Teaching Organization Design in the Digital Age -- Session 4

Speaker A We're going to try to do it a little differently. Rather than having one presenter, we have four people. Three you've met. John Ballard is joining us for the first time. And what we're going to do is take, like each time, we're going to.

Speaker B Take three minutes, describe in full detail.

Speaker A How to teach organizational design, and then we'll try to get some discussion. Then we'll have that'll leave us a little room for discussion and hope.

Speaker C Spending by 230.

Speaker A So we just go right down.

Speaker B Sure.

Speaker D Can I ask how many people in the room already teach a whole course in organ design? Nothing but organ design? One, two, three. How many teach a course where organize 0567. How many teach a course where organ design is part of it, like strategic management? 1234-5678, 910. Great. How many want to teach a new course that has orient design in it? One, two.

Speaker B Great.

Speaker D Three. Great. I assume these are mostly on the graduate level. Let me just say a hands of those. Most of them graduate. Anybody undergraduate?

Speaker B Three.

Speaker D Okay, good. So from our organization's point of view, the Global Design Society, we are a society of some academics, some business users, a lot of consultants worldwide, practitioners of a work levels based approach to design. There are probably 600 of us worldwide, but not all are affiliated with us. We work with very large corporations, and much of it started through talent design. There's a network of 300 people that do executive search and certified executives at certain levels of capability. So that's generally who we are. We have decided, since design skills are so scarce, that every presentation at our world conferences every two years are videotaped and put on our web for free. We've also said we will give away our materials. So for anyone who teaches or design any academic, particularly in grad school, we will make any of our materials, our Elearning, our professional development, free to you. We will also make it free to any graduate students you give us a list to so it's possible to learn the concepts within about 5 hours of Elearning. We'd be happy to do that also for nonprofit managers. So we're trying to give it away. Also, anybody teaching design for commercial purposes, we will also make our resources available. So that's an offer. We're trying to diffuse.org design. It's a rare thing in the world, and we're trying to get that out. So I'll just say that again. Now, affiliates in our organization have experience teaching design in a lot of venues because it's been taught publicly since about 1975, starting with Jacks at the Levinson Institute to senior executives, five day courses. So that's a lot of years. So we have affiliates who've tried to teach it in high school. What do you teach in high school? They work in fast food restaurants and retail stores. We teach something about their roles, how fast food restaurants are organized, how to get along with their boss, what their boss's accountability. We teach them the structure of the jobs they work in. We do it at the undergraduate level. There are some, like, engineers in Argentina. There are 26 people who teach requisite in their courses in some university in Buenos Arcs or in Argentina. So there is an engineering school IPA that every engineer has to take managing your career and the organization as part of your engineering degree. Requisite organization is taught there. So we taught in undergraduate programs, master's programs, executive MBA programs. The best of them is a course in Belgium where CEOs are paired with their VPHR and come to a series of, I think two or three two day courses where they all on design, using work levels, going back with work assignments in the period one more minute. So then it goes to internal. I would just say summarizing from all of these methods. We find that executive MBA is probably the best place in a university setting to teach it. They have work experience, they already are managers, and they're likely to be capable at what we call level three, director level, moving toward general manager four. So we find that's the best place in a public or university setting inside the best way is to teach in a cascading way, the CEO and the top team and cascading with intact work groups, using our principal to do their work as they do it as the most effective way to teach. So those are a rough outline of the thing. I would just say when our consultants, and almost all of this work is driven by consultants go to hire associates. Mark, you were asking me this earlier. How do you get good people? They almost always recruit them from their clients'firms. They've trained them internally for three years. They're senior people. They know business, they know management, and they've been trained at the company's expense. And so the consultant hires them away. If you want to hire good new consultants, that's where you get them is you train them yourself at someone else's expense. I just say one more thing. We think organization design is a general management accountability. The CEO's accountability can be done well. You have to understand the organization across functions. So we think it starts at the VP level to certify people as level two manager. Level three HR person is basically certifying awareness. We don't believe they can do anything with what they learn. We think it starts at level four.

Speaker E Well, again, I'm teaching designthinking.org design. I'm teaching to the MBAs in a semester long class that is based on corporate projects for corporate clients. We're teaching in an executive education in an eight to ten week online format using some of the new platforms, which has been terrific since you can do peer review, upload interim work and share it with each other. I've been excited about that. And then we teach week long intensive executive education classes at the university for people who come in general, I find design thinking much easier to teach than strategy in many ways, because it is so intensely project based. It also lends itself to online. I mean, we are at Darden, we are big face to face case method teachers. And so it's been a revelation to us how well the project teaching methodology migrates to online. But it requires a lot of structure. So, for instance, if I think of the difference in virtually all of my classes between teaching strategy and teaching design thinking, I'm structuring the course much more intensely in design thinking because, again, because it is a new experience for most managers, there's a lot of ambiguity there's. Projects with deliverables, the anxiety and the team dynamics really get in the way unless you really provide a structure for the team processes. So we have created project field books with templates and videos. And again, just as much as our students love the idea of being inventors and creators, we find that they actually have a higher need for structure than a lot of the students that we've taught in the past. And so we've adapted accordingly to that.

