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Organizational Playing Field

This model is used throughout our work to understand the organizational dynamics that directly affect individual and team performance. We use this model to define, analyze, and change organizational infrastructure. Click on the model to explore the elements of organizational infrastructure.

— Interactive Diagram: Use Mouse to Navigate  —

Goals

Organizational infrastructure is the engine that drives performance. The GOAL element of infrastructure defines how the organization creates value that its customers are willing to pay for. The organizationís vision and mission define what the organization strives to become; the organizationís infrastructure Goal defines how it will accomplish its vision and mission. Once the goal is established, it becomes clear how to organize people, process and structure to create the right infrastructure for achieving its goal.

Without a clear value goal the organization's infrastructure will be dominated by personality and politics. Things will get done based on the strength of personality or the ability to gain top management support for your actions.

People

People — what they do and how they do it — are a key element of organizational infrastructure. This element defines the roles people play and ensures people have the ability and willingness to achieve high performance in these roles. Infrastructure institutionalizes high performance by getting the right people doing the right things.

People can be organized along a continuum from generalists to specialists. Generalists play multiple roles and must balance their time between roles. As a result generalists tend to be more innovative and creative in their approach to work, but also are prone to make more mistakes or, put in the positive, have more learning experiences. Specialists play very narrow roles and become experts within those roles. Experts tend to solve problems within their area of expertise right the first time. Henry Ford tried to push specialization to the point where people did not have to think in order to do their job.

Organizations often place different functions on different parts of this continuum. Development people in a laboratory are often placed in very generalist roles to maximize innovation and creativity. Manufacturing people may be placed in specialist roles to reduce errors and increase expertise. These differences increase performance within each function, but tend to make collaboration between functions more difficult.

Process

Process — the policies, procedures and rules an organization establishes — is another key element of organizational infrastructure. Processes define how things get done inside organizations. Processes increase performance by taking discreet tasks and organizing them into a predecessor and successor relationship to maximize efficiency.

Process can be placed on a continuum from very loose guidelines to institutional rules. Guidelines provide guidance, but allow for a significant amount of deviation. People can add, modify or delete elements of the process to make it work for them. This freedom to change processes allows for innovation and creativity when performing tasks. But operating with guidelines also increases the risk of mistakes, reoccurring problems and doing things wrong the first time.

Institutional rules allow the organization to maximize efficiency by driving out deviation within the process. Establishing compliance to the rules through a system of rewards and punishment creates high levels of compliance within the organization. Bringing a manufacturing line under statistical process control, for example, dramatically increases manufacturing efficiency. But operating with institutionalized rules creates a strong resistance to changes that are critical to organizational performance and success.

Structure

Structure — the organizing principle and distribution of power — is another key element of organizational infrastructure. Structure creates focus and control. Every structure is based on an “organizing principle” that creates focused action by breaking the organization into distinct areas of responsibility. With a functional organizing principle, for example, Research is responsible for technology development, Development is responsible for new products, Manufacturing is responsible for building products and Sales for selling the products that are built. Each organizational unit is focused on, and held accountable for, its unique area of responsibilities.

Structure creates control by distributing authority throughout the organization. A “boss” has the authority to hold his or her people accountable for compliance to roles and rules. Bosses use authority to make sure people play their assigned roles, follow the rules and remain focused on their area of responsibility.

Structure can be placed on a continuum from loose to tight. A tight structure creates very strong organizational silos with rigid chains of command. In this structure nobody can change anything without permission from someone else; the only exception being the CEO. A loose structure blurs organizational boundaries and minimizes authority and control. This is typical of start-up organizations where everybody does anything they can to make the company successful.

Results

Results — what the organization measures, recognizes and rewards — is another key element of organizational infrastructure. Establishing results sets clear priorities and provides feedback on how well the organization's infrastructure is performing.

Goals are what the organization wants, but results are what it pays you for. If an organization measures efficiency, people will give efficiency higher priority than innovation. If the organization measures innovation, people will give higher priority to innovation. An organization whose goal is efficiency, and who measures efficiency, will get efficiency.

Establishing these key metrics provides management with critical feedback on how well the organization infrastructure is performing. This feedback loop makes the organization a self-maximizing system that is constantly adjusting its infrastructure to maximize its results. But, when there is a conflict between the Goal (what people are told) and the established Results (what they are measured on) people will do what they are measured on. When management “says one thing” but measures another, it gives people a choice — and they will consistently choose to do what they are measured on.

