The fundamental principles of organisational design

© 2010 - 2020 The Adjacent
The fundamental
principles of
organisational design
Things for every leader to think about
#coherentevolution, #complexity,
#organisationaldiagnostics #designingchange
All slides in this presentation are available for use under Creative Commons
Attribution-NonCommercial-NoDerivs (CC BY-NC-ND) license. Attribution of
work is to follow the following marking format:
©2010 The Adjacent, used under a Creative Commons
Attribution-Noncommercial-Noderivs license

Doug Talbot
● 30 Years Software Builder
● 15 Years Technology Management
● Founding Partner - The | Adjacent
Editor
@douglastalbot
@douglas.talbot
Accreditor
douglas@theadjacent.co

Organisational Design - Agenda
● Background & Going past Agility
● Evidence collecting
● A Model to make sense of it all
● Acting in Complexity
● Diagnosis - What state are we in?
● Prioritising where to work
● Designing an intervention
3

FDD2005 Architecture &
Developers
TDD &
BDD
Feature
Squads2008 Delivery &
Flow
Leadership
Syllabus
Culture
Monte Carlo
forecasting
Portfolio
Management
HR2014
Culture, Structure,
Leadership, &
Forecasting
Organisational
change
DiagnosisStrategy
Leadership
development2018 Organisational
Eﬀectiveness
Recruitment2011
Infrastructure,
People &
Complexity
The evolution to organisational effectiveness
4

It’s NOT about Agility… It’s about Great Organisations!
It’s NOT about Practices… It’s about Leadership & Systems
alignment!
Realisations

I tried to catalogue the whole domain to help
others make sense but avoid the piles of
hearsay
Provide access to Evidence & Research Based -
Filter out Noise

A data lake to
connect
otherwise
fragmented
information

Too much
information

Change of tactics
Constructing a model
Make it really accessible and provide sense making, diagnostics,
priority and design guidance

A thought model - Synthesis
“All models are wrong some are useful!”
10

Creating the right response for your context
11
● Psychology: Psychological safety and scarcity
impact on creativity and innovation
● Complexity Theory: Exaptation from entire org
● Sociology: Dunbar’s Number & Diversity
● OKRs & Incentives with Innovation: How do BAU
OKRs create friction with innovation & collaboration?
● Delivery timelines and creativity: How do we create
creative spaces when we are under pressure?
● Wardley Evolutionary Phases: What skill sets do we
use in diﬀerent stages of creation?
● Zone to Win / Three Horizons: How do we structure
for innovation?
● Hackathons & Service Design: Teaching creativity
‘Behind the Scenes’ Illustrative Examples

Organisational Dynamics Model | Overview
12

Organisational Direction - Commitments
13

Three
Emergent
Pillars

Three Pillars - Organisation & Culture
15

Organisation &
Culture

Three Pillars - Products & Services
18

Products &
Services

Three Pillars - Efﬁciency & Quality
20

Eﬃciency &
Quality

Three Levers - Leadership
22

Three Levers - Systems
23

Three Levers - Practices
24

The synthesis layer makes the diagnostic accessible
Medium Posts Explaining the 9-Box Model
● The First Dimension: Organisation, Product, Efficiency
● The Second Dimension: Leadership, Systems, Practices
25
Nine
Dynamics

Organisational models
Heterarchy
Sociocracy
Holacracy
Hierarchy
Democracy
etc
26

Organisation Portfolio Life cycle patterns
Innovation 1X, 1.2X, 2X, 10X
Wardley mapping
● Pioneers, Settlers, Town
Planners
● Genesis, Custom, Product,
Commodity
Geoﬀrey Moore
● Transformation,
Performance, Incubation,
Productivity
McKinsey
● Mature, Growing, Emerging
The Lean Enterprise
● H1, H2, H3
27

Organisational systems
HR, Finance, Prioritisation, User orientation, Training, Innovation
28

Value stream efficiency
Flow efficiency -
Theory of constraints
Utilisation efficiency
Queueing theory -
Little’s Law
Productivity
Performance
29

Organisational Measuring
Work in Progress (WIP)
Lead time / Cycle time
Failure Demand
Culture measures
Statistical Forecasting
30

Organisational orientation
5 Orientations
Functional
Product
Service
Customer
Persona
31

People / Psychology / Anthropology / Sociology
Learning - dunning kruger
Adaptability
Resilience
Change
Motivation - Connectedness,
self-determination
Happiness
Engagement is it real
32

Culture
Purpose, Vision
Alignment
Clarity
Values
Behaviours
33

Management / Leadership
Individual
Team - Conway’s law
Tribal - Dunbar’s number
Multi-tribe
34

Organisational practices
Systems thinking, Cyneﬁn, Theory of constraints
35
The Cognitive Edge method is ©2012 Cognitive Edge (USA) Inc.,
used under a Creative Commons
Image from Infoq.com https://www.infoq.com/articles/teams-teamwork-trends-2020/

Ology, Frameworks and Practices
36

Organisational design bad habits
Not evidence-based > What I feel happy with
Not seeing the whole > Focussed on a silo
Not dealing with complexity > Assuming the answer would be one thing
Not targeting highest value > Acting in low-value places (safest)

Coherent Evolution
How to design for Complexity

Bad ways - Cookie cutter + disjoint
39
Big Bet Transformations
(SAFe, Digital, Agile, Culture)
Fragmented Response
to Symptoms

So many interacting layers!
All of these-and more-impact behaviour
● neuroscience
● hormones
● psychology
● culture
● incentives
● systems
● processes
● trust
Theme: Categorisation
40

See the whole, where to operate?
41

Hopefully
everyone knows
Cyneﬁn!
The Cognitive Edge method is ©2012 Cognitive Edge
(USA) Inc., used under a Creative Commons

Coherent Evolution
?
43
Our
Awesome
Organisation
?
?
?
?
Internal
Complexity
External
Complexity

Diagnostic / See the whole
How are we doing?
What are our next best options?

