Design & Performance
The purpose of organisation design is to achieve integrity (wholeness) and productivity. A company’s philosophy, business model and strategy are the convergent framework upon which the company is designed. Design is a concept of structure and function: so that people, processes and resources or assets operate together to create a capable whole that harmoniously pursues and achieves the company’s purpose, objectives and goals.
Integrity of organisation design means the parts are arranged and function as a whole, harmoniously and productively towards common goals: this is about coherent structure (logical fit of the parts) that enables congruent function (efficient and effective flow of matter, energy and information between the parts). The part are sub-systems comprising people, processes, tangible and intangible resources or assets. Organisation integrity means that all the parts belong in and contribute to the whole, with the consequence that the behaviour of the whole is the product of congruent interactions of all the parts – more than the sum of the parts.
The aesthetic challenge of management is to ensure the harmony of the interactions of the parts (absence of conflict and other barriers), which efficiently & effectively co-produce outputs that contribute to the pursuit of the purpose and achievement of the goals of the whole. Ultimately, the whole pursues a purpose so that contributes value to the containing system (i.e. society).
Integrity of organisation design means the parts are arranged and function harmoniously and productively towards common goals
Integrity of individual people is about ethics. It means that individuals honour their words by achieving agreed goals, which are in line with their capability, the circumstances, and the needs of the organisation. The ethics of the system (company) reflect the effective ethics of all its people, of their interactions within the company and with people and organisations in the containing system. Interconnected people contribute to the efficient and effective working of the whole organisation/ system. Productivity declines when individual or organisation integrity is compromised. Crucial to integrity are congruent purpose and goals (individual and company); clarity of roles; coherent structure; horizontal and vertical trust and co-operation of and mutual benefit to all who are within and transact with the system.
The arrangement of the parts often is illustrated by vertical layers of parts and the connecting lines. Vertical lines define the hierarchical arrangement of responsibility and authority to decide and act. The higher the vertical level, the greater is the complexity of individual work. In order to support the goals of the layer above, the incumbents of each ‘box’ define the work to be done in that layer and they provide the context and goals of the connected people in next layer below. Horizontal lines indicate the people who must collaborate, so that they may co-create and co-produce valued outputs in line with individual and common goals. The wider the horizontal span, the greater is the complexity of goal achievement and the need for collaboration for efficiency, effectiveness and productivity.
The quality of relationships amongst the parts is more important than the quality of the individual parts (this assumes the individuals have sufficient capability to do their work). Trust is at the heart of productive and enjoyable relationships. A trusted vertical or horizontal relationship between people means that one person is confident that the other will deliver a promised goal within a shared value system. Productivity of the whole is compromised by distrust.
When a person in a higher vertical level is doing any of the work assigned to a person in a lower level, then higher level work is being sacrificed to the detriment of the whole. When the productivity of a person is compromised by inferior inputs or outputs from another in the horizontal plane, the productivity of the value creation system of the whole is compromised: value is lost or destroyed. It is the responsibility of the person in the superior level to ensure this problem is resolved.
A trusted relationship between people means that one person is confident that another will deliver a promised goal within the restraints of a common value system.
“Silos and slabs” are the potential barriers to effective horizontal and vertical relationships respectively. They foster dis-integration and, therefore, loss of productivity. The challenge is to dissolve the barriers; to catalyse synergy in value creation through effective vertical interaction and seamless horizontal collaboration. Loss of organisation integrity deals a double blow to productivity. It causes the productivity of the whole to tend towards the sum of the parts and, usually, it also causes the productivity of the individual parts to decrease.
The goal of governance is delivery of goals through the harmonious, efficient and effective interaction of the parts (people). This æsthetic function primarily is integrative; those at superior/higher levels must provide the context for lower levels; work with them in setting the goals for those levels; ensure that the required people processes, and resources are in place; ensure that the individual people have the requisite capability to achieve their goals and that the vertical and horizontal working interactions are harmonious, mutualistic and also congruent with the intent of the whole.
The goal of management is delivery is to synergise the efficient and effective interaction between the parts in pursuit of the purpose and goals of the whole.
The process requires self-development throughout the organisation; a core function of senior personnel is to encourage and enable self-development at lower levels. The parts of an organisation should be measured in terms the productivity of each part and its contribution to the success of the other parts and of the whole. It is the responsibility of the most senior personnel to ensure that the organisation is a productive contributor to the containing whole of which it is part (i.e. society). When interconnected parts are encouraged to be independently successful and not co-successful, the success of the whole is compromised.[*]
An analogy: African wild dogs form packs because the individuals are small, vulnerable and incapable of achieving what a pack potentially can. The alpha pair provides ensures integrity of the pack. All the dogs in the pack know their roles and there is a high degree of collaboration. The packs are formidable coalitions that are the most successful group predators: eighty percent of the pack’s hunts are successful and deliver rewards that are disproportionately large relative to the size of the dogs.
Roger Stewart © 2009/10/12; v2020/06/03
Glossary
Aesthetics: branch of philosophy concerned with perceptions & associated judgments on appreciation and value.
System: system of inter-related elements
Dynamic system: a system the state of which changes due to the interaction of the parts
Harmonious: pleasing freedom from disagreement, dissent or dissonance
Congruent: coincident; in agreement, compatible in character
Coherent: fit well together
Integrity: honest; true to self; strongly principled
Mutualistic: beneficial to interacting parts
Consonant: in harmony
Resonance: reverberating; synchronous & reinforcing
Synergy: combined effect of interacting parts is > sum of independent effects
Purpose: will; intent; goal;
determination; object of / reason for existence
[*] A conglomerate is not really an integrated system: the parts are connected to the holding company but not between each other. The challenge for the holding company is be worth more than the sum of the parts.