Organization design blog

Sitting in a meeting on redesigning some government office space other day I tried to make sense of a number of phrases which, I'm assuming, are common in the world I am learning to inhabit. So, I heard block and stack, density ratios, lift and shift, fit factor (not physical fitness of people), finishings, and then various things about HVAC systems, fan coils and so on. We meeting participants all looked at floor plans of office layouts with 'innovation hubs', 'huddle rooms', and other space descriptors.

What I did not hear was anything about the people (not just the numbers of them) who are going to work in the space, the work they will do, the technology they will use, and the adaptations to business processes the move opportunity offers that could result in a transformed business: on that offers higher value for less cost than currently. This seems to me a missed opportunity. Surely organizations should be as aware of the indirect costs and opportunities of moving employees to a new or refurbished office or other workplace as they are of the direct costs and opportunities of the physical bricks, finishings, and furnishings?

If organizational leaders took a holistic, strategic and integrated approach to workplace design: an approach that included consideration of business processes, people's modes of working together, and better use of available technology. The end result would deliver much more than what is implied in the 'lift and shift' approach.

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This week I got this question: "I wondered if you know, or have seen on your travels any great examples of specific organization structures for Innovation Labs?" The writer goes on, "In our view this is a specific environment where people are brought in to innovate the way in which we produce and sell our products and services. This will be separate to the business and will involve some new hires and some employees rotated out of the business. Have you seen any principles on structures to facilitate innovation?"

What's interesting about this is that current thinking appears to converge around the notion that innovation is best developed through business ecosystems. That is a form of intentional development of communities of economic co-ordination where multiple parties join forces to "coordinate innovation across complementary contributions arising within multiple markets and hierarchies," from this, if things go well, the business ecosystems co-evolve and adapt to continuously changing contexts. You can read more about this aspect in James F. Moore's paper Business ecosystems and the view from the firm.

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This week I've been traveling and experiencing all kinds of levels of customer service and I've been wondering exactly what customer service is. What is it that I respond to and what makes the interaction between agent and customer a good one? One of the complicating factors is language. I have been with French, German, and Italian native speakers. If you haven't guessed, I am in Switzerland. I can understand French for the most part (lack of practice means I can barely speak it) but the other two languages I have only a hazy grasp of.

So I am delighted, and somewhat chagrined, when nearly all the people I'm in contact with are able to speak English and wondering if my own customer service is lacking because I don't speak their language. 90% of the interactions I am having are with hotel staff, café or restaurant staff, shop assistants, and bus drivers. The other 10% are with fellow guests, shoppers, and travelers.

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Incipient panic
I wake up from a bad dream that my daughter is in great difficulty in a dangerous environment. I know she is in Eritrea. I get an email from her that same morning.

I am locked out of my Yahoo account! I am in a bit of a fix. Can you Western Union me some money? We need about $1000 US. I am in the Intercontinental Asmara Palace Hotel.

My first thoughts a) it's a scam -someone has phished her account. b) she's written this message under duress c) the dream was prescient d) what do I do now? I try not to panic.

Instead I look at the Intercontinental website for the Asmara Palace Hotel phone number. They don't have a hotel in Eritrea. I begin to panic. No, no, no, my voice of calm admonishes me. Breathe, stop, think, dreams are only dreams they are not reality.

Ok - I look up Western Union to find out how to send money.

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Four times this week I went to Timpson's - a UK shoe repairer and key cutting retailer. Each time was about a mailbox key. The first outlet I went to in Cornmarket, Oxford the assistant first said the key would be a special order and it would take a week to come in. When I told him I was leaving within a week he spent several minutes looking for an appropriate blank and found one that he thought would do the job.
I watched him cutting it. Splinters of metal were showering off the equipment and, out of interest, I asked him if he had eye protecting goggles. "Oh yes", he said. "They're in my apron pocket." He pulled them out to show me. "Why aren't you wearing them? Aren't you worried about your eyes?" I asked. "No", he said, "I just look away."

I knew a bit about Timpson as I'd done some research about it and included it as an example of a well run organization in my book Organization Culture: getting it right .

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Organization design and development activity is usually not tracked or evaluated in any meaningful way. Practitioners do not know whether their work has directly resulted in improved organizational performance. A report from the UK's Roffey Park Institute highlights this deficiency in OD the Roffey Park Institute's report Best Practice in OD evaluation.

