Rethinking Org Design: Beyond Reorgs
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[00:00:00] Hello, y'all. Welcome back to the podcast. Oh, it is so good to be back here. We took a hot second for the holidays for me to recover from my 17th Lost voice this year. Parents, I don't know about you, but the sixth season this year I don't know what's up, but it has been crazy. I still got a scratchy, scratchy voice and a stuffy nose, so I apologize about that.
You'll have to let. Me know, I don't know me, but our friends yeah, those inside my programs. It seems like we've all been really hit hard this year. So I hope you guys are staying healthy. We're able to enjoy your holidays and I am so pumped to be back. So today we are nerding out on all things org design.
Yes. If you have been in the corporate world for. Any amount of time you have likely been impacted by the org, an org design. You have watched people go through an org design. [00:01:00] You have led your team through some sort of org redesign. And let's be honest, reorgs do not have the best track re record if you want to upset.
A lot of people walk into a conference room just saying the word reorg. That usually will do it. It's not a. Thing that we associate with, happy pleasantries and butterflies, and yet it is one of the most common tools we as leaders reach for when we want to improve how our team operates.
And for those of you guys who are new around here. Reorgs and org design. That is my background. So I spent 10 years as an org design consultant. That is my bread and butter. That is my specialty. That is what I eat. Breathe, and sleep. That's my thing. I actually went was recruited by two different companies to stand up their org design function, so their frameworks, their [00:02:00] methodologies building demand.
And I've led, gosh, I don't know, hundreds of reorgs across many different functions from little shift. To 5,000 person, call center reorgs to like digital transformations and really rethinking even how we reorg moving from like more hierarchy to pods and agile. So I know more about org design, spanning control layers, centralized versus federated than pretty much anyone out there.
It's truly something that I have been very passionate about and studied for a long time, and yet the last two or so years of me working in corporate practice and a hundred percent of my time in liberating teams, and a big piece of why I created Liberating Teams has been.
No reorgs, like you couldn't get me to tell [00:03:00] you. Your team needs to do a reorg of any kind. So why did that shift happen for me? Why am I seeing that shift happen and I feel is going to continue to happen out in the industry? That is what we're talking about today and what we are seeing people reach for instead as the better solution.
So I wanna start by talking about why do we do reorgs to begin with? What's the whole purpose of doing a reorg at its root? And that all comes back to teams struggling to execute on their strategy. They might not say it in that way, but that's how it comes down to is we have some sort of goal mission OKRs that we are wanting to hit as a team and we are struggling to do whether that be we have. Problems getting in our ways silos, accountability issues, or we maybe don't have the right capabilities to [00:04:00] execute on that strategy, whatever it may be. It comes down to how can we improve how we operate to execute on our strategy. And yet when we look at the data out there, McKinsey says 80% of reorgs fail to deliver value and 60% of them reduce productivity.
So they actually make things worse. Yikes. And that has been large, my experience with reorganizations,
And I say this from a place of on paper, the reorgs that we were doing were raving successes. Either leaders were happy, we saw slight improvements in how the teams operate. People were happy about new opportunities opening up or new capabilities they could work with. We got great results on our customer satisfaction surveys after, like people were happy.
But it plagued me. Y'all [00:05:00] I, it drove me crazy that at the end of the day, if I really thought about the amount of time, energy disruption, the negative impacts from all of the change compared with the reward the improvement. I just really didn't feel the positive trade off, and so I dug in more.
I was like, how can we make this process better, faster, more impactful? And during our time, shout out to my team and the brilliant org designs and strategists that I had the pleasure of working with. We completely revamped the org design process. It went from something that happened behind closed doors, really fuck, really focused on, spanning control and layers and roles to this.
Amazing, incredible process that was focused around those closest to the [00:06:00] work and bringing them in. These incredible workshops where they had a part in asking these deep questions and figuring out truly how do we improve the flow of work and how we're organized to deliver on our strategy.
