There is a really, really important perspective that is often overlooked in the business architecture conversation, in the strategy execution conversation, in too many other conversations: the people perspective.
This installment of StraightTalk explores how the disciplines of organization design and business architecture can work together. It just scratches the surface but provides a starting point to move forward from a business architecture perspective.
The takeaway? The discipline of organization design is critical for organizations, especially now, and there must be tight partnership and integration with business architecture. BFFs.
First things first, what is organization design?
A variety of definitions exist, and some are more expansive than others, even sharing certain aspects with business architecture.
For our purposes, we will look at organization design as a discipline, defined per the Designing Dynamic Organizations book as,
“The deliberate process of configuring structures, processes, reward systems, and people practices and policies to create an effective organization capable of achieving the business strategy.”
The authors further clarify that “organization design” is often used synonymously and incorrectly to mean organization “structure.” The organization design process and its outcome, however, are much broader than rearranging the boxes on the organization chart.”
Is there a standard approach for doing organization design?
There are different models for organization design such as Galbraith’s Star Model, McKinsey’s 7S Model, Weisbord’s Six Box Model, Nadler and Tushman’s Congruence Model, and the Burke-Litwin Model. (Here is a comparison.)
For our purposes, we will anchor around Galbraith’s Star Model. Each point on the Star Model represents a major component of organization design and they include: strategy, structure, processes, rewards, and people practices. The latter four components all support the strategy. When all points are in alignment an organization is most effective.
Most importantly though, organization design should be driven by strategy, holistic, intentional, and ongoing. Think about an organization as a living organism.
How we look at organizations, work, and the role of humans is shifting greatly, so be sure to check out some leading thinkers in this space in More Good Stuff.
How do the disciplines of business architecture and organization design fit together?
Let’s look at this through the business architecture lens and from an end-to-end strategy execution perspective. As shown here, within a strategy execution context, the discipline of organization design has aspects that are both strategic as well as more tactical related to the people component of the operating model. (P.S. Make sure to refer back to Post No. 93 for a foundational understanding on business architecture + the operating model.)
This means that business architects and organization designers need to work together very closely upfront during strategy execution to inform and translate strategy, architect changes, and shape initiatives.
This also underscores the necessity of translating strategies and other business direction through the business architecture (with value streams and capabilities as focal points) because it is through this approach that we can most effectively coordinate all changes that need to be made across an organization to all operating model components: people, process, and technology. This is quite important because in organization design literature (as in most business literature today), there is reference to defining an organization’s purpose and strategy and then aligning the operating model around them. However, business architecture is the critical bridge between an organization’s business model and operating model, and between its strategy and execution. (P.S. Check out Post No. 3 for more on the role of business architecture in strategy execution.)
What about organization mapping in business architecture?
Organization is indeed one of the ten domains of business architecture. From a business architecture perspective, organization mapping is a representation of an organization’s business units (including how they decompose into sub-business units) and their relationships to other business units and other domains such as capabilities. We know that a business architecture should represent the scope of an entire organization and the ecosystem in which it operates, so that means the scope of organization mapping should encompass the same, including third parties.
The intent of organization mapping in business architecture is not to replicate the org chart. For example, organization mapping does not include people, titles, or hierarchical management structure. Organization maps just show business units and relationships.
So, business units give us a formal focal point from an architectural perspective and are maintained in the business architecture knowledgebase. Organization mapping can be quite useful for bringing transparency to how things really work without the politics and connecting business units to other important business focal points such as capabilities, objectives, and initiatives in a reusable repository.
(P.S. Check out Post No. 85 for the straight talk on organization mapping.)
How can organization design and business architecture work together?
When teamed up, the disciplines of organization design and business architecture (and of course the organization designer and business architect roles) can be a powerhouse to deliver business results. Here are just a few examples of some goals they share, even though they approach them from different perspectives.
- Intentional organization design – Both disciplines focus on holistically designing an organization to deliver on its intended purpose and value most effectively.
- Organizational alignment – Both disciplines ensure alignment. Strategies should align with organizational value streams and capabilities (and other business architecture perspectives), which should drive and align with the operating model. Initiatives and investments should also align with strategy.
- Agility and adaptability – Both disciplines seek to build an organization’s agility and capacity to adapt to change. For example, in Designing Dynamic Organizations, the concept of a reconfigurable organization is one which “is able to quickly combine and recombine skills, competencies, and resources across the enterprise to respond to changes in the external environment.” Business architecture is itself a modular view of an organization and its requisite building blocks. Capabilities, in particular, define common business components which can be built once and reused in many different ways. (Check out Post No. 89 for how to create a composable business using business architecture as an organization’s common business components.)
How can business architecture bring value to organization design?
Below are a few examples of business architecture value, described for each component1 of the Star Model.
- Strategy – The strategy sets an organization’s direction and is the cornerstone of the organization design process. Business architecture:
- Drives clarity and measurability of business objectives and outcomes
- Ensures the alignment and cohesiveness of strategies, goals, objectives, metrics, and courses of action across an organization. (Check out the benefits of translating strategy into initiatives with business architecture and the golden thread of how we do it.)