Differentiation

Differentiation of people, process and structure creates an organizational infrastructure that maximizes efficiency. High levels of differentiation creates specialized roles that allow for development of expertise; institutional rules that drive out deviation; and a tight structure that holds people accountable for playing their role and following the rules. It places a high value on expertise, conformity and loyalty to oneís function.

Differentiation was the organizing principle of the assembly line at the beginning of the Industrial Revolution. A highly differentiated infrastructure breaks work down into focused tasks. People do not need to know why they are doing a task or the predecessor/successor tasks, they only need to do their job.

Differentiation creates a high level of efficiency by getting the right people, doing the right things at the right time. It creates a high degree of stability; nothing changes without permission. It is ideal , for example, for organizations whose goal is to be a high volume, low cost manufacturer. The down side of differentiation is its rigidity and resistance to change that often creates “turf wars” that reduce collaboration across organizational boundaries.

Right the First Time

Highly differentiated infrastructures create the ideal environment for doing things right the first time. Specialization develops experts who are more likely to do things right the first time within their area of specialization. Institutional rules drive out deviation that can lead to mistakes and quality problems. A tight structure creates high levels of control that ensure experts stay within their area of expertise and people are held accountable for conforming to established policies and procedures. In the differentiated infrastructure everything is measurable and everything is managed.

Bureaucracy

When pushed to its extreme the differentiated infrastructure creates rigid and bloated bureaucracies. If people know what their job is, they also know what their job is not. In a bureaucracy anything that is not somebodyís job does not get done until a new job is created and a new person hired — driving up headcount as increased specialization creates more and more jobs.

Institutional rules create a great deal of red tape; there is a policy, procedure and rule for everything. Productivity is reduced as people spend more time looking things up in the rule book and in meetings interpreting and arguing over the rules. The tight structure results in employees telling the boss what the boss wants to hear. This dramatically distorts communications to the point where doing the right thing for oneís function takes priority over doing the right thing for the business. This results in the organization's increasingly doing the wrong things for the business, right the first time.

Low Risk

Differentiation reduces risk for the organization. Specialization and institutional rules reduce the risk of individuals and organizations making mistakes, or making the same mistakes over and over. A tight and controlling structure reduces the risk of people operating outside of their area of expertise or not following the rules. Clear roles, clear rules and high levels of accountability reduce the risk of things going wrong or management being surprised.

When the infrastructure reaches bureaucracy it becomes risk averse. Now the organization is playing not to lose instead of playing to win. As a result the organization becomes extremely rigid and unresponsive, making it highly resistant to any change; even changes that would increase performance. Unable to respond to changes in the marketplace, the organization is likely to fall into the trap of being the best maker of buggy whips in a market dominated by automobiles.

Integration

Integration of people, process and structure creates an organizational infrastructure that maximizes effectiveness. High levels of integration creates generalist roles that requires people to be creative as they think about what they do and how they do it; guidelines encourage innovation when approaching complex situations; and a loose structure gives people freedom from their role and rules to focus on doing the right things. It places a high value on creativity, innovation and freedom from oneís function to do the right things for the business.

Integration creates a high level of effectiveness (doing the right things) by giving people the freedom to be open and honest in their communications and to approach issues from a business perspective instead of their narrow functional perspective. It creates a high degree of innovation and creativity because people have to figure out everything they do, before they can do it.This makes it the ideal infrastructure for organizations whose goal is to be an innovative supplier of leading-edge technologies and products. The down side of integration is its inefficiency. Innovation and creativity leads to a great many “learning experiences” due to the lack of expertise, rules and control.

Chaos

When pushed to its extreme integration creates a chaotic environment. This is exactly the situation that a start-up organization finds itself in. They have an innovative and creative idea, but they are so chaotic they cannot achieve the results they need to survive. In this infrastructure people must determine what they will do and how they will do it. This dual focus dramatically reduces efficiency and productivity.

Right Things

An integrated infrastructure creates the ideal environment for determining the right things to do for the business. Freed from protecting their functions, individuals can focus on being open and honest when sharing and analyzing information. Freed from rules and roles, people can be innovative and creative. This highly interactive environment creates the openness necessary to get good information and analysis, and the critical thinking needed to determine the right thing and the best thing to do.

High Risk

An integrated infrastructure raises the level of risk-taking in an organization. A start-up company, for example, has only a minimal chance of success — the vast majority fail. High levels of risk-taking create a great deal of learning. The down side is the organization often takes risk that it cannot afford to take. When it fails, so does the business.

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