The authors say that

We approached our research aware that there are many practitioners in the field of OD who believe that its systemic nature makes it hard to measure; some hold a world view that says it's inappropriate even to try.

.... In the prevailing economic climate we would argue that it is critically important. And as we emerge into a post recession world, we believe that being able and willing to demonstrate the impact of OD on the effectiveness of organizations will be imperative if the discipline is to maintain and increase its credibility.

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It's a 'well known fact' that it is very hard to measure knowledge worker productivity. This I found out when I was asked how the productivity of people in staff roles who were teleworking should be measured. By staff roles I mean functional jobs that do not have readily available quantitative outputs attached to them. An internal consultant is an example - how is his/her productivity measured?

This question has come into focus as we grapple with extending teleworking. One of the resistances to it is that managers fear they won't be able to tell whether an 'invisible' worker i.e. one not physically present in front of their eyes, is being productive. The teleworker feels that he/she cannot prove value add productivity if the work involves, say researching for an article, or planning a strategy.

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In a results oriented world of measurement, analytics, and accountability there is little room for functions that are unable to prove that they add value to the bottom line. Evaluating the link between organizational performance and OD/HR practices is complex and there is no one right way to do it.

A report commissioned by the Institute of Personnel and Development in 1997, Impact of People Management Practices on Business Performance, Institute of Personnel and Development, sought to establish a link between HRM practices and the financial performance of organizations: one in a series of efforts to prove that HRM contributes positively to the 'bottom line'. The findings from this research did reveal a measurable impact of HRM on organisation performance and productivity.

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I was on a short flight today and didn't hear the sole flight attendant tell us that it was a 'no beverage service flight'. About 20 minutes into the trip I asked her if I could have a glass of water. Her response caused me to think a bit. Clearly I was a 'customer' and she must have had extensive training in customer service. But at odds with this training was the obvious irritation she felt that I'd dared to ask for a 'beverage' on a no beverage flight. It seemed to me that she was trying to decide whether to refuse to bring the glass of water. Maybe she thought if other passengers saw me getting a glass of water she would have to serve them with one too.

Fortunately, for me, customer service prevailed and I got a glass of water. But she did not deliver this with a warm smile or any semblance of authentic service. Instead it came with a lecturette delivered loudly enough to put off other passengers from asking for water. Something on the lines of if I'd been paying attention as the flight took off I would have heard this was a no-beverage flight, and could I please remember that none of the flights on this route offered beverages (why beverages and not drinks I wondered?) and on the next flight I took on this route I must not ask for a drink/beverage.

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I'm working with a client who currently has a hiring process that takes 198 days. Using a six sigma approach she has reduced it to 80 and is about to launch it on that basis. However, an internal client has come with the request for a 'bulk hiring' of 200 people to be done within 30 days. The question is, can the hiring process be accelerated to that level. What are the risks, and what would be compromised?

This is where people need to agree on the design criteria. Essentially design criteria

• Clarify what the new organization design must do well
• Identify 'problems' that must be solved in the new design
• Develop the 'benchmark profile' to guide the design and use in evaluating the design alternatives
• Take the emotion out of organization design and provides tangible data with which to assess options
• Provide focus for design or redesign that improves performance
• Lay the foundation for trade-off decisions - they articulate priorities that guide the design through conflicting needs.
• Keep members focused on the same outcomes of designing
• Enable differences to be surfaced and discussed
• Can be used to evaluate different design solutions

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The article 'Here be Dragons' in the Economist notes that Business travellers in today's emerging markets ... constantly come across what to Western eyes look like exotic corporate species and new, unfamiliar kinds of business which raise profound questions about the evolution of companies and business models.

What I've found is that people are confused about what a business model is. Briefly, it is the 'what and how' of a business: in graphical terms it is a simplified representation of its business logic. It describes what a company offers its customers, how it reaches them and relates to them, through which resources, activities and partners it achieves this and finally, how it earns money". In a sense a business model is what someone seeking investor support to set up a company would describe in the business plan.

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It's noticeable how people think about organization design from the mindset of design = structure i.e. the organization chart, layers and spans of people, and reporting lines. Most managers I work with take this view as they "re-structure" by first redrawing their organization chart.