- Identifies the comprehensive impact of strategy across the entire business and technology environment
- Translates strategy into the business capabilities necessary to enable it
- Informs a prioritized and rationalized set of initiatives to execute strategy
- Structure – Organizational structure determines where formal power and authority are located. It comprises the organizational components, their relationships, and hierarchy. Business architecture:
- Provides clarity and transparency about how an organization is structured, including views of business units* and their relationships as well as the products, value, and capabilities they deliver
- Provides clarity and transparency about internal and external stakeholders, including the business units they belong to and their role in value delivery
- Uncovers opportunities for organizational improvement and redesign at a high-level (e.g., redundant capability enablement, excessive committee or governance structures, etc.)
- Informs outsourcing decision-making
- Provides comprehensive impact analysis for potential organizational changes across the entire business and technology environment
* Various levels of business unit detail are represented (e.g., from high-level structures such as operating companies down to business units and sub-business units) and business units types include internal business units, partners, and informal structures such as committees or collaborative teams.
- Processes and Lateral Capability – Regardless of how well thought out an organization’s structure, it will create some barriers to collaboration. These can be overcome by lateral mechanisms such as interpersonal and technological networks, team and matrix relationships, lateral processes, and integrative roles. Business architecture:
- Identifies where lateral mechanisms are needed to bridge silos for information sharing, decision-making, collaboration, and reusable solutions
- Provides a shared, high-level framework (through value streams and capabilities) to inform lateral mechanism design with natural areas of commonality and an end-to-end value delivery perspective
- Reward Systems – The design of metrics and reward and recognition systems influences the success of all other design components. Business architecture:
- Provides traceability from the goals, objectives, and metrics of the enterprise to business units to individuals
- Provides traceability from goals, objectives, and metrics to the value streams and capabilities which can most effectively achieve them (which can be followed through to processes at a lower level)
- People Practices – The collective human resources (HR) practices create organizational capability from the many individual abilities resident in the organization. Business architecture:
- Informs on the people (e.g., roles, skills, competencies) needed to deliver the organization’s intended value and capabilities, in alignment with its purpose and strategy
Check out the handy summary below.
How do the domains of business architecture and organization design relate?
When integrating business architecture with any related discipline, there are always a few key points to consider: the role definitions, how the roles interact within a business scenario context (e.g., strategy execution), and the actual content cross-mappings between them.
So, what goes in the business architecture knowledgebase for organization design? What do we connect to what? There’s not an official BIZBOK® Guide answer on this, so to answer it we need to determine the concrete domains within the organization design discipline (think about the people component of the operating model), and then connect them back to key domains within business architecture.
Some of the most important domains that business architecture offers are business units (including the capabilities they have within a value stream context) and stakeholders (and their role within a value stream context). Perhaps some concrete domains within organization design might be role, skill, competency, and others. The stakeholder-to-role cross-mapping could be valuable to inform various analyses and implementation planning. However, like the cross-mappings for any component of the operating model (e.g., process, technology), these relationships can become quite numerous and detailed, so as always, capture just enough just in time to inform your business decisions and needs.
Where do we go from here?
First, find your friends! Seek out the people in your organization who do organization design and start the conversation about how you can work together and how business architecture can bring value to the outcomes they are trying to achieve. You might find them in different areas of your organization (e.g., within the Human Resources department or as a standalone discipline team) and called different things depending on their scope and focus (e.g., organization design, organization effectiveness, organization development).
Over time, you can get more intentional on the integration between organization design and business architecture, which includes discussing your roles and interactions within an end-to-end strategy execution context as well as other business scenarios. As mentioned above, determine what organization design/business architecture cross-mapping content you will maintain in your business knowledgebase and how you will use it.
Most importantly, find ways to make a difference to help your organization better deliver on its purpose and value. Let’s team up to create stronger organizations together!
More Good Stuff...
Partners in Change (StraightTalk): While this installment focused on organization design, a closely related topic is organizational change management. Check out StraightTalk Post No. 88 for more on how the disciplines of organizational change management and business architecture work together. Also, make sure to check out the excellent podcast with Ken Williams upon which the installment was based.
Designing Dynamic Organizations: A Hands-On Guide for Leaders at All Levels (book by Jay Galbraith, Diane Downey, and Amy Kates): An absolute classic on organization design. It’s a must-read and go-to reference.
Sergio Carreda website: An absolutely outstanding compilation of content and wisdom on work, organization design, experience, leadership, and change from Sergio Carreda. He’s a good individual to follow.
Naomi Stanford website: Dr. Naomi Stanford is another amazing thinker in this space. Check out her website and books on organization design. She’s another good one to follow.
Heather McGowan website: For more on the future of work, check out future-of-work strategist Heather McGowan. She is brilliant, articulate, and inspiring. Definitely follow her.
Organisation Design is Architecture Design (Sergio Carreda): This article underscores how intertwined enterprise architecture and organization design are. Business architecture is the tie that can truly bring them together.
3 Myths of About the Future of Work (and Why They’re Not True) (TED Talk): A thought-provoking TED Talk by Daniel Susskind who confronts three big questions – and misconceptions – about the future of work, related to automation, wealth distribution and more.
The Future of Work (TED Talk): A TED Talk by Dr. Naomi Stanford, a true expert on organizations, about what preparing for the continuously unfolding future of work means.
- 1. Note: Component descriptions are from the Galbraith Star Model.