Speaker B Hello, I'm John Ballard from Mount St. Joseph University in Cincinnati, Ohio. I feel like an organization in a very unstable, highly complex world. I am most in need of flexibility. I joined this panel as a discussant. I became a presenter, and now I'm a member of a panel. So it's an exciting time for me in that regard. I have a very different perspective than anything we've talked about really today, yet it ties into just about everything that we've talked about. As a consultant, I've done quite a bit of work in organizational design change as a professor. I've taught organizational design in theory for over 20 years, briefly at the undergraduate level and then at the graduate level in terms of philosophy. A few things I'm heavily influenced by Natalie Dutchman and their book on organizational architecture. I really believe they got it right. We do not do a very good job as academicians explaining what we really do know about organizational design. There's a lot of things that we could explain more. For example, we know a lot of fundamentals that if you do A, it does not mean you're going to do B or get B. But if you do A, maybe 70, maybe 80%, you will get B. So it's probabilistic knowledge. I think this is where Mark points out it's art. And I think that's where the art comes in, the architecture and the design will get you to a certain point, and then the art will kind of affect that, just like leadership moves up from management. So I think that's very important. In my case, I have found that it's easier to teach graduate students, people who are middle managers, building on the comment executive MBAs is probably the good place to do that. Here are some of the pointers that I've gotten from the years of teaching organizational theory. First of all, my own orientation to organizational theory was as a graduate student, this is really boring, this is really dry, and why do I have to learn this stuff? My reaction as a consultant in the real world was that's not a people problem, that's a structural problem, that's a design problem. And so it totally changed my orientation. So I went back to work and went back to those books and back to those readings and started reeducating myself. I found that was absolutely important. So among the courses that I teach, it is the most intellectually rigorous. And I always think the students are going to find this incredibly boring like I did. And the reviews are great. They love it because it is challenging and we relate it to the real world quick. In terms of the courses that I teach, the graduate level things, I found our students have implicit assumptions. You're sitting there right now with implicit assumptions on how to organize. My first class after the syllabus and introduction is an exercise called Organize to Survive. If you're interested, let me know. I'll send you a copy. But we put them on an island. They're tigers and there's 50 people and they have to survive. And they go at it. And I guarantee you that when survival was on the TV in the United States, they all had tribal councils. So it really depends a lot. You see media influences on these things. And as one person, I'll commented earlier, you don't have to have boxes, really. And so after they've done this and I've kind of taught, we've talked and debriefed it, I show them designs that have no boxes and we talk about some of the fundamentals and what we're going to do. I think it is important to do the fundamentals. I'm in the Chuck Snow school on that. I really think that you need that. But then, Steve, you blossom. You blossom from that into the other aspects of it and you build on those fundamentals. The most important thing. Most important thing in terms of what we do. I have them do an organizational design analysis of an organization starting at the beginning of the course, and it goes all the way through. And they continue the field on the fundamentals and what we learn in terms of contingencies and what we do from that. My most important advice would be apply, apply. Make everything real and bring it back to the real world. I will defer my discussion comments for now.

Speaker F Thank you. I'm teaching organizational design in different courses. Basically, I have three types of audiences. I have post experience students because the master of science in the Danny system is post experience. Then I have pre experience student with usually executive MBAs. And then I teach intercompany courses for people that's working in a company. And my point is that when you teach organizational design you have to design your course to fit the audience. And just to give you a few examples of that one is that when I teach the pre experience students, I use cases that's already been written when I never do that when I work with post experience students because I want to use their own cases, their own companies, that makes it much more relevant. So, just a few things. Another thing is that and I'm also on the church, no one like Josh and I think that has been underlying idea in all of what has been said that you can have design thinking, you can have art and so on. But the underlying basis I think for all of it is some kind of thing and I think if we teach things we need to have some kind of basis to be able to say whether it's wrong or right, whether it was work it may work in a probabilistic sense or it may work in a determeistic sense. I don't know what we mean. I think it'll go beyond the point if we don't teach something that is somehow theory based it could be theory in psychology, it could be theory in strategy and it could be theory in organization theory. I myself use an extended version of Galper's information processing and I think it's actually amazing how you can extend his views to culture, to information systems, to incentive systems and so on. Another thing that when I do in my teaching is that have 1 minute is to try to bring all the pieces together and that may be difficult to do that and particularly also because you have to have experience practice, as we've said many times. And therefore we have developed our expert system tools where you can actually do experimentation, you can do prototyping, and it comes from our book. And that has been a great way to teach the students, because you can do easy scenario analysis. If I change one driver, what is the effect and so on and so forth. So experimentation, prototyping, theory based target the design of the course to the audience.

