I'm repeatedly asked where should Organisation Design sit as an organisational function? The question means where, functionally, should the skills and attributes of OD report. It's a question I tackle in my – about to be revised – book Organisation Design: Engaging with Change. In it (2014), I said:
Although 'organization design' is often seen as vested in HR, and certainly required as an HR competence – it figures on the CIPDs HR Profession Map a new design is typically initiated and driven by the business. HR, with its focus being primarily on the workforce, is only one of the parties that enable new organization design success. Other support service areas, among them IT, finance, facilities, and communications are also typically tagged as enablers of new design success, and often work alongside the business and HR in planning and implementing a (re)design piece of work. …
Where, then, should the 'point' people with internal expertise to do the detailed technical work required to design and then keep an organization well designed be situated in an organization? Are they best placed as part of an HR function, part of a strategy department, as an independent unit reporting to a COO or CEO, or somewhere else?
The current predominant view seems to be that organization design skills are part of an HR function's services to clients and thus sit in HR.
A view gaining ground, however, assumes that organisation design:
- Is integral to delivering the business strategy
- Is needed for developing the capability of the whole system
- Demands collaborative working on the design from a multi-disciplinary team having expertise including the integration and alignment of IT systems, work process improvement, and business analytics
- Should be practiced by engaging and involving internal and external stakeholders through humanistic values. (See my blog on these)
- Is more than an 'peopley' organisation chart and should be evaluated and measured quantitatively and qualitatively to assess value-add to the business
and places the OD function an independent, objective multi-disciplinary expert unit working with line managers and leaders who are also skilled and capable in organisation design.
Many organisations are heading down this route and are developing 'design thinking' capability. This is not vested in HR but in 'the business'. There are countless articles targeted at line managers and leaders that discuss this. See, for example, McKinsey's Applying design thinking across the business: An interview with Citrix's Catherine Courage or Design Thinking Comes of Age in a recent Harvard Business Review.
More of a 'how to' is Strategy+Business's 10 Principles of Organization Design aimed at business leaders/managers. Some of the 10 principles are more useful than others: 'Focus on what you can control', for example, is likely to give a false sense of security. I'd rather see a discussion around 'focus on what you can't control', which would enable discussion of unintended consequences and designing for ambiguity, involving designs that allowed for ongoing horizon-scanning and sense-making.
Similarly, the principle, 'for every company, there is an optimal pattern of hierarchical relationship' is a statement that organisation designers argue about. Read Elliott Jaques Levels With You which opens, 'The controversial Canadian theorist claims he can create the perfect organization. Has he found the key to management -— or merely a justification for bureaucracy?'
The Strategy+Business, 10 Principles, article concludes with the statement 'Remaking your organization to align with your strategy is a project that only the top executive of a company, division, or enterprise can lead'.
So is it time to take organisation design out of HR? Let me know.