Continuing the alternate week pattern of posting chapter extracts from the forthcoming third edition of my book “Guide to Organisation Design,” this week’s extract is from Chapter 4, “Project-based organisation design.” Next week will be a discussion of this chapter.
Extract from Chapter 4
Designs that effectively deliver desired business results do not just happen. They are the outcome of deliberate attention involving:
- Assessing the context, problems and opportunities confronting the organisation and its need for a design change.
- Being clear about the current and proposed design purpose and desired outcomes.
- Getting support for any OD work so that the design process runs smoothly (as far as is possible).
- Tracking the progress of design activity against appropriate measures that enable corrective action to be taken if there are signs of it not achieving the intended outcomes.
- Staying alert to clues, anecdotes and chat about the organisation’s design and its effectiveness.
- Bearing in mind the constant organisational flux and change – which is running simultaneously with any planned design change, for example, a merger or an Initial Public Offering (IPO).
Deliberate organisation design (OD) takes two forms, project and continuous, as the information in the John Lewis Partnership (a brand of high-end department stores operating throughout Great Britain) 2018 Annual Report illustrates. During that year the organisation saw a greater level of internal change than at any time in over a decade contending with what it described as Brexit-fuelled inflation, the extra costs of investing in IT, and having to cut prices because of widespread discounting by competitor retailers. These market and context conditions led to a profits slump and workforce redundancies. However, along-side these ongoing challenges requiring a range of OD responses, John Lewis Partnership continued with shop investment plans, completing 127 projects of varying scale in Waitrose shops and 91 projects in John Lewis shops.
Project design is usually undertaken to deliver a specified outcome by a given date. For example, the 31st December 2020 was a significant date for UK and EU businesses as it marked the end of the transition Brexit period (when the UK left the EU). From that date UK businesses had to be ready to follow new rules on exports, imports, tariffs, data and hiring.
The Confederation for British Industry (CBI) surveying member organisations in 2018, in the lead up to Brexit, found that the majority of businesses were treating it as a major and significant formal project, with the related governance to oversee their design-for-exit planning and management of preparations.
Project-based OD uses project management approaches, protocols and conventions as provided by, for example, the Project Management Institute. Continuous OD is less project based and more iterative and emergent. This chapter discusses project based OD and Chapter 5 discusses continuous OD.
In practice, most large organisations are doing project organisation design and continuous organisation design simultaneously, and as the 2020 pandemic has shown, the need for having the organisational capabilities to do both effectively is critical.
As an example, Just Eat Takeaway.com was formed in February 2020 a merger of Just Eat and Takeaway.com, Just Eat was launched in Copenhagen in 2001. Takeaway.com was founded in Holland in 2000 by Jitse Groen, now chief executive of the new company.
In June 2020 Just Eat Takeaway announced an agreement to acquire Grubhub. At the time of writing, the close date of the deal (agreed by Just Eat Takeaway shareholders) is not yet known, but expected to be in the first half 2021, pending approval from regulators and Grubhub shareholders. This acquisition will create the world’s largest online food delivery company outside of China. This acquisition requires rigorous project management capability to ensure the acquisition is finalised effectively on the agreed date.
At the same time as initiating this acquisition, Just Eat Takeaway saw its revenue jump 44 per cent in the first half of 2020 as consumers ordered food at home while restaurants closed during lockdown.
CEO, Jitse Groen talks about the continuous design needed to respond to changes. in consumer ordering patterns. For example, during the early summer of 2020 Just Eat Takeaway reported a sharp rise in demand for breakfast and lunch as consumers adjusted to being in lockdown, while the hot weather boosted orders of Greek, Turkish and Thai food as well as ice cream. Vegetarian and vegan options also increased, requiring delivery changes, signing up new vendors and so on.
Additionally, reacting to ‘winds of change’ about the gig economy the UK part of the organisation announced a move away from a free-lance model of delivery to an employed model. Andrew Kenny, EVP, Managing Director UK, said: “In the UK, the incumbent model is primarily a contractor model. For us this makes couriers an integral part of our offering. It is a big step forward.” 
These responses to increased and different consumer ordering patterns, and society’s feelings about the gig economy are examples of the type of ongoing pressures and opportunities that effective organisations respond to by developing and using a well-honed continuous design capability alongside their project based design capability.
Reflective questions: How necessary is it for large organisations to have both project management and continuous design capability? Why/why not?
Being able to keep an OD project to budget and schedule depends on many factors, including the business purpose and stability of strategy, the operating model, the scope and scale of the design, the number of third parties involved, e.g. platform providers, the amount and type of continuous OD going on, and the planning and implementation techniques used. Thus, a merger with a specific close of deal date may get to the point necessary to close the deal on time, and yet have a further phase of the project (or start a new project) to see through the detailed integration.
Whatever type of end-date project, there is a consistent sequence of activity and a number of identifiable phases to it. The number of phases may vary. Figure 4.1, [not shown in this blog] for example, shows three phases for an M & A project, while the waterfall and design thinking methods discussed in Chapter 2 both have five high-level phases, and the agile approach has four.
The phasing suggested for OD projects is a 6 phase one shown in Figure 4.2. [see accompanying graphic]. This phasing recognises that OD projects often begin with an OD consultant being invited to come and discusses an organisational issue or opportunity that a leader or leadership team feels may need a new design or a redesign. Hence the first phase is entry and contracting, that is meeting with the person commissioning the project and agreeing the contract for the work.
 When adopting platform business models the operating model and the organisation running it are by definition beyond the boundary of the legal entity running the platform. All the internal/external, inside-out/outside-in, control/influence discussion is being challenged by this development.