Speaker A Let's open it up for questions, we.

Speaker C Have a few reading minutes. Thanks. That was a very good overview between the four of you. One of the things I've always found that I would like to test with you is the requisite organization stuff is great for layers but doesn't really tell you how to bring the boxes together and contingency theory is better than thinking about sort of how do you want to bring the boxes together. Are there other key theories that you think are important at heart of the classic MBA course?

Speaker D Just to me or I'm sort of.

Speaker C Saying there's pieces in what each of you said that I think are really.

Speaker B I think it all starts with systems theory. I mean, that is by far the most important. So everything builds off of that and all the contingencies built off of that.

Speaker C Can I push that one more? I find both in consulting and also teaching the MBAs that's great at that level, but then they still want to know, so what do I do in particular situations? And there's very little in the theory I find that takes you down to the reality. Again, if you've seen good content that's worth using to actually go from I've got contingency theory, I've got requisite organization, but now I've actually got to choose did the investment team get their own lawyers or do the lawyers sit in the corporate law function? You actually have to get to the nitty gritty, which is what many MBAs really want to know. There's no theory that I found that's useful for getting done.

Speaker F If you ask what should be a core in the MBA course that's so important, I'm agreeing with the system theory. But that is something that I do think that is often missed both in the composition design course but also in practice and the design of incentives. Because if you get the incentives wrong, the instrumentation is not working. And I've seen so many times that you design a very good organization, but for a variety of reasons. It could be union contracts, it could be all kinds of other things. You don't redesign incentives, it goes completely wrong. And so I use the famous article rewarding Steve Ker's paper as a very good and then I asked the students, can you give exams in your own organization?

Speaker C What that's happening?

Speaker F And I don't think I've ever talked to a person working in organization that couldn't give an example. So I think get some kinds of basis for designing incentives. And that is actually difficult because there could be agency theory and there could be a lot of other things that go into this motivation and so on and so forth. So if you take and say, okay, I want to teach around incentive systems, then it sort of follows up to a huge set of theories.

Speaker C But your incentives are not going to drive separation versus integration, which is what the issue that he's talking about? And Nickelodeon Warren wrote a piece out of Scandinavia and I'd give you his information. Separation, integration. And I think this cross theoretical bodies. What you have to do is have a coherent design strategy that goes from concept or design team all the way through implementation. You've got to be able to fill in those gaps where this theory doesn't have it. So what's the practical trade offs? There's lots of stuff out there about just that issue that you're talking.

Speaker D The in the requisite field, we recognize that Deming's work is totally consistent with requisite organization and there are links and the researcher who did our bibliography work for Deming and we verified that in sociotechnical we think there's probably a 95% compatibility. There's an ideological resistance. They don't like the term manager. But when you actually works. We can put them together and we know how to put it together. John Carver's governance policy governance model, we think is perfectly consistent with Requisite. It talks more about the board work. Now, your specific question about centralization are laterals. There is very good work in Jax that came out of work in complex British hospitals. That's where the very detailed lateral relationships were spelled out. But that is not good enough for Re engineering work processes, we think those can fit very consistent with Requisite and would promote them. Okay. It's the level at which they are done. So we're looking at these various approaches and finding out what is consistent, inconsistent. We find out there are high levels, but sociotech is basically plant design. Well, Requisite is for the whole global corporation and it fits within that. So I don't know if that's an answer, but you're right, there are a lot of centralization decentral issues that are difficult in any theory.

Speaker E I wonder if ultimately it's really going to be about the design of informal social networks too. In the innovation space, what we're seeing is formal structure. You're trying to get it out of the way. That local knowledge and diversity of networks. And so I haven't seen much on it, and we're certainly not teaching anything about it. But I think ultimately the questions of the construction of social networks is going to turn out to be much more important than the construction of formal reporting systems at some level in terms of achieving innovation, at least.

Speaker D IBM sponsored our last conference. They have galbraith interviewed and found a six face matrix in IBM. And our sponsor was so tied into his social media, he's a member of 50 informal sharing networks. I couldn't believe what this guy was tracking. So I know that in IBM there's something of what you're talking about.

Speaker A So I want to take it right there. I realize we're actually at the end of our time and there's another session in here in 15 minutes. So I think we should move to the informal network stage and allow some chatting as we move in and out. I'd like to thank you all for coming.