This tendency is not particularly surprising but it is limiting and risky. If one takes the definition of organization design as: "arranging how work shall be done in order to achieve a business purpose and strategy" looking first at structure is limiting because it is not looking at the work to be done, and this limits the thinking about various possible structural options.

Work can flow in a number of different ways - first mapping the ideal workflow, noting handoffs, interdependencies, decision points, and so on allows, as a second step, the design of a structure that optimizes the work flow. Usually two or three different options for the structure emerge in this exercise and deciding which one to implement then becomes a considered choice related to ease/difficulty of aligning all other elements of the system to deliver the work.

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This was written while traveling in to Day 2 of the conference. Having just read an article on sleep and memory it was fun to see what stuck in mind in since writing about it traveling back on from Day 1.

Will Hutton, of the Work Foundation, getting impassioned about the relatives merits of China v Korea on where new business models and innovative ideas would generate. He had an impressive array of facts and figures at his disposal to back up his views that South Korea is the place to watch. He also put forward a concept of "manu-services - manufacturing companies offering both services and products." See the Work Foundation's report Manufacturing and the Knowledge Economy on this topic.

Ideo's Paul Bennett putting forward their ideas on the four pillars of a new business model. Purpose, talent, something I don't remember and money. The focus throughout Ideo's presentation on money was a jarring note - no mention from them of sustainability, ethics, climate change, social concerns, triple bottom line, and so on that informed most of the other presentations, that combined with presentations of distinctly uninnovative business models made this segment much less than expected.

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Thursday March 11 was day one of the Economist Conference The Big Rethink: The Redesigning Business Summit and, having spent the day there I'm wondering a) what I learned, and b) was it worth the time and money investment? It's a bit early in the process to make any judgment on either. I've found that on this type of learning event it's what sticks in my mind several weeks later that gives some indication. At this stage I'm guessing about what might stick in my mind.

On immediate recall - I was not very happy on two housekeeping accounts a) there was no postal address for the venue on the program. King's Place, London is not easy to track down. b) when I got there I didn't appear in their register of attendees, and having given my name I was asked "Are you sure that's your name?" Fortunately, I have the receipt and the name on it is my name. But not being listed may explain why I didn't get any venue or other details (beyond the receipt). UPDATE on this. Day 2 the same thing happened but was sorted out by the conference Logistics Manager who apologized for the error and offered me free attendance at any future Economist Conference.

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There have been three pieces of information in the last couple of weeks on the push for citizen access to government data. They caught my eye because I am doing some work with some government departments. Taken together they make three points about this drive for data transparency:

• It "forces bureaucrats and creative types to interact in new ways'' (see: February 4 the Economist printed an article 'Of governments and geeks')

• It seeks "to merge two cultures: the risk-averse ethos of the civil service, and the free-wheeling spirit of open-source developers, who seek continuous incremental change and see failure as a step to improvement" (Same article)

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I've just come across a short piece about business culture and innovation that precedes an article to be published - date unspecified - in the Journal of Product Innovation Management (you can order a sample copy of this journal). The paper is written by William Qualls of the University of Illinois and Jelena Spanjol. (NOTE: March 3, 2010. My thanks to him for subsequent to my writing this sending the full paper to me).

This piece sent me in two directions. The first direction was a question to myself "Is there a Journal of Service Innovation Management'? The answer to this appears to be "No". There is the International Journal of Innovation Management which has some interesting looking articles in it. For example: Implementing Best Practices to Support Creativing in NPD Cross-Functional Teams "The use of cross-functional teams increases creativity in new product development leading to shorter development time and higher product innovativeness. Research in new product development [NPD] has identified a number of organisational practices associated with supporting organisational creativity in cross-functional teams including frequent and open communication, building organisational slack, attitude to risk and top management commitment."

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Somewhere along the line I heard the word TRIZ. Always interested in new words I looked it up i.e. Googled it. (I don't think TRIZ appears in my print copy of the Oxford English Dictionary, but I'll check next time I'm near to it. To explain - my print copy of the OED is in a different location from where I currently am but Google is at my fingertips).

Once I'd looked up what it was I remembered that I'd been talking to someone about innovation and he had mentioned TRIZ, as it's a problem solving/creativity tool. Briefly, it works on the principle that someone, somewhere has solved a problem in an innovative way that is similar to the one you are trying to solve. I found a good beginner's article on the topic that explains this in much more detail but here's the headline explanation from that article.

