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Retire the Org. Chart!

 

Phanish Puranam (Roland Berger Chaired Professor of Strategy and Organizational Design at INSEAD) stated in a recent article that “Organization charts are tools for organizational design, but we shouldn’t confuse them with the design”. As consultants or top managers, we used these tools more or less when the time came to define a new organizational structure. When I was asked to support (in various roles) on such a project, I always asked the question “Why do we need a new structure?”. Very often, the discussion bogged down at this point as it is extremely hard to admit that org.-charts should fulfil the purpose of strengthening the individual function of power of the players within an organization. According to the Oxford Dictionary, power is defined as “The ability or capacity to do something or act in a particular way”–and boxes-and-arrows is the perfect tool for underscoring the right to use this ability in business.

 

But organizational design is much more than just drawing boxes-and-arrows. We are designing organizations so that their members can interact to achieve their goals. Just dedicating these people to boxes to force them to act in a particular way does not fulfill the real intention of organizational design. On the one side, org.-charts do show such interactions only in a very coarse manner and, on the other side, we have to reconsider the field of observation. Puranam stated that “every manager who is running a team is an organizational designer”. I can fully agree with this view as every manager’s task should be based on continuous rethinking of the needs of his team members so that they can reach their business goals. Management becomes more and more a supporting rather than a controlling function.

 

Without any doubt, organizational design thinking is changing. Today’s many organizations have been designed by men for men (as the vast majority of top managers are male). More women in business (irrelevant of at which hierarchical level) will lead to changes in our organizations. From a neuroscience point of view, we know that the way of thinking and the way of decision-making differs between men and women. Dr. Therese Huston (Founding Director of the Center for Faculty Development at Seattle University) wrote a book called “How Women Decide: What’s True, What’s Not, and What Strategies Spark the Best Choices” “pries open” stereotypes about women’s decision-making. In her book, she talks about a “dogsled problem” around women’s leadership and decision-making. Women work with a team in a different way, assemble the team, work on disagreements among team members, decide who needs more training and who has to pull more weight. But as Huston says, “On race day, when the cameras and spectators show up, …it's men who take the reins, not the women who orchestrated everything.” It appears that it is in our nature that everyone expects men to make the visible, crucial decisions that win the race.

 

Huston also refers to Mara Mather (Cognitive Neuroscientist at the University of Southern California), and Ruud van den Bos (Neurobiologist at Radboud University in the Netherlands) who independently found that when people are under stress, men become more eager to take risks. Let’s unite the different limbic dimensions (from Hans-Georg Häusel) where men in management positions do hold much greater percentages in the areas of dominance and stimulance compared to women who have in general more balance capabilities. People with a dominant stimulance intend to take greater risks; these are the typical entrepreneurial types. But, in order to succeed from a long-term perspective, we need all types of people in our organizations and therefore we need to create organizations which fit all these different human characteristics.

 

Back to Puranam’s considerations: He created a microstructural view of organizational design which is, from my point of view, an interesting approach. He recognizes that every individual who “is responsible for helping a group of people to collectively accomplish something is an organizational designer”. By continuing to contend that any goal-oriented group of two or more agents is an organization in and of itself, this brings us to the possibility of regarding any divisions, departments and even teams as “a set of nested organizations”. Having this understanding in our minds, we will not continue to discuss how we can strengthen or consolidate our power. Thinking about organizational design, it always divides goals into tasks (division of labor) and how to put the results back together again (integration of effort). We are therefore starting to discuss the goals and objectives of the individual parts of an organization and reflecting their capabilities and its human beings in order to be able to design more brain-friendly designs.

 

We have to learn to create and design organizations which fit our human capacities. People are different so why do we believe that we can learn something about management and to impose this set of thinking on all organizations in order to affect a deeper consolidation of its members? As stated before, an organization is always about the individuals and the interactions between them. We need to start learning about our people on our teams as well as in our divisions and our enterprises and adapt our “best-practice” approach and turn it on its head or as Puranam says, “It’s the problems of organizing that are universal, not the solutions.


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