,000 independent at-home agents. Companies use the service on a pay-as-you-go model, either as a fully outsourced call center or to augment their own. The technology enables an on-demand, scalable service to subscribers. The relationship of the stakeholders – LiveOps, the independent agents, and the companies buying the services of the agents via Live Ops is not easily depicted in a standard chart. Nevertheless the three parties together form an organization that delivers a service to a customer.

In other organizations fully employed members of staff work side by side with contractors, consultants, and temporary workers. It is difficult to argue this type of staff augmentation is not part of effective organizational functioning and success (why pay for their services if not to contribute?) yet these people do not appear on a standard organization chart.

In all three instances – and others like them – organization chart development and maintenance could well be a redundancy that is better not introduced in the first instance, or if it is already established should be reviewed for its value. Is it enough to spend time, effort, and money to produce and maintain something that shows in broad terms the level of formal authority of various positions, their numbers, and their presumed reporting relationships?

Sun Hydraulics is an example of an organization, established in 1970 and profitable from the start, which decided not to have an organization chart. Its website explains:

Our workplace is as distinctive as our products, and provides just as many advantages. We have no job titles, no hierarchy, no formal job descriptions, organizational charts or departments. We have open offices, promoting open communication. This environment encourages innovation and helps develop a spirit of entrepreneurship throughout the organization. The result is a workforce inspired to satisfy every customer, no matter the challenge.

W. L. Gore, also very financially successful, takes the same approach

Gore has been a team-based, flat lattice organization that fosters personal initiative. There are no traditional organizational charts, no chains of command, nor predetermined channels of communication.

If the decision is made that it is of value to spend time, effort, and money to produce and maintain something that shows in broad terms the level of formal authority of various positions, their numbers, and their presumed reporting relationships then the start point is to determine the work flow, the activities, and the work volume that needs to be done to deliver the business strategy from this the number of people and their grade levels can be gauged.

Are organization charts as we know of any organizational value? What's your view?

(Thanks to Michael Stanford for contributions to this content)

Organizational structures and forms and how work gets done

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.