Organizational Design as a Competitive Advantage

Organizational Design is the conscious and deliberate process of configuring and aligning a firm's structure, processes, systems, and people practices to create an effective organization capable of achieving the business strategy.

The term "organizational design" is often used synonymously and mistakenly to mean "organizational structure". From the definition above, clearly organizational design entails more than moving boxes and people around an org chart.

A well-designed (or well-tuned) organization fosters a culture in which individual and collective behavior is shaped, developed, rewarded, and enforced (as necessary) through consistent management and leadership practices, processes, and systems working in unison to get everyone on the same page about what each person needs to do to drive results for the company.

People working in an aligned organization:

1. Deal better with ambiguity and fear of the unknown about the marketplace
2. Can hold the tension of the opposites - place their attention simultaneously on implementing what needs to get done today while creatively planning new strategies, products, or services for the future
3. Quickly re-configure their divisions, products, services, and teams to adapt to rapid change - reinventing or adapting to changing conditions without major upheaval, disjointed efforts, and unnecessary chaos
4. Maximize effectiveness, efficiency, results, and profits.

You may ask - if "Organizational Design" promises all of these things - why have I not heard of it, or why are we not doing it? Maybe your organization hasn't needed to up until now.

Through the example of the current financial and housing crisis, we're just beginning to discover (actually, we're just beginning to take seriously for the first time) the interwoven connectedness of systems and organizations - and the power of behavior on them. You could say that those systems and organizations were aligned - unconsciously.

Designing an aligned organization requires a holistic versus a piecemeal approach. It requires expertise in aligning the various operations and functions that run through an organization married with an equal level of expertise in the psychodynamics of people - an unusual combination.

Companies that learn how to consciously and systemically design all aspects of their firms - shaping behavior in support of the vision and mission - will not only survive the economic debacle, their organizations will become their competitive advantage.

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