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ODC & JOD Interviews on Organization Design

Interview with Ron Nicol

In this interview, Ron Nicol, Senior Partner and Managing Director at BCG and John Joseph, Assistant Professor of Strategy at the University of California-Irvine, discuss BCG’s approach to organizational design known as “delayering.” Delayering is the process by which the layers and levels in the organization are reduced and aligned so as to provide better decision making and reduce costs. As Nicol discusses, delayering is a multi-step process based on two key concepts: the geometric nature of organizational structure and LeChatelier’s Principle. Key success factors include CEO involvement, participation at multiple levels of the organization, and adherence to a carefully crafted set of design principles. Nicol also discusses the optimal structure for Fortune 500 companies and their international equivalents.

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Miles & Snow on Organization Design

This interview is with Professor Charles Snow. Snow is Professor Emeritus of Strategy and Organization at Penn State University. He was a professor at Penn State from 1974 to 2012. The interview was conducted in 2013 while he was visiting professor at ICOA (Interdisciplinary Center for Organizational Architecture) at Aarhus University. Professor Snow is a founding member of the Organizational Design Community and co-editor of the Journal of Organization Design. He is a Fellow of the Academy of Management and is listed in Who’s Who in the Management Sciences and Great Writers on Organizations.

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George Huber's research journey

Professor George Huber holds the Charles and Elizabeth Prothro Regents Chair Emeritus in Business Administration at the University of Texas at Austin. He is a founding member of the Organizational Design Community. He is a Fellow of the Academy of Management and of the Decision Sciences Institute. He is the recipient of multiple international awards for his research contributions. The interview focuses on Professor Huber’s research journey. He explains how he has managed to stay focused while working in many fields, and how his experience in non-academic environments is reflected in his academic thinking. He also explains what moved him into the field of organization design and what he sees as the major challenges for organization design research in the future.

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Burton & Obel on Organization Design

This interview is with Professors Richard Burton and Børge Obel. Professor Burton is Professor Emeritus at The Fuqua School of Business, Duke University. Previously, he was senior editor at Organization Science. Currently, he is an associate editor of the Strategic Management Journal and associate editor of the Journal of Organization Design. Professor Obel is Professor at Aarhus University and Director of the Interdisciplinary Center for Organizational Architecture (ICOA) which he founded in 2011. He is co-editor of the Journal of Organization Design. He is the former Dean of the Aarhus School of Business. The interview was conducted in 2013 when Professor Burton was a visiting Professor at ICOA.

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JOD Video Abstracts

Welcome to the Organization Zoo series

What can we learn from outliers? While statisticians rightly warn us against their non-representativeness, we believe it is also true that thinking carefully about what makes them atypical may improve our understanding of the typical case. This is the premise behind the Organization Zoo series. Valve Corporation (Valve) is an unusual firm. It is a rare example of a firm that appears to operate without any formal hierarchy in its organization. What can we learn about the viability of authority hierarchies from Valve’s way of organizing? We wrote a brief account of Valve based on public information sources and asked several renowned organizational experts to comment on this unusual firm. We asked them to write a short commentary on what the Valve example means for organizational theorists and practitioners. Thankfully, they all accepted, and we are excited to present the results of their thinking in this first “exhibit” in the Organization Zoo.

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Big Data and Organizational Design: Key Challenges Await the Survey Research Firm

Digital data is everywhere, and its ubiquity is causing profound changes in our personal lives and in the functions of government, business, and academia. Organizations of all sizes and purposes are seeking to take advantage of the big data tsunami and the opportunities it presents. RTI International, a non-profit U.S. research organization, draws more than 80 percent of its $760 million in annual revenues from competitive grants and contracts funded by the U.S. government. The organization is rich in talent and expertise but not currently aligned in a way that meets big data’s challenges. To thrive in this rapidly changing environment, RTI must determine how to seize opportunities big data presents, survive the threats posed by big data, and offer its clients expanded services. How well RTI responds to these challenges will determine its role in the search for solutions to the major social and scientific problems of our day.

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Navigating the Possible Legal Pitfalls of Virtual Teams

Virtual teams are an increasingly popular element of organizational designs. While virtual teams offer important advantages – including increased collaboration, greater flexibility, and cost savings – they may also create legal issues. Specifically, using virtual teams may lead executives to unwittingly violate labor and personnel laws. The results can be costly, including the loss of key personnel, damage to a company’s reputation, and financial harm. Viewing virtual teams from a legal point of view, we identify pitfalls that virtual teams may encounter and offer ways to avoid them.