And those closest to the work we're part of it. So many people we were able to, in a productive way, have their voices heard and get to touch the future org design for their team. It was a very transparent process. An open process like. People were happy going through the org design process. And that's something that I say with a lot of pride because most of the times when you hear reorg, it is just such a visceral thing because that's when you know all the leaders get in this closed room and make decisions about your future that you have no say in.
And oftentimes they don't make a lot of sense. Because they weren't done around the work, but around people. And so I'm really proud of the improvement that we made and how we really thought the org [00:07:00] design process. But even then. No matter how much we continue to tinker with it and adapt it and, we even did, how can we do shorten the cycle time for org designs?
'cause org designs, when you're working with large scale teams they're not short processes. They take time months. And so we talked about how can we shorten it and it just, it never quite delivered the impact when you considered all of the trade-offs. And this is when I started to have the aha that org structure shifts do not work because they're not actually changing how the team works.
So when you think of an org structure, you know that pretty PowerPoint deck or whatever it is that you use with all the sticks in boxes, it's showing reporting relationships. It's showing who reports to [00:08:00] who. It is not showing how work gets done. It's not showing truly who works with who on a day-to-day basis.
You might assume it's the team, those, all reporting into one leader, but we know that's not the case. Organizations are highly cross-functional, so it's likely that people are working with people all over that org structure and then into org structures from different departments. It doesn't show how decisions are made, who has what decision rights.
It doesn't show where critical handoffs are between teams. It doesn't show, our working norms, what our standards are, what our values are. It doesn't show how we, address feedback and conflict between teams. When it arises, it doesn't. It doesn't show any of that. It simply shows reporting relationships.
So how could we possibly shift [00:09:00] how a team works and a team's ability to execute on their strategy if we're not actually doing any changes to their day-to-day work? Their work is what drives performance. It's what drives the strategy forward, not sticks in boxes. So I like to think about structure as like the tip of the iceberg.
It's what we all see, right? It's that piece of paper we all can see. But how work gets done, truly, it's everything below the waterline. It's our teaming, it's our strategy, it's our execution. It's how we learn and adapt. It's our culture. It's what I call ways of working. So if you took that org structure and simply drew spaghetti lines all over it, [00:10:00] that's really how work happens within your organization.
It's not, you just can't possibly capture how work gets done in sticks in boxes today, and we'll talk about this as we talk about the future of work here in a minute, but. Sticks in boxes worked, in the 1990s when work was a lot more structured. We had these very specific, tight functions, these very specific roles.
You could be in the same role for 10 years and it really wouldn't change a whole lot. There wasn't teams, the, your work stayed within your function, within your silo. And so yes, shifting the structure, the people on paper. Okay. That made sense because what was on paper was largely how work happened, but that is not the case in anymore.
Our world of work that we live in today [00:11:00] is far too complex to even imagine capturing it on sticks in boxes. We don't have clean functions and roles. Functions are dependent on many other teams, many other functions. Highly cross-functional. World of Work is constantly changing. Roles are constantly changing.
It is impossible to put that on paper, and I think we know that. I think if we as organizations really thought about it, if we looked back on all of the reorgs that we've been a part of that, we say are a success because yay, we ended up with this really pretty picture and, new headcount and new management roles and new functions.
But if we really look at our ability to execute our strategy. The happiness of the team and their ability, like did this improve your ability to do your work? I think we all know that the answer is [00:12:00] no. If we really take a hard look at it.
Was that result really worth all the disruption, all the chaos in your team? The amount of time it took, the, was it worth the expense? A lot of the times we're bringing in these super expensive consultants, not. And not only that, but also the time, the resources of your own team who were having to sit in those meetings with said expensive consultants.
Was the impact worth the cost? And a lot of the times, majority of the time, the answer is no. And yet we continue to reach for reorgs. Why is that? Why is that? It's because it's what we know, right? It is because that old school hierarchical leadership is starting to sh the [00:13:00] conditioning is starting to show itself.
This is what worked in, 1990 when everything was cut and dry. That's what we've always been told to do. And now that the world of work has completely shifted and is far more complex we haven't come up with a different way. We're still being taught the same old school, management principles that we were then.
