1 Organizational Design & Development January 31, 2012 MGMT-4000 Linda Miklas Harvard University

Center for Workplace Development Creating the Environment Trust earned one person at a time Accountability for the right results Opportunity for Growth & Impact

Center for Workplace Development Three Types of Trust  Competence – “Trust of Capability”  Contractual – “Trust of Character”  Communication – “Trust of Disclosure”

Iceberg Model What How

Iceberg Model Skills Knowledge HayGroup= Achievement Power Affiliation Butler = Passion Connection Achievement Power A Powerful New Model = Acquire Bond Comprehend Defend Inner Work Life = Creativity Productivity Commitment Collegiality

Clarity - Communication - Rigor Modeling Decision- Making Developing Talent Achieving Results

7 Understanding Design Are business units:  Structured around a clear and demonstrable value proposition?  Responsible, with authority, for developing and executing key components of strategy?  Authorized to make decisions affecting strategy?  In control of resources required to execute strategy?  Accountable for revenue, funding, profitability? Source: 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”

8 Structural Imperatives Source: Reframing Organizations: Artistry, Choice, and Leadership. Bolman, Lee G. and Deal, Terrence E., 2008, Jossey-Bass. Dimension Structural Implications Size and age Complexity and formality increase with size and age. Core process Core processes or technologies must align with structure. Environment Stable environment reward simpler structure. Strategy and goals Variation in clarity and consistency of goals requires appropriate structural adaptations. Information technology Information technology permits flatter, more flexible, and more decentralized structures. Nature of the workforce More educated and professional workers need and want greater autonomy and discretion.

9 Organization Design Characteristics (Boston Consulting Group) Interactions Hybrid Structures and Overlays Performance Rewards Open- Source Approaches Lean Corporate Center Change Readiness Design should facilitate people working together Interactions should occur across org boundaries. Design should reflect different business drivers across org:  differences in span of control  processes that can improve management practices Design should include performance measurement mechanisms and programs to reward performance; variable incentives. Design can integrate with customers and suppliers. Design should include a center that disseminates best practices, drives change initiatives. Design should institutionalize capacity to flex and respond to environmental changes. Source: 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”

10 Galbraith’s Star Model Processes People Rewards Structure Strategy Source: 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”

11 Five Basic Structure Options Functional GM R & DOperationsMarketing Product CEO Electronics Medical Instruments Computers Market GM Health ServiceFin. ServicesDistribution Geographical GM Northern Region Central Region Southern Region Source: 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design” Process GM New Product Dev. Order Fulfillment Customer Acquisition

12 Strategies for Five Structure Options Source: 2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”

13 References  2009 Corporate Executive Board, Corporate Leadership Council’s “Frameworks for Organizational Design”; CLC  A Survivor’s Guide to Organization Redesign, Boston Consulting Group, design_Jan2003.pdf design_Jan2003.pdf design_Jan2003.pdf  The Balanced Scorecard. Kaplan, Robert S. and Norton, David P.,  Designing Your Organization: Using the STAR Model to Solve Five Critical Design Challenges. Kates, Amy and Galbraith, Jay.  Do You Have a Well-Designed Organization? (Goold and Campbell’s Fit and Good Design Tests), Harvard Business Review,  Organizing for Agility: Creating Natural Business Units, Booz Allen Hamilton,  Reframing Organizations: Artistry, Choice, and Leadership. Bolman, Lee G. and Deal, Terrence E., 2008, Jossey-Bass.  Trust and Betrayal in the Workplace: Building Effective Relationships in Your Organization. Reina, Dennis S. and Michelle G., 2006, Berrett-Koehler Publishers.