How Organizational Design Drives Delivery

Why does a soccer team have 11 players?

During a recent conversation about the FIFA World Cup, Smith School of Business professor Matthias Spitzmuller’s son asked the question. Despite having played the sport since he was six years old, Spitzmuller had never thought about it, and could not come up with an answer. “We often take the structure in which we are operating as a given,” he said during a recent Smith Business Insight webinar called Designing an Organization that Delivers. “We don’t reflect much about it, and we don’t question it.” 

But the way an organization is structured and organized can have a profound effect on what gets done and how well its people perform. That’s why Spitzmuller believes it is incumbent on leaders to give organizational design some real thought—even if it means asking some tough questions. “Organization design doesn’t just happen,” he said. “It is the product of strategic decisions and choices, and this takes leadership.”

In the hour-long webinar, Spitzmuller unpacked several effective organizational designs, explored the tension between autonomy and structure, and offered insights into how leaders can create environments where teams, tasks, processes and culture all coalesce into something powerful.

Read on for three takeaways.

Takeaway #1: “Both/and” thinking benefits everyone

Spitzmuller often asks business leaders whether highly centralized and hierarchical organizations, or highly decentralized and flat ones, deliver more effective results. The prevailing view is that neither extreme is optimal, but rather a model that falls somewhere between both extremes.

Yet when he asks the same leaders what type of design best supports their individual productivity and workplace efficacy, the responses skew more towards environments that encourage and support individual actions.

Why? Because, as Spitzmuller explained, humans tend to want autonomy (and there’s evidence to suggest they perform better when they have it), but they tend to need structure. This creates a “fundamental tension” at the core of many operations. “We need structure to make organizations manageable, but at the same time, we have to find ways to affirm individual needs for autonomy.” 

It might seem as if these different camps are at odds with one another, but Spitzmuller said the best organizations incorporate both—integrating elements of autonomy and creativity without negating the need for structure. “These don’t necessarily have to work against each other,” he said. “We should not be thinking so much in terms of either/or, but rather both/and.”

Takeaway #2: Congruence unlocks results

There’s no one blueprint for successful organizational design, in Spitzmuller’s view.

He used the example of Valve, a Seattle-based developer of immersive video games that has attracted a great deal of attention for its extremely flat organizational design. It employs no traditional managers and employees are free to decide what they want to work on every day. It’s not total chaos—the company is meticulous in hiring individuals with the skills and temperament to thrive in a highly autonomous environment and regular peer evaluations reinforce accountability—but it is, for those who are accustomed to more rank-and-file workplaces, an unexpected way of operating. “This is an organization that has been extremely successful without any predetermined structure,” Spitzmuller said.

But the flat hierarchy is not necessarily what makes Valve work so well, according to Spitzmuller. “I think why the organization has been so successful is because it has a perfect alignment between four different elements of organizational design: critical tasks, culture, structure and people.”

Practically, Valve’s critical tasks (creating immersive worlds that players get lost in) mesh well with its culture (affirming personal freedom and autonomy), which complements its organizational structure (essentially, operating without one), which attracts people who are motivated self-starters. That congruence matters far more than the specifics of the model, Spitzmuller explained. 

“Think about your own organizational design in terms of the tasks, the structure, the people and the culture,” he said. Is the formal structure well suited to the complexity of the most critical tasks? Do team members have the right skills and orientation to execute on what the organization needs most? The answers can help identify mismatches and point to potential courses of change. “Asking these questions can give you some impetus and some ideas for how your organizational design could be changed,” he said. 

Takeaway #3: Leaders shouldn’t rush structural change

As anyone who’s ever had a really terrific boss can attest, individual managers can have a remarkable effect on performance. But, as Spitzmuller explained, even the most inspiring and motivating boss can’t make up for faulty organizational design. Sometimes, fundamental structural changes are needed—and it’s the job of a good leader to look for them. “We oftentimes see issues as interpersonal problems when they have a structural foundation,” Spitzmuller said. “I think it’s dangerous for leaders to think too little about structure.”

But that doesn’t mean that leaders should rush to change everything when they do identify cracks and flaws: “There’s a temptation, when you have recognized that this need to change exists, to want to move too fast,” he said. That’s when you see leaders do things like hastily reinventing processes or introducing a radically different culture—and “dramatically overestimating” the speed at which employees can respond to change. “It takes 12 to 18 months for us to process large-scale change in our lives, yet organizations expect us to respond to changes within a few months,” Spitzmuller explained. “Don’t expect employees to adjust immediately. Think about the vector: Moving into the right direction is far more important than coming to the end point as fast as you can.”