“How are we
doing?”
Need repeatable
structure and data
Subset of Question Bank
(Product & Services within
Leadership & Systems)

“How are we
doing?”
Need repeatable
structure and data
Service Design Rubric
(Digital Leadership,
Strategy, and Systems
Alignment)

“What should we
do next?”
● Spotting the places
to focus
● Asking? Gemba?
Assessment Output
(Detailed output on each of
the nine organisational
dynamics)

“What should we
do next?”
● Spotting the places
to focus
● Asking? Gemba?
Assessment Output
(Facilitated discussion with
team members.
Lighter-touch assessment.)

Prioritise
Which way to place our bets?

No right answer - Equiﬁnality
50

Two Implicit Orderings
51
Extraordinary organisations need leadership to create systems
in which the awesome practices thrive
Extraordinary organisations can innovate great products and
then optimise for great delivery

Change priority & Friction winner
52

53

54

Organisational Dynamics
Usable heuristics for working with organisational dynamics
Organisations TEND to focus on Eﬃciency & Practices:
● Upside: These are easy to see, work with, and measure,
quick to eﬀect
● Downside: Only creates temporary improvements or
require continuous investment if the systems and
organisational design are not aligned.
Organisations SHOULD focus on Leadership & Org.:
● Upside: Changes at the leadership/organisation level
changing structural or systemic constraints enable
organisation wide progress and self maintain once
established
● Downside: Leaders often resist this work, as it makes
interventions hard to negotiate and implement and it takes
time, too hard, too scary.
55

“Let’s map story points”
56

“Let’s map SCRUM”
57
SCRUM

“Let’s map test automation”
58
Dev
Utilisati
on
Test
Delivery
Date

“Let’s map sales incentives”
59
Incentive
Limit
WIP
UR
UX

“Let’s map OKRs”
60
OKR WSJF

Intervention Design
Systems thinking, Complexity, Coherent Evolution

No right answer -
Bi-directional causation in intervention design
62

Analogy: How would you address knee pain?
63
Knee
IT Band
Glutes
Running
Posture
Stretching
Strength
Training
Workout
Routine
Medication
Personality
Level of
Discipline
‘How much
it matters’
Running
Goals
Work/Life
Schedule
Other
Where is
the issue?
How might you intervene?
Other
What factors would you
consider?

No right answer - Next Adjacent? Coherent?
Functional / Waterfall -------> Scaled Agile
Hierarchical -------> Learning Organisation
Improve efficiency -------> Do a value stream and pick one element
Improve efficiency -------> Learn about flow efficiency -------> Pick
one value stream to try Limiting WIP and pull system
But get HR and Finance and PMO on side
64

Intervention - We want more innovation!
65
Leader/Organisational
Designer
Money
motivates
Creativity
Image created in the very cool LOOPY
tool which is made by Nicky Case

We want more innovation! Loopy?
66
Teachable
Create training?
Diversity supports creativity
Team composition? Recruitment?
Biased to luck
So incubator, outsource or everyone?
Safe to fail space
Leaders create autonomy?
Overburden / Scarcity hurts
WIP limits, Time allocation,
timesheeting?
Scarcity hurts
Make it part of performance
assessment?
Growth mindset
Make one of our values learning?
Transient
So easy access to ﬁnance?

Intervention - We want more innovation!
67
Leader/Organisational
Designer
Creative
types leave
Less
watercooler /
more secrets
Unhappy
people
£££££
recruitment
People
leave
Loss of
ideas
Most
don’t
win
Image created in the very cool LOOPY
tool which is made by Nicky Case

No right answer -
Quantum Yoyos
When you’re designing
your interventions, realise
that your intervention will
have eﬀects that you’ll
want to accelerate and
dampen. Yoyoing is natural
and the key is
probe-sense-respond.
This is why you can’t rely
on Big Bet Transformations

No right answer - Tradeoff Dilemma
Innovation OR Optimisation
Innovation OR Business as Usual
Innovation OR Quality
Innovation OR Sales now
69

Not a senior leader or can’t change high-level
Organisational Dynamics? Don’t despair, you
can:
● Use Organisational Dynamics within the
teams you manage
● Surface ideas to progressive leaders you
work with
● ‘Be on the lookout’ for dysfunctions
from the larger systems you’re a part of,
and consider how you can interact with
them
How to operate as a leader/designer
70
If you would like to take a short and free diagnostic for your team or
organisation, contact me at douglas@theadjacent.co

Remember what we need to be
doing as leaders

All leaders must be
Organisational Engineers - A new career
Design for an extraordinary community
Design for clear organisational priority & customer needs
Design structure and systems for eﬃciency & quality
72

All leaders must be Organisational Engineers
73
Organisational Engineers - a new career
Design for an
extraordinary
community
Design for clear
organisational priorities
& customer needs
Design structure and
systems for eﬃciency &
quality

Organisational
Engineers
● See the whole
● Design the whole

Organisational Engineers - Learners
Create an extraordinary community
● Drive, Laloux, Hackman, Senge, Schein
Make organisational priority & customer needs clear
● Wardley mapping, Cost of Delay, and Service design
Optimise structure and systems for eﬃciency and quality
● Flow eﬃciency, Forecasting, eXtreme programming
75

As a supporting coach / leader you need to
understand the scope of organisational
engineering / designing and assist other
leaders to join you in understanding.
7
6

Q&A
Douglas Talbot
Founding Partner, The | Adjacent
douglas@theadjacent.co
Editor@douglastalbot
@douglas.talbot Accreditor

The fundamental principles of organisational design

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