Monday, March 10, 2008

Designing Organizational Architecture

How do you design an effective organization?  How do you equip your group to achieve its goals?  What are the key components of an organization that will help you be successful.  In The First 90 Days: Critical Success Strategies for New Leaders at All Levels, Michael Watkins writes about how to design an effective organizational architecture and help you avoid dysfunctional arrangements.

Five Elements of Organizational Architecture
Watkins identifies the five elements of organizational architecture:

  • Strategy:  the core approach the organization will use to accomplish its goals.
  • Structure:  How people are situated in units and how their work is coordinated.
  • Systems: The process used to add value.
  • Skills: The capabilities of the various groups of people in the organization.
  • Culture: The values, norms and assumptions that shape behavior.

Identifying Misalignments
Watkins identifies three common misalignments:

  • Skills and strategy misalignments.
  • Systems and strategy misalignments.
  • Structure and systems misalignments.

Avoiding Some Common Traps
Watkins identifies some common traps you should avoid:

  • Trying to restructure your way out of deeper problems.
  • Creating structures that are too complex.
  • Automating problem processes.
  • Making changes for change's sake.
  • Overestimating your group's capacity to absorb strategic shifts.

Getting Started
Watkins provides a proven roadmap for getting started:

  • Start with strategy.
  • Look at supporting structure, systems, and skills.
  • Decide how and when you will introduce the new strategy.
  • Re-shape structure, systems, and skills simultaneously.
  • Close the loop.

Key Take Aways
Here's my key take aways:

  • Build a durable, evolvable frame for the organization.
  • Nail the five elements of organizational architecture: strategy, structure, systems, skills, and culture.
  • Identify misalignments.
  • Know the common traps.
  • Use the roadmap to get started and as a baseline for an effective organizational architecture.

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