And so this is the only tool in our toolkit, and as leaders, we are supposed to be the ones with all the answers we're supposed to have control. And what structure provides? It's just that, my team isn't performing at the level I need to be. We're showing problems are coming up.
I'm just gonna go sit in a room and I'm gonna move things around on this org structure because that's something that I can see. It's visible, it's concrete, and I can make all these [00:14:00] decisions. I feel very in control of it, and then I can just push it out. And that's gonna save the day. It feels simple.
It feels cut and dry. Where when we talk about changing our ways of working, systemic change, that feels much messier. When we talk about shifting how we operate, how we team, how we execute, that's not cut and dry. Our ability to even understand that how work gets done on our team. That first step. That's even messy.
That's even scary for a lot of us. So we revert to what we know. Our team isn't stepping up, they're not taking accountability like we want it. Let's add more management layers. Let's shift their job description. Or my favorite, we're gonna, oh gosh. My team needs to be more strategic, so I'm [00:15:00] going to give them this new job description that says, here's what I expect of you, and I'm gonna give 'em six months to meet that job description.
If they don't, they're out. What? Too many errors. Okay let's just create a centralized team, A COE, who can oversee everything, core set of processes. So we're just gonna create layers upon layers of more bureaucracy for our teams to work through and make it harder to do their job. Cool.
Struggling to manage all of the incoming demands to prioritize everything. The work that your team's having to do. Or your team isn't aligned. They're constantly bickering with each other about what's the priority, pulling in different directions, no problem. Let's just create, like a strategy function.
A, a project management or a planning function. They'll take care of it. We're not gonna talk about our strategy process. [00:16:00] Why? Maybe our strategy is at the root of that, why maybe our planning process is at the root of that. No. We're gonna keep the exact same process, but now we're going to pay an entire team to oversee it.
Yeah. Okay. Team's not innovative enough. You want them to be pushing the envelope, create an innovation function completely removed from the work. It has no idea what's happening in that day to day. So now we're creating another area where they're gonna have to be taxing the people doing the work so they can get the information they need so they can go innovate on it and then shove it back down on the people doing the work.
Whatever changes they decide. Okay. Yeah. Digital transformation, oh, this is a fun one. So we're gonna go through this digital transformation. So we're not gonna change anything about how our team's actually working today. [00:17:00] We're just gonna duct tape a bunch of new functions with really sexy titles all around our team.
And that, that's our digital transformation, right? We're just gonna add new things, new functions, new roles. That sound real cool. The fancy titles everyone's talking about on LinkedIn and check the box. We've transformed and I'm being really cheeky here and I can do that because I've seen. So many teams and I've been guilty for this.
I'm I Apo. I sincerely apologize for the amount of strategy and planning functions that I created in my career. I sincerely apologize. I've been guilty of this as well. So many of us have had this thought of problem, insert structural solution here.
Because that's our corporate conditioning coming through. That is what's safe. That is [00:18:00] what's visible. That's what leaves us in control. That's what honestly a lot of the times it comes down to, it feels it promises this big new transformation. You see this pretty new org chart with the new functions and the new roles, and it feels, like this golden solution that's going to save the day. And all I gotta do is like press play and turn this org structure on and everything's fixed. But y'all shifting sticks and boxes on a piece of paper does nothing to shift how we work. Just like we talked about through those examples, you can create a strategy and planning function to oversee your strategy and planning process.
But if the process is broken, it's not gonna fix anything. You can create an innovation function, but if your team isn't innovative, if they don't have, ways of working where we've stripped out bureaucracy, where we've created psychological safety for them to be innovative, [00:19:00] if it takes six months for, any sort of idea to go through the insane amount of approvals for it to get put into production, they're not gonna be innovative.
If you bring in these fancy new roles, this expensive new talent that you think is going to save the day, but you shove them in the same system that's outdated, that is full of processes that make no sense, that haven't been updated in 20 years. Full of sign-offs and, controls and SOPs and all of this rigor that prevents them from moving or taking ownership or making any decision.
