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The Political Test of a Proposed New Organizational Model

 A few years go, I was assisting a firm in developing a new organizational model, working together with a colleague.

We first identified key design criteria, based on interviews with more than 40 managers.

The most important criterion was to design an organization that would help the firm achieve growth for one of the key products. It was also important to find a model with the right “balance” between different business areas.

At the same time, there was a need to simplify the structure, and reduce the number of management layers.

We then started developing a couple of alternative models.

It was pretty hard work, trying to identify a model that would meet the different criteria, while avoiding an increase in costs. But one evening, in a meeting with the VP of Human Resources, we thought we had found at least one possible solution.

We went through the criteria and could check off one after another. We concluded the meeting on an optimistic note.

But as we were about to leave, the VP remarked:

That question re-framed the discussion. Suddenly we were not talking about what you could call the “rational” criteria, but about the impact on individuals and whether the proposed model would get the support of a large enough coalition to be accepted (and once accepted, whether it would be implemented with some level of enthusiasm).

So we looked at the model, and considered the potential impact for each of those who currently held leadership position (and who would be candidates for key positions in the new model).

A simple count suggested that the balance would be negative: A lot fewer would move up than down in the management hierarchy.

So we went back to the drawing board. And in the end, we did produce three alternative models that were more attractive, both from the “rational”, and from the political side. One of the proposed models was then selected by the CEO. The subsequent implementation of the model went quicker than we had anticipated.

* * *

One word of caution here: I am not suggesting that you should “start with the people” in the sense that you should tailor the design to the personal interests of the current members of the management team.

The main design criteria should be derived from the strategy of the firm (see my book for a detailed description of a methodology you can use for this purpose). 

The political test is an additional step that you carry out, once you have a potential solution that fulfills the main requirements, and satisfies the key design criteria.

But it’s a step that you shouldn’t skip– if you want your proposed model to be implemented.

sustainability org design

Sustainability and Organization Design: Is there a Connection?

I have written more than 100 blogposts, covering a wide range of topics related to organization design.

But so far, I have not tackled the issue of sustainability.

I have hesitated, I must admit, because so far, I haven’t seen anything new.

Of course, to implement a sustainability strategy, a firm will have to make organizational changes, including structural ones.

The changes are often difficult to implement (see this and this article). 

But the repertoire of management techniques is a familiar one, and consists in such things as setting goals, defining responsibilities, and aligning the incentives with the goals.

 The things you would do to get any strategy implemented.

 But there might indeed be something unique about sustainability as a challenge.  

 I was reminded of this recently while reading the book “Mission capitalism”, written by Mariana Mazzucato, professor in economics at University College London.

 Mazzucato is characterized as “left-wing” by some commentators but I think most of her proposals will be viewed as sensible to people across the political spectrum.    

 Her first point is that to tackle climate change and other sustainability problems, we can learn from how grand challenges have been tackled before.

 So in the book, she describes how Preseident Kennendey established the mission to put a man on the moon.

 She explains in some detail how NASA handled this challenge from a leadership and organizational point of view.

 And this is where it gets interesting.

 It was not enough to create technological innovations: NASA had to radically re-design its organization as well.  

 Among other things, NASA had to ensure sufficient coordination across different units and sufficient communication across vertical layers, as well as effective collaboration with suppliers.

 This had to be done in a system of 300.000 people. 

 The organization was re-designed into program offices and centers. Centralized planning was combined with decentralized project execution. Many innovations in engineering management were also introduced.

 I was curious to find this definition of systems management, provided by George Mueller (the then head of the office of Manned Space Flight):

It is almost as if he describes the concept of an organizational digital twin, 60 years before the term was coined. 

(By the way, also in more modern times, NASA’s organization has been examined by researchers, e.g., see this study). 

But back to my earlier point: What Mariana Mazzucato is saying is that organizational innovation is critical to handle grand challenges.    

In particular, she argues that governmental agencies need to pursue bolder and riskier goals, and create more dynamic internal structures to implement them. 

A second point she makes, which is also related to organization design, has to do with the use of missions-oriented management. Here, she is not so much thinking of missions as “organizational purpose” (as we do in our field), but as the big goals that must be accomplished to handle a particular challenge (say, a plastic-free ocean).   

The key principle is to define the missions so that the outcome is clear, while allowing different types of solutions. As she writes in an article (Mazzucato, 2018, p. 811):

Although Mazzucato is mainly concerned with how the government can practice such mission-oriented policies at a macro level, her example from NASA also shows that this is relevant at a more micro level.

 For example, a key element of the Apollo program was to specify the goals but allow internal units (as well as suppliers) to come up with the solutions.

 We can ask ourselves how such a model can be implemented within an organization. 

 As an example, if “A plastic-free ocean” is defined as a key mission at the societal level, then it seems clear that this macro-level mission must be broken down into company and even product-specific missions, for example, “Plastics free packaging for our consumer products”.

 And as with a mission at the societal level, we of course need to break it down into more specific requirements – and ensure that we have the organization in place to realize it.  

 Image by Freepik