Leveraging the “structural aspects” of business organisations – align, empower and resonate
Business organisations are ecosystems that are tasked with the goals of performance excellence and financial value creation. And like all ecosystems, they acquire their distinctive character, in part, through the components that are hardwired. We refer to these hardwired components of organisations as their “structural aspects”.
Structural aspects of business organisations include organisation structure, management and operating processes, decision making architecture, governance models, business performance management and people management processes. In effect, structural aspects are all those organisational elements that are explicitly designed as either the foundation, or the frame, or the scaffolding of the organisation.
Not surprisingly, design of structural aspects are often intertwined with each other. More than being desirable, such synchronisation amongst structural aspects is a “must have” feature of organisation design. Structural design of organisations is suboptimal in situations where different structural aspects do not complement each other.
Dissonance between organisation structure and business processes is the most frequently cited example of structural discordance. However, several less cited examples of structural discordance abound in organisations and are endemic to ways in which businesses are run. How often has one heard of difficulties posed by decision making architecture that does not synchronise with the company’s governance! What of cases in which business performance management and people management are not designed based on a similar set of guidelines? And to what avail are organisation structures that do not provide explicit guidance and implications for the company’s governance?
An examination of incidents of structural discordance indicates at least three types of “discordant situations”. First is the discordant situation of “unequal bases” – when structural aspects are designed on the basis of a differing set of principles. For example, while the organisation structure could be matrixed, people performance management may remain primarily functional.
Second is the discordant situation of “poor follow-through” – when design of one structural aspect requires consistent follow-through in the design of other structural aspects, but does not get it. A case in point is the functional organisation structure that is designed to promote deep functional expertise, but which lacks the alleviating and counter-balancing effect of cross-functional processes.
Third is the situation of “inadequacy in detailed-design” – when design of two structural aspects appear clear and synchronised at a high level, but lose specificity and congruence at a more detailed and operational level. Consider the hypothetical example concerning the two structural aspects of the product development process and decision making architecture. Both structural aspects could be following the same design principle of “functional organisation with cross-functional synergies and collaboration”, but could either disagree or remain silent on the specific question of “who will take the go-no go decision at the fourth gate of the product development cycle?”
The synchronisation between structural aspects leads to the smooth functioning of the organisation apparatus. However, the impact of such synchronisation is to be fathomed at a level which is way beyond mere “smooth functioning”. Structural concordance causes organisations to “align”, “empower” and “resonate”. We consider these three resultant outcomes as major “structural impact themes”. We now briefly turn to these three impact themes.
Organisations can “align” as a response to varied stimuli, but rarely align as strongly as when driven to align by the causal factors of “simplicity” and “congruence”. “Simplicity” as an underlying principle for structural design has the potential to turn into a clarion call throughout the organisation. “Congruence” can be spoken of glibly, but when truly achieved, can lead to an extraordinarily perceptive level of alignment that is well understood and heartfelt by employees across the organisation.
Structural concordance “empowers” organisations by being a force multiplier. A high quality organisation structure and robust business processes are of great utility in their own right, but when in synchrony and concordance, can result in an organisation that has power and abilities that multiply manifold. Structural concordance releases latent organisational energy by ensuring that the total is more than the sum of the parts.
When synchronised, structural aspects of an organisation can create “resonance”, and lead to impact that is much prolonged and more permanent in nature. Much in the same way as when resonance occurs due to synchronous vibration of sound. Imagine a situation in which structure, processes, governance and performance management are in concordance. These will impact the organisation at different points in time during the year, but in similar ways, while reinforcing each other. With the resultant effect that the organisation will vibrate in the same frequency for a much longer period of time.
Structural aspects of organisations, therefore, are worthy of deliberation and engagement. When in concordance, these lead to great good through organisational alignment, empowerment and resonance. When designed in discordant manner, these have the power to reduce organisation effectiveness and impair business results.