Organizations in Motion

Org structure change! It is the magic potion, isn’t it, that CEOs want to feed their companies every now and then (could it be because the CEO is the only person not affected by it? Everyone reports to him anyway…!)
While this is not quite an annual exercise (thank heaven for that!), it does seem to happen every two or three years at least.. the current organization is not ‘delivering’ and we hope to shake things up a bit and maybe shake out some rust in the wheels.
This article is not about organization structure – really, too much has been said and written about organization structure for me to want to add anything to the body of work on it. The really important exercise is: thinking through how the organization will actually act –what will the organization look like in motion? For this, we need to shoot a film, not write a book – or, at least, write a movie script. Just as the business model is the strategy realized, so is ‘organization in motion’ the organization in action, on the ground. The business model and the ‘organization in motion’ are very closely related – the starting point for the ‘organization in motion’ is the business model.
In designing the organization, CEOs rightly ask: where do I want to place the levers of accountability? Whom do I want to give powers to? Implicit in this question is the more fundamental one: what business model do I want to build?
I will illustrate with a recent example: one of the companies I advise, is wrestling with the question: do I organize vertically or horizontally? Should we create P&L units (loosely called SBUs) around technology or around industries?
My own observation is that it doesn’t really matter – what matters is how the work is going to get done.. the questions we should ask are: what is our growth model? Are we going to grow existing accounts and relationships by selling them more and more products and services, or are we going to go from one client to another and sell them the same thing, over and over again?
The really important exercise, hardly ever done with enough seriousness is to construct a few scenarios and work through how the organization will delivering each scenario. Let us consider one: we have a customer, say, in the US, to whom we have sold a solution based on one technology. We have a team back in India working hard at delivering the solution. Now what? What comes next? How will we grow the business? Who will work with the customer to figure out what other technology solutions he needs? If the account is ‘owned’ by the first technology unit, what is the incentive for that business unit to cede control of the account to another technology unit? It can be made to happen, but only by ‘pulling teeth’.. is that what we want as the new ‘normal’? If we somehow manage to sell the customer the new solution, who will deliver it? Will it be the same team or a new team? Who will manage the interface between the teams? If we think this is the important ’business model’, then it stands to reason this is the level at which KRAs, incentives, team structures, business units, need to be aligned. Obvious, isn’t it? But how many organizations actually think through all this when they change the organization? Thinking through scenarios of the ‘organization in motion’ sounds artificial and trivial, but it is, in fact, the key to making sure the organization works!