Continuous organisation design


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 the opening section of Chapter 5, “Continuous organisation design.” Next week will be a discussion of this chapter.

Chapter 5

Evolution … starts from an existing design and alters it progressively by a series of small changes over many generations … every stage in the evolutionary sequence must be capable of holding its own in a competitive world. R. McNeil Alexander, Bones

Deliberate organisation designing takes two forms, project and continuous.  Project design, discussed in Chapter 4, is usually undertaken to deliver a specified outcome by a given date.  Continuous design is an ongoing activity driven by having to respond to current or potential internal and external context changes.  In that sense, as principle 5 discussed in chapter 1 states, it is a fundamental continuing business process, not a one-off repair job. 

Adoption of the principle means establishing a business process that delivers continues design and redesign.  Effective organisations develop and hone continuous design capability alongside their project-based design capability.

Failure to adopt the principle does not stop the organisation design changing.  It does so regardless of any intentional design interventions.  An organisation is constantly changing and evolving as the internal and external context changes.  For example, over the past few years employees have set up colleague WhatsApp groups, which are outside the control, and perhaps awareness, of the employer. 

This is part of a wider shift as employees increasingly use their personal smartphones in the office, and/or access social media and messaging platforms via their workplace IT systems. This raises risks and issues for employers. Some that have cropped up are bullying and harassment, use of privileged information, inappropriate comments, exclusion from a colleague group, rights to privacy, and out of business hours use for business purposes – leading to stress and, in the UK breach of the Working Time Regulations 1998. [1]  

The rise of social messaging platforms and the mixed personal/business use of them by employees has design consequences, including changing networks of interaction and influence, changing behaviours and changing knowledge and information flows.

Unless this more or less spontaneous change is noted and an intentional response to it activated, the organisation may well suffer the consequences of inattention.  Intentional and continuous design enables an organisation to evolve advantageously over time. 

In continuous design, designers look for clues and evidence that the design is delivering intended performance outcomes, that potential opportunities, disruptions and risks are on the radar and that the organisation is has the capability to adapt beneficially to meet changing circumstances. 

Netflix is an example of an organisation well versed in continuous design.  They have been practicing for more than two decades, reinventing the organisation from DVDs by mail to streaming and most recently from licensing shows and films to creating them.[2]  Since going public in 2002 the firm’s share price has risen 500-fold and in 2020 Michael Nathanson of MoffattNathanson, a consultancy, observed ‘every time that Netflix faced a roadblock it found a clever way to work around it and emerge stronger.’[3]

Whether Netflix can maintain the ability to continuously redesign and evolve as its operating context changes remains to be seen.  It faces three pressures – two internal and one external.   The first internal one relates to the speed of growth – by 2020 the organisation had grown globally four-fold in five years.  Assimilating a global workforce into what is, essentially, a Silicon Valley culture typified by a flat hierarchy, autonomous teams and local decision making presents a challenge. 

The second internal pressure relates to ‘sectoral girth’, moving beyond streaming into film making, where Netflix is competing with Disney among others, may mean having to expand into new industries.  Disney, for example has theme parks, merchandising and TV networks.   

The external pressure comes from the public, increasingly pushing for inclusion and diversity across society – witness the rise of the #BlackLivesMatter, and #MeToo movements.  In 2019 comedian Mo’Nique brought a case against Netflix for ‘a discriminatory low-ball offer [made to her in 2017 for a stand-up special] in comparison to her colleagues, particularly those who are white and male.’[4]  In July 2020 a federal judge denied Netflix’s motion to dismiss her race and gender discrimination lawsuit allowing it to go forward.

In 2018 Netflix appointed Verna Myers, their first VP of Inclusion Strategy. Whether or not this is related to the then impending court case is unknown.  The noteworthy point is that a discrimination case and a new inclusion VP occurred at much the same time. Societal pressures against discrimination had reached a tipping point.  In this specific case, it may be that Netflix was alert to discrimination risks they faced with the societal mood shifting and took action on that assumption, or it may be that they reacted to news of the forthcoming case by making the appointment.

Either way, their first Inclusion Report, published in January 2021 was ambitious in its reach, recognising that the process of continuous design for diversity ‘is not about perfection – it’s about humility, vulnerability and unlearning as much as it is learning.’  This extends not just to Netflix’s workforce but also to the products and services they offer.  Part of their ambition is to continue to influence which stories get told and by whom.  Myers notes some examples of doing this, saying, ‘We’re uplifting stories about Black British lives. We’re chronicling the life of a gay man with cerebral palsy on TV, a first. We’re moving some of our cash into Black banks’ and by doing this Netflix is helping change societal attitudes to inclusion and diversity.[5]

The Netflix evolution illustrates both the need for, and the power of, continuous design and also some of the potential challenges to it – in terms of being prepared for potential context changes.  As the Netflix case illustrates, the pressures for organisations in general to continuously design come from both internal and external sources.

Reflective question: What is the value of intentional continuous organisation design?

This chapter continues by discussing three critical skills needed for continuous OD – signal detection, pattern recognition and meaning-making.  It moves on to consider where to focus the skills and concludes by describing what a continuous design business process looks like. 

Image: Tyler Foust continuous line drawing.