"TRIZ is a problem solving method based on logic and data, not intuition, which accelerates the project team's ability to solve these problems creatively. TRIZ also provides repeatability, predictability, and reliability due to its structure and algorithmic approach".

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Yesterday I returned my rented car to Enterprise. I'd chose Enterprise because I had previously had good experiences with them and they were the cheapest for the period of time I wanted a rental. Again I left as a satisfied customer (and recommend them as a rental company).

I can't say that they 'exceeded' my expectations because it was already high. But they hadn't dropped their standards. Here are some examples:

• There was a short wait in the reception area - I was offered a bottle of water and the manager came over, introduced himself to people in line and apologized for the wait.
• The check in agent introduced himself by name, suggested a higher performing car in the next price bracket but did not press the point when I refused.

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My mother is in hospital this week having a hip revision (and doing fine). Going into the place where she is having it reminded me that I'd been reading more stuff about hospital design. For example I'd looked at the Kaiser Permanente's Garfield Healthcare Innovation Center (established in June 2006) website

It describes itself as:

A living laboratory where ideas are tested and solutions are developed in a hands-on, mocked-up clinical environment. Many aspects of delivering healthcare can be innovated and examined at the Center using real-world scenarios and activities, such as simulations, technology testing, prototyping, product evaluations, and training.

Although several of their pages are locked for KP personnel only it's easy enough to get an overview of the types of activities the Center is engaged in and why this form of experiential approach to innovation and collaboration is an exciting and productive one.

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Yesterday I had two interesting experiences. I had to exchange my San Francisco driver's license for a Washington DC one which meant a trip to the DMV. I also had to go to an Embassy's (Visa Department) to get a visa for my planned trip to that country. Previous experience of both the DMV and visa applications led me to pack - yes I felt I was going on an expedition - a long novel and some unobtrusive snacks. (Eating and drinking in most of these types of places is not allowed - however long the wait).

In both cases my preparation was similar.

• Read the instructions on the website extremely carefully
• Print off the form.
• Complete the form accurately - always a challenge for me as I tend to dash ahead and do things like put my date of birth in the UK order and not the US order. NOTE in the UK the day comes before the month.
• Collect together the various documents that are required. For the DMV that means - social security card, passport, previous driving license, and utility bill as proof of current address. For the Visa application it meant passport, letter from people inviting me, letter confirming hotel reservation + passport sized photo.
• Check the opening times of the two offices and schedule enough time to sit in both for as long as it took. (I decided to leave the day free).

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Someone recommended me a white paper , funded by the W. K. Kellogg Foundation Intentional Innovation: How Getting More Systematic about Innovation Could Improve Philanthropy and Increase Social Impact. Defining 'innovation' as a 'new ideas that work' the authors suggest that

"Systematic innovation requires well-managed and repeatable processes, to move an organization beyond a dependence on the lightning-strike of sporadic innovations and to create a more constant and dependable flow of new ideas. According to innovation expert Larry Keeley, "Innovation that works is a disciplined process.... The real frontier is to not think of it as a creative exercise, but to think about it as being disciplined in using the right methods."

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Continuing yesterday's Avatar theme on not destroying the planet, I looked again at a video clip of Ray Anderson, CEO, Interface Flor speaking about the events that led him to commit his company to sustainability. It started with his reading a book, in 1994, by Paul Hawken, The Ecology of Commerce which talks about 'the death of birth". This was a phrase and a discussion on that profoundly moved Anderson.

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The other day I wrote about Amazon's lists, profiles, and so on. I'd sent off two enquiries (but on one form) to their 'contact us' service having previously trawled through the FAQs and not found my questions either posed or answered. Within about eight hours I got a response to both - but as two separate responses (one from a do-not-reply email and the other from a customer service person called Surya P).

The first response which was to my question: Can I have just one profile on Amazon rather than two (currently one personal one and the other an author one)? The answer is: "Unfortunately, it's not possible to link your profile page to your author central page. I'm sorry for any inconvenience this may cause".

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We were all asked yesterday at work to name a service innovation that stuck out for us in 2009. My favorite one is the Christmas Tree for Rent service run by Scott Martin, in Los Angeles. I noticed it in the NY Times at the beginning of December 2009, and particularly liked the idea that people could have a tree but in a sustainable way - they can return it, alive, to the nursery after the season.

