When I was an HRD, I don’t think I ever really understood what organisational design (OD) was. Of course I knew it was about organisations, structures, development etc, but it was never really clear or tangible to me. It seemed so specialist that I was probably a bit intimidated by it, and frankly speaking, I never really knew if I needed it. My haze was probably compounded by the wealth of definitions out there, which somehow made it feel even further out of reach.
Fast forward a few years and now I love OD, spending most of my time analysing it, planning it, and implementing it. I’ve realised it’s not out of reach, it’s right there in front of most of us in organisations. I’ve understood that it’s not a one-off activity or initiative, it’s about sustainable change and growth. And most importantly, I’ve truly got to grips with the fact that it’s fundamentally about performance and execution of business strategy.
What is OD?
Definitions don’t really matter, as we can sometimes get caught up in semantics, but in a bid to break it down into manageable chunks, at Third Approach we consider that OD is three overlapping and integrated strands: Structure, Culture and Capabilities. All are underpinned by the human aspects of Change Management (e.g. aligning people to purpose of change), and absolutely key is to have the Business Strategy as the North Star.
Taking these three strands, structure is all about how you are organised as a business. It looks to shape, size, depth, breadth as if it were a 3D (or even 4D) printed CAD drawing. Traditionally this element of OD might have been quite linear, uncreative and involved lots of boxes and hierarchy, but the more recent understanding of shaping a business removes barriers, frees up talent, and looks to enable people and processes combined, to help the business perform.
Culture is a about articulating the vision of behaviours, and how the organisation wants to ‘be’. It’s active and intentional, and has to be built if it’s to enable the business perform. Most frequently organisations will want a shift in culture, rather than a wholesale change, which could relate to high performance behaviours and teams, motivations, or aligning around the purpose and belief of the organisation. Regardless of requirement, culture is not fluffy, it’s focused and far-reaching, and will often be the reason why a business succeeds in its strategy, or otherwise.
The third strand is capabilities. In short this about having the right people with the right skills and behaviours, with the right tools, at the right time; all required to meet the business strategy. In OD terms, capabilities are seen on a multitude of levels. We tend to look to individual skills, but organisational capabilities are what will often move the dial and enable the business to achieve. A layer by layer approach to managing capabilities seeks to understand what is needed organisationally, divisionally and locally as well as individually.
It’s essential these three strands overlap and no one has been delved in too deeply without consideration for the others. Really they are intertwined threads, though it’s typical an organisation will want to place heavier emphasis on one aspect, depending on their symptoms and need. But to change one, without understanding the impact on the other, is fruitless. Like a spider’s web, touch one part, and the other parts will feel an impact (good or bad).
So there it is. It really isn’t that complex or intimidating, it’s just three intertwined strands; Structure, Culture and Capabilities, wrapped up in the human aspects of change management, and with business strategy at the centre. It’s active, intentional and uses various methodologies all get each aspect right for the specific organisational need and intent.
But then to think about the ‘Why’
Why would my organisation need to spend time and energy diving into OD? The answer to this is also quite straightforward, it allows you to create an agile, fit-for-purpose, aligned and performing organisation, that’s maximising potential and that looks forward, continuously. An organisation that is ready for changing market requirements, shifting strategic direction, new products, or changing workforce expectations. It allows you to keep what’s good, change what you choose to, and to remain relevant to consumers and the employment market. To be ready for whatever happens in the future.
It’s not a one-off event, it’s a range of activities that become part of the fabric of your organisation.
We’ve looked at the ‘What’ of OD, and a little of the ‘Why’. In another blog we’ll look at the ‘How’ and what implementation could include. Implementation is also not complex, but does require careful consideration, planning and a big chunk of determination, and is frequently underestimated when planning an OD project.
Keep thinking of OD as your organisation ebbs and flows, and let us know if you’d like to discuss any of your emerging organisational needs; we’d be very happy to help.