All Organizations Are Perfectly Designed…
- All organizations are perfectly designed to get the results they get.
- Most businesses fail in just a few short years.
- Understanding the principles of good organizational design empowers leaders to make more intentional choices to help their companies thrive.
The executives realized this company, the darling of its industry, was ripe for acquisition. To prepare for this eventuality, they reorganized the company from departments into business units and rearranged the seats people sat in. In months, we were a shadow of our formerly high-performing self. Profitability had sunk, people were stressed and our talent began to jump ship to other organizations.
What went wrong? We spent many hours discussing this. In the end, we learned that we were perfectly designed to get what we were getting. In our naïveté, we broke the design rules for organizations and poor results were our reward.
Understanding the principles of good design empowers leaders to make more intentional choices. By the word design I am not referring to the elements of their business model, which explains the process of how money is made from their activities, but the way things actually work in the company and how that creates the CULTURE. Culture is the way things are done around here. It determines what gets attention and what does not – so it directly delivers your business results.
“Every organization is perfectly designed to get what it is getting.”
– Arthur Jones, as quoted in Designing Organizations for High Performance by David Hanna
Think about that statement for a minute relative to your organization. Are you happy with your business performance? Is your business thriving? The data suggests most businesses are operating far less than optimally. No business is guaranteed to survive. In fact, the odds are against it.
According to the U.S. Bureau of Labor Statistics on business survival rates: At 2 years, 70% of businesses are surviving; at 5 years, 50%; 10 years a third; at 25 years and over, only a quarter of them are left.
In every instance of poor results, we will find misaligned design decisions. It is quite likely that the leaders of the company aren’t aware of the downstream design implications of their decisions. A thriving business requires leaders who can take an objective look at their organizations and design them for excellence.