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How to Design for Strategic Resilience: A Case Study in Retailing

Few firms can be said to be truly resilient by sustaining high performance for a long time. We draw on a case study of a large U.S.-based retailer to explore how an organization develops resilience – the ability to recover quickly from environmental jolts or misfortunes. The company’s CEO, concerned about the company’s ability to maintain its industry leadership and excellent performance, sought to engage the organization in a broad quest for developing resilience capabilities. Our analysis of this case suggests that generative doubt, organizational slack, and mindful engagement throughout the organization are key conditions for resilience. These three conditions need to co-exist to develop and sustain strategic resilience.

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The Strategic Fitness Process

Organizations underperform and sometimes fail because their leaders are unable to learn the unvarnished truth from relevant stakeholders about how the design and behavior of the organization is misaligned with its goals and strategy. The Strategic Fitness Process (SFP) was designed to enable leaders to overcome organizational silence about the misalignment with the environment and chosen strategy. By enabling an honest, organization-wide and public conversation, senior management teams, working collaboratively with scholar-consultants and organizational members, have access to valid data (the unvarnished truth), can conduct a valid diagnosis, and can develop a valid plan to change the structure, processes, and behavior of an organization while at the same time developing commitment that ensures execution. SFP is also a research method. By applying SFP iteratively to new and challenging situations, scholar-consultants can invent new organizational prototypes as well as learn if a standardized and institutionalized organizational learning process like SFP can enhance dynamic capabilities. The SFP model is illustrated with an application to Hewlett-Packard’s Santa Rosa Systems Division.

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Design of Industrial and Supra-Firm Architectures: Growth and Sustainability

The scope of organization design has expanded steadily from work-flow issues and job specifications to firm-level considerations and now to supra-firm industrial structures, where such issues as modularity and clustering loom large. Economic analysis has made little headway in analyzing how increasing returns may be generated through supra-firm structures such as networks and clusters, nor in the question of how their industrial architecture (modular vs. integral, open vs. closed) affects economic performance. The focus here is on the supra-firm industrial architectures that have arisen, either spontaneously through the evolution of capitalism or through purposeful design, involving both state and private actors. Striking cases such as the Chinese automotive industry, which started with the production of conventional automobiles and motorcycles, and now encompasses both two-wheeled and four-wheeled electric vehicles, provide testimony to the power of some industrial configurations to outperform others. My analyses and arguments are placed in the global context of the urgent need to find ways to accelerate the uptake of green technologies (such as electric vehicles) in order to reduce emissions of greenhouse gases and at the same time promote the industrialization of countries still at lower levels of income and wealth.

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Designing the Firm to Fit the Future

Most firms identify market opportunities for their new technologies after they have been developed. This article discusses the design of a “futures group” which can help to synchronize a firm’s technology and market development. A futures group designed to span more than one organization could lead to simultaneous market development for multiple technologies.

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Designing the Organization for User Innovation

There is increasing consensus among practitioners and academics alike that we are in the midst of a paradigm shift from producer-centered and internal innovation processes toward user-centered and open innovation processes. This paradigm shift induces significant changes to the design of organizations. Even though the research field of user innovation has been developing over a period of more than four decades, there have been only occasional intersections with the research field of organizational design. In this article, we aim to provide an integrated perspective of the two fields. We first identify major user innovation strategies. We then derive the implications for each user innovation strategy on key dimensions of organizational design.

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How To Design A Triple Bottom Line Organization: A Start-Up Case Study

In today’s business environment, where success for a start-up company is measured by early revenue and profit, it can be quite challenging to design a triple bottom line organization (people/planet/profit) from the very beginning. We present a case study of a U.S.-based start-up firm and discuss its early challenges, developmental processes, and current success as a triple bottom line firm. The company’s founder and CEO, with no initial product, distribution, or revenue strategy, sought to develop a company that could provide the marketplace with a valuable product while also staying true to a corporate vision of positively affecting less fortunate people. Our analysis of the case suggests that the founder’s vision, passion, transparent communication, and leveraging of partners’ resources were key elements in building the firm. We draw implications of our case study for the designers of future triple bottom line organizations.

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The Information Panopticon in the Big Data Era

Taking advantage of big data opportunities is challenging for traditional organizations. In this article, we take a panoptic view of big data – obtaining information from more sources and making it visible to all organizational levels. We suggest that big data requires the transformation from command and control hierarchies to post-bureaucratic organizational structures wherein employees at all levels can be empowered while simultaneously being controlled. We derive propositions that show how to best exploit big data technologies in organizations.

