With Brexit looming and automation already firmly on the agenda, it’s clear there has never been a more critical time to examine the very fundamentals of UK businesses. And that sort of root-and-branch planning calls for one discipline in particular. Organisation design (OD), whether treated as a stand-alone function or an integral part of HR, is a long established way to ensure companies have the structures, people and practices they need to flourish.
And if you want to understand OD, one of the first people you turn to is Naomi Stanford. Author of five well-received books – most recently Organisation Design: A Practitioner’s Guide – and an internationally renowned speaker and teacher, she has worked in both the public and private sectors on both sides of the Atlantic and is at the forefront of a move to increase the understanding and proficiency of OD. People Management sat down with her – and started with the fundamentals.
How would you characterise our understanding of organisation design?
The way I explain OD to people new to the field is to think of it as similar to designing a car. A vehicle has an outer shell that is obvious to the eye (like an org chart), but to propel it forward requires many interlocking systems – braking, steering, GPS, all the rest of it. An organisation is not so different. It is a mass of interdependent systems and processes, and like a car it is not autonomous, at least at the moment. The driver and the mechanics maintaining and optimising the day to day on-road capability are critically important – and OD and leadership teams equate to those mechanics
Should we see OD as essentially part of HR?
No, because HR experience is not a fundamental discipline of OD. It is more closely related to systems and design thinking, both in a mechanistic and experiential sense. I don’t see these as HR processes or activities. My feeling is it should be with the strategy people. But the real answer is to be multidisciplinary – rather than thinking things need to be about one team or another, or ‘belong’ to a function, you start to think about people problem solving across disciplines.
So does OD have a future as its own entity?
I think it needs to find some sort of multidisciplinary future, and it will do. It doesn’t need to be a single discipline, because then you get very purist about things. And it doesn’t need to dissipate and diffuse. It’s got to be cohesive.
HR professionals can be part of that group and will bring all that wonderful expertise around workforce planning, compliance and talent. But sometimes, I think calling it OD can be a handicap. If you took out the label and just asked ‘how are we going to optimise organisational performance?’ it becomes a much more integrated, continuous review process.
Many businesses turn to OD because they want to become ‘agile’. Is that an idea you would get behind?
Agility isn’t very useful [as a term] because I think it will go the way of lean or total quality management (TQM). They’re all similar, even though experts say they’re not. They’re about how do we stay adaptable and keep responding sensibly to what’s going on? Applying a label just emboldens consultants to come in and convert people to their new cause.
A more sensible approach is to look at what we’re doing in our governance systems to make sure the organisation remains fit for whatever gets thrown at it. Years ago, Peter Drucker came up with this concept of planned abandonment, where every quarter you would ask: if you were starting up your organisation today, what would you be doing? So you look at why you’re doing things now that you wouldn’t be if you were just starting up. That’s a form of continuous review that is more useful than the idea of being ‘agile’ with its language and aficionados.
Has OD been a force for good in the public sector, and particularly the NHS, which has invested in it reasonably heavily?
In the NHS, it’s interesting that OD fosters innovation. It makes people say ‘there’s an issue here, how can we do it differently?’ You see a huge amount of experimentation. It doesn’t always work, but that’s the nature of an experiment. If there wasn’t that body of people with that role to look at doing things differently, it would be more difficult to change. Just by virtue of being there and being high profile, OD teams make a difference in the public sector. The inherent difficulty is how to measure that.
What role can OD play in overcoming some of the economic challenges we face in the UK, including Brexit?
For me, the predominant driver of change is technology because when you look at robotics, bioengineering or artificial intelligence, you can see a lot of new work is on the cards that we don’t even know about yet. It’s changing the types of capability we need in the workforce and the people-to-automation mix.
Are businesses ready for that?
No, not really. People think it’s all somehow beyond what is likely. And it’s difficult to think about, it’s complicated. But I’m not necessarily pessimistic about it – because when you shut down some fields, you are opening up other fields. It’s just that there may be a time lag between them, and the people in the field that is shutting down may not be the ones you need for the new field.
Naomi Stanford is among the speakers at the CIPD Annual Conference and Exhibition, in Manchester on 7-8 November. Find out more at cipd.co.uk/ace