It nothing's going to change. Change happens by shifting how work actually gets done. And the thing is this isn't sexy. It's, like I said, it's so much [00:20:00] sexier to have this big org structure reveal and this is the future and you're standing in the town hall and look at how much better it is and all these things that are going to change and these new fancy functions and new fancy roles that's so much sexier to take up the ladder to your higher ups and say, look at this vision for the future.
And it's a whole lot less sexier to be like, we're gonna talk about our strategy process. We're gonna talk about how we make decisions. We're gonna talk about how we meet. It's more micro, it's smaller. It doesn't promise this massive shift, and yet the amount of change I have seen by coming into a team and doing a six week sprint on their strategy process, on their prioritization process.
It's been astronomical compared to, the six to 12 month org design where we like broke everything. We took [00:21:00] a ton of people's time, which has a cost associated with that in order to develop the org design and the shift to how they work was very minimal. In fact, many of the times we created more process, more bureaucracy, more hoops for people to jump through.
And so that is why we slowly stopped pushing the gas on the org design lever that become, came a last resort. Like I don't, I really don't think there's ever a time ever after 10 years of being an org design expert that I would ever recommend a large scale org design shift. Always. We do first, what we call work design.
How does work actually flow? How do the teams actually collaborate? How are decisions made? How do roles move work from one role to another? How does that handoff [00:22:00] happen? How do people learn together? How do they provide feedback, handle conflict together? We talk about what's under the waterline, underneath that tip of the iceberg.
And once we've actually spent our time doing our work design, then maybe we're gonna shift some roles. Maybe we're gonna talk about a capability gap. But those are small little shifts, micro shifts that happen over time, not these massive, let's blow everything up under one quote unquote org transformation.
And now for some of you guys, you're gonna start to feel this resistance bubbling up. She doesn't know what she's talking about. Or the, this org design I get I've seen it. It's benchmarked over here. It's gonna work. We need these management layers. We need this new function. We need these new roles.
It's gonna save the day. You're feeling it bubble up. I, and I'm going to challenge you here. Could those [00:23:00] things be important? Could those things, save the day? They could. They could. But is it really a resistance to what I'm saying or is it the comfort and familiarity of what you know?
Is it the fact that when we talk about work design and what's happening under the surface and how we work together in ways of working, we don't know where to start. There's a million things. Going on with our team. When you talk about those, how am I supposed to pick one? It's so much easier to do this massive org change and think it's gonna fix all of them at once.
We're talking about one time org change or work design, which is a process that happens again and again and again. I don't have time for that. I just wanna press play on this org structure shift and be done with [00:24:00] it. How am I supposed to go, tell my team that I, we're gonna save the day and everything's gonna be so much better, just because we talked about how workflows through our organization versus showing them the shiny new org chart with shiny new roles.
So I wanna challenge you, is that resistance to the concept, or is it resistance for fear of what we don't know? Because here's the thing, like I mentioned, the future of work, it's only getting more complex, y'all. It's only getting more fast paced and org design. It's gonna more and more, and more become the less right choice, the less choice that we're all reaching for.
'cause it does not move fast enough. It is not effective. It does not capture how work actually gets done today. What you are going to see teams start to move. What you are going to see these big consulting firms start to move towards is work design [00:25:00] because it actually changes how we operate and structures are be gonna come less and less and less important because like I said, there's no way you can capture how work gets done in sticks and boxes.
Teams are too complex. They're changing at such a rapid pace. So we're you've, if you've been in this like future of our conversation at all, you've seen people start to drum up like these pods, these agile ways of working, these teams that kind of come together quickly around solving a problem or doing a body of work and then dissolve.
You can't capture that on a piece of paper. So how are you supposed to fix it? With an org structure shift, there's no structure to shift. The way that you shift it is by focusing on how they work together. And it's again, not something that we do once. It's something that happens like we continuously obsess over.
[00:26:00] We're continuously looking at how we operate and saying, does this align with our strategy? Does this align with what we're seeing in the environment? What's coming down the pipeline? Are we prepared to meet those demands? And instead of these massive six, 12 month multi-year org shifts, we're doing these four to six week sprints of how can we shift this way of working to make it, 10, 15% better.
