Achieving maximum productivity and consistency overtime requires a great effort from the organization as a whole. And the organization’s design is a crucial element that can shape and boost outstanding results. Because organizations, like systems, change constantly and must adapt themselves to the environment, it’s highly probable that its design will shift as well at least until the company finds a good fit for an extended period of time.
Paired with each stage of organizational growth will come a particular organizational design. It is this design that can help the company move ahead to the next growth stage; or rather it can hinder that possibility.
Dr. Roger K. Allen of The Center for Organizational Design, describes the three stages of organizational growth as well as the organization’s usual design for that particular growth stage.
The “chaotic organization” operates on the border of chaos, but being problem-oriented. People in this kind of system tend to be reactive while leaders manage by attending to the pressure of the moment. As Dr. Allen highlights, “expectations, policies, standards, etc., are unclear, not agreed upon or poorly enforced.” Because of the lack of unity, commitment and follow-through processes, the good ideas and intentions are rarely carried out.
Because of these demotivating circumstances, work tends to become unpleasant for most members of the company, pushing people to act out of self-protection by blaming and criticizing others of the mistakes and negative aspects in the organization. This sets up a climate that “perpetuates fear, suspicion, hostility, and frustration.”
The main problems of this organizational stage and consequent design are: lack of routine, lack of clarity, anxiety about expectations. To move ahead to the next stage, organizations must implement formalized structures, accountability processes, and clarify policies, expectations and roles.
A stable organization is well positioned in the middle of the growth path, characterized by predictability and control. But yet, it hasn’t achieved its optimum productivity.
With structure, routine, and policies well established, the organization has managed to reduce uncertainty from its environment.
In a stable organization the goals are clear to everyone, and members understand who is accountable for which actions and tasks. Because the main focus of a stable organization is efficiency in its daily operations, people tend to be dutiful and expect fairness.
But because the organization feels in a safe position, conformity is common; and “people are rewarded for compliance rather than risk-taking and innovation.” For this reason, the organization must keep moving ahead towards a high performance stage looking further than just efficiency. Growing past stability requires the organization to prioritize innovation and development over efficiency. The purpose and mission of the organization must become a priority over doing things by the book.
Unless organizations in this stage grow, they will be left behind as customers find more responsive competitors. And to grow they need “ a long-term vision, emphasis on growth and development, and a culture in which people exercise greater autonomy in making decisions and solving problems.”
According to Dr. Allen, “the essence of high performance is shared ownership.” In this stage, employees feel like partners of the business and thus assume responsibility for its success and failures. Because of this sense of accountability, these organizations are highly participative. Their members have extensive decision-making and problem-solving responsibilities.
In contrast with stable organizations, high performance companies guide their day-to-day decisions by the organization’s mission rather than its rules and policies. And given that the mission is central to all, the organization tends to be “founded on a unique and strong culture derived from a clear set of values expressed and reinforced by its leaders.” These values continue to provide focus on what’s important while still allowing flexibility and innovation opportunities. All the internal processes are aligned with the values of the organization.
It is crucial for leaders to understand that in order to move from chaos to high performance, organizations must have a foundation of stability. “High performance requires not only participation, flexibility, and innovation, but order, predictability and control.” Processes implemented must ensure stability in order to achieve high performance.
While there is no recipe that fits all circumstances, real organizational development requires hard work. The best way to start is by providing a foundation of organizational stability that will eventually become the stepping stone and root to a high performance system.