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Yesterday at work the repeated discussion we are having on 'service innovation' re-surfaced. Like others we believe there are methods for offering services not just in a 'better sameness' way but in an altogether different way. What seems to be a sticking point is a practical method for helping organizations think through how they can get to the altogether different way.

A site I have just come across Consortium for Service Innovation has a helpful range of tools and resources around service innovation including a paper "Observations on Innovation" which offers some good start-points on the topic plus a useful model (albeit the usual 2 x 4 box) that is straightforward to follow.

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Why is it that business leaders often say they want to have an 'innovative culture' or 'develop innovation skills', or simply 'be innovative', but want to do this using their existing business model. Assuming they don't think they have been innovative enough to date, how is it they think that they can be innovative in the existing model?

Start innovation by innovating the business model. It's surprising that so few business leaders do this.

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The University of Coventry in the UK opened the Serious Games Institute in fall 2007.

The Institute acts as a hub for 'serious games' (defined as digital computer games with an educational purpose) research and development and notes that:

The current main areas of application of serious games (and virtual worlds) are in the business and military sectors but there is also much interest in their use in the education sector.

A report published in co-operation with the Serious Games Institute in November 2008 Serious Virtual Worlds: A Scoping Study makes the point that

Immersive world applications achieve this mainly because they have the potential to support multimodal (using different senses) communications between learners; they set up the potential for problem - or challenge-based learning and offer the learner control through exploratory learning experiences.

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A couple of articles have recently talked about new designs in education. Fast Company notes that:

The edupunks are on the march. From VC-funded startups to the ivied walls of Harvard, new experiments and business models are springing up from entrepreneurs, professors, and students alike. Want a class that's structured like a role-playing game? An accredited bachelor's degree for a few thousand dollars? A free, peer-to-peer Wiki university? These all exist today, the overture to a complete educational remix.

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Someone suggested yesterday that organizations in different stages of maturity might need different forms of innovation. He'd defined innovation as a 'better but different' process improvement i.e. not just incremental improvement but something substantially different that meant a process was getting done more efficiently, cheaply, productively in a very different way. An example at a market level is the way car rental process.

The traditional way is of the Hertz. Budget, Avis business model, and a different, newer, innovative way is the Zipcar model.. Now Hertz is taking on the Zipcar model. Connect by Hertz which launched in December 2008 and is now in various cities in the US plus London and Paris. At the time of the launch Hertz spokeswoman Paula Rivera said plans were already in place to expand to other locations. "We plan to go after the car-sharing market in an aggressive way". (wsj. December 3 2008). By April 2009 Hertz was claiming that its pilot was successful and had signed its first corporate customer (Marriott) - adding car sharing to 'its business travel portfolio', and in June added Xerox as a corporate customer.

So how long will it be before other traditional car rental companies start to compete with Hertz? How easy will it be for them to change their business models to take on this new way (for them) of car rental? Going from one business model to another is a challenge for most companies - changing not just the systems, policies, practices, and processes, and measures changes but also the mindset and management style - and many don't think through the implementation and execution of the new model. A perfectly conceived innovation is useless if it can't be implemented effectively.

There's a retail outlet called Sports Basement close by that's housed in what was previously a supermarket. What's fun is that the space has not been refurbished and all the supermarket signage remains. When I asked an assistant where I could find the running kit she replied 'It's over in Dairy'. The ski stuff is in Produce and so on. I like the idea that things can work well in unexpected circumstances. Maybe we're too quick to rip out and refurbish. There's probably value in new wine in old bottles as it were. Sports Basement is doing very well with it's distinctive culture and partnership structure. "Lots of places have rules about how stores are supposed to look, and scripts saying what employees are supposed to tell customers," said Tom Phillips, 40, a boyhood pal of Prosnitz, who brought sports, English and construction acumen to his status as a founding partner. "We want our people to use their brains on the floor, show some entrepreneurial spirit. We have very experienced artists and craft people working for us. It never stays flat. Our stores change around every week".

http://www.sportsbasement.com/custserv/customerservicemain.jsp?ruleID=21&itemID=0&itemType=Customer+Service&cid=1

It's a good organization design that's working.