The tenth test of organisation design

The Nine Tests of Organisation Design, developed in 2002 by Michael Goold and Andrew Campbell of Ashridge Strategic Management Centre (as it was known then) is well known in organisation design circles.

In their article introducing the tests they describe them as ‘Less an intellectual triumph than a practical checklist for addressing the most important issues, our framework is grounded on some basic principles. The first and most important, the fit principle, embraces four drivers of fit – product-market strategies, corporate strategies, people and constraints. The other good design principles are the specialisation principle, the co-ordination principle, the knowledge and competence principle, the control and commitment principle, and the innovation and adaptation principle.’

And in their HBR article on the tests they say, ‘This set of tests helps you establish the right amount of hierarchy, control, and process—enough for the design to work smoothly but not so much as to dampen initiative, flexibility, and networking.’

I find the tests useful in my work and always present them in my organisation design training programmes. Earlier this year, I was working with a group and who had some questions around them – related to new technologies/approaches e.g. AI, blockchain, agile, cyber security. They wanted to know if the 9 tests were going to be updated.  I asked Andrew for his views, and he responded,

‘These technologies are no more significant or organisationally influential than the steam engine, the plough, the telephone or the computer. Yes, they have an impact, but one can use the same logic for dealing with them as for any technology.

Agile is a bit different because it is a form of matrix organisation (multifunctional skills, each with their own home functions working as a single team with lots of self-management and lots of “ways of working”). So agile is one of the matrix options: others being the two-boss matrix, the project matrix, the front back closed structure, the front back open structure, etc. Like all matrix structures it is a way of balancing “specialist cultures”, “difficult links” and “accountability”, with agile being a little more “flexible” than most other matrix solutions and a little less likely to create “redundant hierarchy’.

He went on to say, ‘This is not to say that I consider the nine tests as a finished tool. I am always looking for additional tests and better ways of expressing the existing tests. In a McKinsey version of the nine tests, they had a Cost Test: Is the design affordable and cost competitive?’

In support of Andrew’s desire to improve the tests, the handout he uses for teaching today, involves quite a bit of language change from the original, designed to make the tests relevant at any level in the organisation from a low level team to a multi-business organisation.

However, this week I’ve been pondering an additional test – the equality test. It’s front of mind because equality came up many times during my week, starting with a discussion with a lawyer colleague on the UK’s Equality Act 2010 which ‘legally protects people from discrimination in the workplace and in wider society’.

A key measure in the Act – the public sector Equality Duty – ensures that all public bodies play their part in making society fairer by tackling discrimination and providing equality of opportunity for all i.e. considering all individuals when carrying out their day-to-day work – in shaping policy, in delivering services and in relation to their own employees.

Specifically requiring:

  • eliminating discrimination, harassment, victimisation and any other conduct that is prohibited by or under this Act;
  • advancing equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it;
  • fostering good relations between persons who share a relevant protected characteristic and persons who do not share it.

Although the Equality Duty applies only to public sector bodies, the Act also states that ‘A person who is not a public authority but who exercises public functions must, in the exercise of those functions, have due regard to these matters.

The concepts inherent in the Equality Act seems to be gaining ground in other forums. A bit later in the week I was reminded of the meeting, in August 2019, of the US Business Roundtable when ‘Breaking with decades of long-held corporate orthodoxy, the Business Roundtable (comprising nearly 200 chief executives, including the leaders of Apple, Pepsi and Walmart) issued a statement on “the purpose of a corporation,” arguing that companies should no longer advance only the interests of shareholders. Instead, the group said, they must also invest in their employees, protect the environment and deal fairly and ethically with their suppliers.’

The New York Times commenting on this says, ‘The shift comes at a moment of increasing distress in corporate America, as big companies face mounting global discontent over income inequality, harmful products and poor working conditions.’

The NY Times reminder was followed by several other equality prods. I read in this week’s Economist’s the story that ‘Virtual reality continues to make people sick, And women more so than men’– the point being that ‘tech design bias needs fixing’.

I also read about Julian Richer, transferring 60% of his shares, in Richer Sounds, into a trust that passes the baton of ownership to the chain’s 531 employees.

And I discussed with colleagues facial recognition and cv scanning bias. We already know, as MIT researchers say, that ‘Bias can creep in at many stages of the deep-learning process, and the standard practices in computer science aren’t designed to detect it. … [AI] technologies affect people’s lives: how they can perpetuate injustice in hiring, retail, and security and may already be doing so in the criminal legal system.

Organisation designers are not immune from bias, and I wonder how much we think about our equality or equality duty (irrespective of sector) in our design work, and whether if we did, it would be a contributory factor to a well-designed organisation. When I was thinking on this, I remembered that years ago my daughter (a public sector worker) sent me a note about the three equals:

Equal treatment– e.g. a rich white man should not be given quicker access to treatment than a poor woman. This follows the principle of respect for persons.

Equal opportunity-the removal of disadvantage in competition with others e.g. a translator might be arranged for a Bengali speaker so that she can have the same opportunity as an English speaking service user to explain needs and receive information. This may require additional resources, positive action, or changes in government policy.

Equality of result– disadvantages are removed altogether- e.g. to provide care for old people in a residential home is expensive. to give the same outcome for a poor person who can’t afford to pay and a rich person who can, social services might pay for the poor person, or the state might provide free high-quality care for all to avoid stigmatization. This may require structural changes in society-challenging certain people’s rights to wealth, property and power.

I know that there are economists, philosophers, other discipline experts in the field of equality, fairness, social justice, and so on. I am not one of those. However, I wonder whether these three equals, or something like them, would form a good basis for devising an equality test for organisation design work.

Should organisation designers be interested in equality? Do we need an equality test? Let me know.

Image: A group of artist, Freddy Tsimba’s, statues made from spoons. He says he finds his inspiration in the suffering experienced by many communities in his country – DRC. Copyright: Pascal Maitre/Panos Pictures