The Hindu Business Line : Reinventing organisation design

The prime objective of organisation design is to create a business entity around a strong foundation of shared values and goals. The basic criterion is that purpose and values must be reflected in all the activities of the organisation.

In companies that invest considerable time and energy in developing shared values through training, employees are able to form teams and forge relationships more quickly than before.

Organisation design is not a mere exercise in changing structures and processes in a company. Companies must break away from the dogma of structure and process, but focus more on values. Structures are meant only to serve a chosen purpose. What is important is that people are enabled to achieve that chosen purpose. The prime objective of organisation design is to create a business entity around a strong foundation of shared values and goals. The basic criterion is that purpose and values must be reflected in all the activities of the organisation.

The concept of organisation design is simple in theory but highly complex in practice because of two reasons. First, the sheer number and variety of elements that make up an organisation and their inter-relationships are immense. Managing this complexity is a logistical nightmare beyond the wit of majority of managers.

Second, the central factor in any organisation is people; and people defy logic and common sense. Everyone is an individual and expects to be recognised and treated as such. No two persons are similar. Everyone brings to work his/her own attitudes, aspirations, and problems.

Superimposing these two factors — the unpredictable and irrational nature of people, and the complexity associated with the number of elements in an organisation — this overlay presents a phenomenal challenge. As the needs of the individual take on greater importance in the knowledge economy, the difficulty is compounded requiring an altogether different dimension of organisation design. Recognising that organisation design is a process, and not an outcome is important. It is a journey, and not a destination.

One will not suit all

One form of organisation design will not be suitable for all situations. Organisation design in the knowledge economy is like the steam engine in the information age. The key is not only to find and install the right organisation, but also to master the art of designing organisations appropriate to emerging situations. This is an imperative competence in an age wherechange is constant. Every organisation has been designed to achieve the results it does. If an organisation is required to deliver a different set of results, it has to change its content and format.

An organisation is a collection of people working together to achieve a common purpose. The role of organisation design is to facilitate and nurture positive relationships among its people so that the goals of the organisation can be achieved. Some managers have the propensity to overemphasise the significance of structure when considering organisation design.

A focus on structure is akin to saying that the skeleton is a more important part of the human body. Few illnesses of the skeleton endanger human life. Failures of the soft tissues of the body — such as heart, brain, and liver — are more life threatening. So also organisation design must pay attention to the soft tissues in an organisation viz., processes and relationships. If these fail to function properly, organisations are more likely to turn sick and decay. The process of building and sustaining shared values is a continuous activity from recruitment to retirement.

Investing in shared values

Companies invest considerable time and energy in developing shared values through training, coaching, follow-up, and feedback. Employees recoup this investment through improved performance. They are able to form teams and forge relationships more quickly than before. While a lot of companies treat organisation design most earnestly - much beyond the poster on the wall - there are some companies, which tick it off the checklist containing latest management fads and fancies.

What is crucial in organisation design is to recognise the significance of emotional intelligence rather than rational intelligence. There is no such thing as pure logic in people management. Decisions must always earmark some space for emotional content and response. Organisations, which are designed with rigid and indelible boundaries and where communication is confined only to a favoured few are bound to fade away fast.

Success warrants emotionally intelligent people working in an emotionally charged environment. The brain thinks emotionally (value-based), before it thinks logically (reason-based). This syndrome, beliefs before logic, in decision making is an important issue that managers must understand. It explains why people often react in an apparently irrational way to the information presented to them - irrational from the point of view of the person presenting the data.

Nevertheless, values do not comprise the whole story. When reason creates a compelling case, people may even act against their values. In other words, people may tentatively change their values in that context and for the time being. They may do this for the sake of expediency, or because they are compelled to choose between two strongly held values. The choice between right and right is far more difficult, than the choice between right and wrong.

Managers often eschew and exclude emotions and beliefs, but prefer to rely on rational decision-making processes. Even when confronted by an emotionally charged circumstance, managers still have the tendency - nay weakness - to convert the situation into a position based on objectivity. But ignoring something because it is difficult to do will not make it go away. Managers need to face up to the reality of dealing with emotional and maybe irrational people and situations. They must find methods to design organisations that tap into the power of emotions and beliefs, not ignore them.

(The writer is a Chennai-based freelancer)

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