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Making Knowledge Actionable: Three Key Translation Moments

Leaders regularly experience pressure to move innovation and change initiatives through their organizations. They face the challenge of transforming organizational changes and innovations from ideas into sustained behavior. In this commentary, I argue that successful implementation requires leaders to engage in a translation process that contains three key translation “moments”. The challenges presented by these translation moments are magnified by the difficulty leaders often have in shifting from one moment to the next. Techniques for handling each translation moment are discussed.

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Drivers of Organizational Responsiveness: Experiences of a Military Crisis Response Organization

The topic of organizational responsiveness – where organizations need to flexibly react to strategic and operational demands simultaneously – has been under-explored in strategic management research. Our study was initiated to shed more light on this topic, primarily by studying an organization specifically designed to handle crises. By definition, crisis response organizations have to be prepared to react to unpredictable events. Moreover, the volatility of the crisis situation itself requires a high degree of flexibility to get or keep the situation under control. The study hypothesizes modular organizing and organizational sensing to be key drivers of organizational responsiveness. Empirically, we examine the effect these two variables have on the responsiveness of the Netherlands armed forces for crisis response deployment. Findings indicate that modular organizing and organizational sensing are drivers of responsiveness. In addition, our study uncovered the importance of an organization’s level of system decomposition to responsiveness. A high degree of system granularity can lead to a predominantly inward focus whereas organizational responsiveness calls for a strong external orientation.

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Employing Young Talent from Underserved Populations

This article describes an ongoing 13-year-old program designed to improve the ability of organizations to assimilate young talent from underserved populations, mostly students who have recently graduated from high school. Although many firms have internship and orientation programs, few have well-tested organizational approaches for assimilating 17-20 year-olds into their organizations in an efficient and productive manner. The objective of this study is to describe and evaluate the solution introduced by Workforce Opportunity Services (WOS), a non-profit agency that provides organizations with well-trained talent from underserved local communities. The WOS model is a systemic design involving a lead agency (WOS), corporate clients, training partnerships with local colleges and universities, and underutilized human capital. Over 290 students have completed the WOS program and obtained long-term employment, mostly in IT jobs that normally are outsourced. The results of the study show that companies have success employing young talent when they follow the WOS organizational process. Companies need to have patience with WOS student employees, but within six months most members of the WOS program make positive contributions to their sponsoring firm and have a strong likelihood of becoming permanently employed. Implications of the WOS model for organization design are discussed.

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Designing Organizations for Exploration and Exploitation

All organizations face the core challenge of deciding on investments in two very different types of activities: exploration and exploitation. Exploration activities are future-oriented, such as developing new capabilities, experimenting with new technologies, and pursuing new customers and markets. Exploitation activities, in contrast, focus on the refinement of existing competencies, processes, and products. Because an organization’s design should reflect its goals, it is difficult to accommodate exploration and exploitation activities within a single organization. This article discusses four major approaches used to tackle this problem, and notes the strengths and limitations of each approach.

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Design Guidelines to Address Global Challenges: Lessons from Global Action Networks

Traditional organizations appear to be incapable of adequately addressing critical global issues such as war, climate change, and economic inequality. Addressing these issues suggests the need for organizational innovation to develop global social contracts. Successful innovation must address four integration imperatives: (1) integrate effort and resources across organizational sectors (business, government, civil society) and sense-making, (2) create successful individual to global aggregations, (3) integrate the short and long term, and (4) integrate major issue areas. A new type of organization, Global Action Networks, aims for this integration. Based upon analysis of this new type of organization, five design principles for global social contract organizations are proposed.

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Virtual Design Team: Designing Project Organizations as Engineers Design Bridges

This paper reports on a 20-year program of research intended to advance the theory and practice of organization design for projects from its current status as an art practiced by a handful of consultants worldwide, based on their intuition and tacit knowledge, to: (1) an “organizational engineering” craft, practiced by a new generation of organizational designers; and (2) an attractive and complementary platform for new modes of “virtual synthetic organization theory research.” The paper begins with a real-life scenario that provided the motivation for developing the Virtual Design Team (VDT), an agent-based project organizational simulation tool to help managers design the work processes and organization of project teams engaged in large, semi-routine but complex and fast-paced projects. The paper sets out the underlying philosophy, representation, reasoning, and validation of VDT, and it concludes with suggestions for future research on computational modeling for organization design to extend the frontiers of organizational micro-contingency theory and expand the range of applicability and usefulness of design tools for project organizations and supply-chain networks based on this theory.

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