Succeeding in business has a lot to do with assembling the right people to do the job and positioning them in a way that raises the company’s competitive advantage.
Aligning formal and informal parts of a business — management systems, structure, technologies, value stream, and rewards — so that they become capable of delivering strategies and reaching goals together is referred to as organizational design or OD in business jargon.
Importance of Organizational Design
OD aims to answer the question: what is a business’ purpose and function? It varies from organizational development, which aims to find ways to sustain that purpose and function.
As they grow and face challenges caused by evolving market demands, new business processes, and emerging technologies, companies need to constantly review their organizational structures. They also have to formulate new goals; meaning, new strategies, which are likely to shake up current structures, roles, and functions.
There’s no single “right way” to structure or re-structure a company. But one thing’s for sure, organizations must review their existing structures to avoid a toxic work culture due to confusion and conflict about new roles.
Mistrust among colleagues or between workers and management, blaming, decision-making delays, work redundancies, turf battles, and lack of ownership (“That’s not my job”) can cause unnecessary stress and even expenses.
In this blog, we list the top books recommended by experts, institutes, and leading business publications to help you better understand organizational design, the value it brings to your company, and the kind of restructure that will suit your business.
Must-Read Books on Organizational Design
1. Organizational Design: A Step-by-Step Approach (2011)
The US-based Center for Organizational Design suggests this book for a general overview of OD and how to implement it in your company. It was co-authored by organizational theorists Richard Max Burton, Gerardine Desanctis, and Borge Obel.
The book will guide you through the key aspects of OD, including goals, strategy, process, people, coordination, control, and incentives.
It contains frameworks to help you understand leadership and organizational climate as well as maneuverability. A chapter is also devoted to strategic alliances such as partnerships, mergers, and joint ventures.
2. Organisation Design: Re-defining Complex Systems (2012)
This book, written by Norwegian University of Life Sciences associate professor Nicolay Worren, is considered by the Organization Design Form as a master-level and professional reference for those who wish to more fully understand the organization design process, along with its challenges and limitations.
Worren also discusses what managers can do to handle or reduce such complexities and how to design multi-dimensional structures.
3. Structural Cybernetics (1995)
N. Dean Meyer tackles how political infighting, limited teamwork, lack of customer focus, fragmentation, slow pace of innovation, and weak strategic alignment can affect the health of the organization.
4. Organization Design: The Practitioner’s Guide (2018)
Naomi Stanford, a UK-based OD practitioner who holds OD master classes, has written six books on organizational design.
These include “Organization Design: The Practitioner’s Guide” (2018), “Organization Design: Engaging with Change” (2013), “Organizational Health: An Integrated Approach to Building Optimum Performance” (2012), “Corporate Culture: Getting It Right” (2010).
Her earlier works include “Guide to Organisation Design: Creating high-performing and adaptable enterprises” (2007) and “Organization Design: The Collaborative Approach” (2005).
5. Organizational Culture and Leadership (2010)
The role of culture in shaping organizations is the subject of this publication by renowned MIT Sloan School of Management professor Edgar Henry Schein.
The Institute of Organization Development recommends his work for executives who want to see their goals achieved through organizational-level change. Schein presents three levels of organizational culture and how companies adopt a certain culture over time.
Restructure Applications and Approaches
1. Principle-based Organizational Structure (2017)
Another work from N. Dean Meyer, this book offers guidelines for executives on how to design or re-design their organizations using the so-called “rainbow analysis.”
The analysis talks about the missing functions in an organization and how some groups or workers try to be experts at too many different tasks. It also encourages leadership teams to design and deploy their new structures.
2. Organizational Physics: The Science of Growing a Business (2012)
In this publication , Lex Sisney — CEO of the world’s leading affiliate marketing network, Commission Junction — explains how the evolution and performance of companies, whatever their size and culture, are governed by the laws of physics.
His book shows that understanding how these laws work — including the principles of integration, entropy, and adaptability — can help us get the results we want for our organization. Despite its title, reviews said that even readers who aren’t inclined in sciences or math will find Sisney’s book eye-opening and useful in planning and decision-making.
3. Brave New Work (2019)
Adopting new ways of perceiving people and companies is at the heart of “Brave New Work.” The author, Aaron Dignan, says that problems within an organization don’t lie in its management or workers but in the operating system, the long-held assumptions, beliefs, processes, and policies which constrain how people operate in general.
The book is divided into three parts: The Future of Work, The Operating System, and The Change. Dignan is the founder of OD and transformation firm The Ready, which has already helped Johnson & Johnson, Microsoft, and Airbnb in changing the way they work.
4. Reinventing Organizations (2014)
Former McKinsey & Company associate partner Frederic Laloux speaks of new organizational paradigms in “Reinventing Organizations.” He uses color to describe how people organized themselves throughout history — from red (tribal), amber (traditional/agrarian), and orange (scientific/industrial), to green (post-modern/information).
Laloux assigned the color teal (blue-green) for what he says will be the next stage of human organizational development. He said that this stage will be characterized by self-management, wholeness, and evolutionary purpose.
Organizational Design Strategies
1. Six Simple Rules (2014)
Authors Peter Tollman and Yves Morieux of the Boston Consulting Group promote a set of strategies to help managers deal with complexities of life in “Six Simple Rules.”
The first three rules of the book lay the foundation for independence and empowerment, while the other three drive people to use this new-found empowerment to work better with others. The KPI Institute says that the six rules offer solutions that leadership development programs fail to address.
2. Leading Organizations: Ten Timeless Truths (2017)
This book by Scott Keller and Mary Meaney, senior partners at McKinsey & Company, tackles the 10 most important and timeless questions business leaders must ask themselves to maximize organizational performance.
The partners came up with the questions after compiling their leadership-related articles in Harvard Business Review from 1976 to 2016. Keller and Meaney provide answers to the “timeless questions” on talent and teams, decision-making, design, as well as culture and change.
Invest in Organizational Design
With a growing number of organizational design experts highlighting the importance of autonomy and empowering individuals to help managers weather the current fast-changing market, we’re more likely to see businesses reviewing their internal structures.
Understanding organizational design helps cultivate more flexibility and a culture of learning in our respective work environments.
Every company employee must embrace and invest for upcoming changes. As a business, how are we going to transition from what we have today to what we need in the future? The future belongs to those who answer that question with the readiness to learn, unlearn, and adapt to change.