I recently had the honor of being a guest on the Business 901 podcast with Joe Dager. Joe and I discussed various topics related to organization design and leading the journey to sustainable excellence. As we recorded the podcast, Joe also captured the video. The video above is an excerpt from that interview. This first video discusses the organization design community, the leadership framework for organization architects, and sustainable excellence. Enjoy the video and the highlights with additional commentary below.
Organization Design Community
We started the interview with a short discussion on the organization design community.
The organization design community is an interesting group…. It’s kind of a fragmented group, and there are all kinds of people involved, and it is not really well structured or well defined. I think part of the issue is it is a cross-disciplinary activity, and so anytime you have a topic that’s cross-disciplinary and involves a lot of different things in an organization, there are very few real formal tracks…. The community is really a collection of leaders who are trying to change the systems in the organization or their organization and front-line process improvement people who are redesigning some piece of the organization.
The “mind” of the organization architect (OA) is multi-dimensional, including perspectives from several disciplines. The successful organization architect integrates practical, human, and creative dimensions to develop holistic designs that create value for multiple stakeholders. The OA is practical and incorporates engineering and business mindsets to inform the technical design of systems to produce the value intended. The OA also incorporates human dimensions, both psychology (individuals) and anthropology (groups). Finally, the complete OA is a creative designer that incorporates the possibilities of art and design into developing new and imaginative designs. Regardless of position or title (leaders, entrepreneurs, and those who help them), organization architects must master two skills – organization design and leading transformation, both of which are built into the Leading Transformation Framework.
The Leading Transformation Framework is the result of a couple of decades of experience working with senior leaders AND research studies of leaders of successful transformations resulting in the Malcolm Baldrige National Quality Award. While the leadership framework isn’t specific to using the Baldrige Framework, it is consistent with those who have successfully used the Baldrige Criteria for Performance Excellence to create value for multiple stakeholders.
I chose that group because the Baldrige criteria require that they create ever-improving results across a comprehensive scorecard. So they can’t be great just based on financials, or they can’t be great just based on a great place to work or whatever. They have to be able to create a place that people are doing great work and enjoying their job serving customers who are delighted, so they come back and spend more money (repeat business) they bring their friends (referral business), and grow the top line, and the investors are happy. They also create wins with suppliers that help them do an even better job with customers, and then they do this in a way that the community loves to have them because they are doing it in a way that is conscious of the community and society and ethical. And, they are doing it in a way that’s good for the natural environment, which is really the future generations, and so they avoid stealing from future generations, so that’s why I chose the Baldrige group.
Learning to develop systems and a culture that create value for multiple stakeholders is important to sustainability in general, but they also contribute to sustaining the changes and the associated gains in performance.
Sustaining the Gains
Baldrige Award recipients have to demonstrate improving results over time across a comprehensive scorecard. While for many to most organizations, past performance is not a good predictor of future performance, when the performance is based on systematic approaches embedded in the culture, it is a different story. However, organizational design is never perfect and sometimes not enough to avoid downturns in performance due to unforeseen factors. It would be nice if we could design systems that could anticipate the future, but we haven’t figured that one out yet.
The majority of Baldridge organizations that I’m familiar with have built “learning loops” into their systems. So it became part of not only their systems but their culture, and that became something that they continued because the world changes on us, so there’s no point where we can say okay we know the answer of how this company should run, and we’re done right, so the design is never finished.
Organization designs are never finished because they are never perfect for the current situation, AND the situation continues to change. Stakeholders’ needs, wants, and desires continually change, competitors develop new and improved ways to meet the needs of the stakeholders, and what is possible with technology continues to develop.
We’re always rethinking the design of the company and reinventing it because the world around us is changing and in fact, it where we’re facing a really big shift these days with the whole digital aspect of business and what is possible you know which creates great possibilities for us but also creates great challenges for organizations and if we’re not redesigning to take advantage of the technology you can bet our competitors are.
Sustainable Excellence frameworks such as the Baldrige Criteria for Performance Excellence and the European Foundation for Quality Management (EFQM) are valuable guides for the organization architect. They are both non-prescriptive and provide design considerations for a variety of organizational systems. Since they are non-prescriptive, the designer is free to develop custom designs that best suit the particular organization. Since these designs are custom and created by humans, they are not perfect. To sustain high performance, the organization must be continually be reimagined and reinvented to meet the ever-changing external environment. The organization architect’s work is never done.
Baldridge is not perfect, and it’s not a panacea. It’s a great set of questions to help you learn, but if you take your eye off the ball and stop using it to learn, you’re going to experience the same kind of decline anybody else would. Baldrige organizations aren’t bulletproof. They are just good role models that we can learn from, and they are doing it in a way that creates a balanced set of results, so they’re not just taking from one [stakeholder] to make something else happen in the short-term which is not sustainable.
I am reminded of something that one of the participants at our 2006 Summit meeting in Colorado said, systems are great, but “leaders have to come in and ‘blow the balloon up every day.’” (Latham, 2008, p. 24)