And we're learning from that. And then we're saying, okay, how can we take those learnings further? It's this continuous embedded process of identifying what's going on in our environment and experimenting with these new ways of working, and it just becomes part of how your team operates. Instead of this, oh, guys, we're going through our next new change initiative.
Somebody pull out the thesaurus so we can figure out a new word for transformation. Or reorg or whatever it is we used last time. No, [00:27:00] there's no more initiatives. There's no more fancy names, there's no more PowerPoint decks. We're getting approval. It's these, what I call like gorilla warfare changes. It's these small targeted quick sometimes messy, but they're learning experience and it's fast and it's agile and it's adaptive.
And I think that scares a lot of leaders because it's that's not something I can control. It's not something I can see. It's not something that I can take a deck up the pipeline and show them what we're doing. And yet, guys, we can go on a whole nother podcast about this. That is gonna be one of the biggest pieces of corporate conditioning that we're going to struggle to let go of as we move into the future of work.
That desire to control. The desire to mitigate risk, the desire for everything to be neat and perfectly put together and concrete and planned out. Because the world of work is moving at [00:28:00] such a fast pace, it is so complex that it's not about control and having all the right answers as leaders anymore.
It's about our ability to sense what's happening, what's coming down the pipeline, and how can we adapt and adjust and be agile to that. That's what's going to differentiate between the leaders who struggle and continue to hold on to the ways of working the ways of leading that worked in the past and the ones that thrive.
And if you're in this space where you're like, I'm curious I've considered an org re redesign. I've, i've been a part of one in the past and it didn't go my way. And I'm curious about work design and what you mean by this and how to bring this to life. Hey baby girl. I need girl. Oh, okay.
Come join us. I want a muffin. You want a muffin? Oh, that's a great idea. You get pumpkin muffin here you can have mommy's. We got a little friend join us. [00:29:00] You say Hi, Sophie. Hi. You sweet girl. Okay. But if you're in that place where you're curious about work design and what that looks like for with your team, I want to know more, I'm gonna drop the link to Liberated leader below.
This is 100%. What that program's about is taking you through the major areas of your team's operating system, how they work, their strategy, how they team, how they operate together. How they get work done together. Execution, how they actually ex like your processes how you learn and adapt and innovate together.
I walk you through every single part of those and I show you how the old school corporate conditioning has really built up. And, that will not thrive as the world of work changes and gets more complex and we shift and we talk about what do we need to be doing instead. [00:30:00] So if you're interested in the way, and this is exactly what Liberated Leader is built around, is work design. How do we take our team's current operating system, which is those ways of working our strategy, how we team together, how we execute work, how we learn and adapt and innovate.
And I show you where that corporate conditioning is. Driving how you operate your team, those processes, those ways of working, that bureaucracy, that even most of my more rebellious leaders that are more operating at the edge, that are more forward thinking you didn't even know to challenge.
And I call those out and we walk through how to shift them in your team to actually thrive in the future of work that we just talked about. That super fast paced, that super complex, that constantly changing worlds of [00:31:00] work. So we're actually able to develop a team that delivers on your strategy. Because it's not about shifting their org structure to have the latest sexiest functions and org titles of other organizations.
You're benchmarking if you want to execute on your strategy in the future of work, you have to adapt how your team's working to that new world. A team that is able to keep up with the change of pace that's agile, that's adaptive, that's innovative. Because if you continue to operate and do the same things that you were doing six months ago, your team and your organization is gonna get left behind.
If you don't have the ability to create a team that's truly empowered, not just something we're creating, paying lip service to you, but that you actually have empowered to have true ownership and decision rights, and that our thought leaders and innovative [00:32:00] thinkers, you're gonna struggle as we introduce ai.
It comes down to your ways of working, and that's what we talk about in Liberated Leader. So the next time you start to, to reach for one of those structural solutions, I want you to stop and think, what are our ways of working that touch this problem? And how can we start there?
