The structure of an organization is not a structure at all, but a process: it is the process of getting things done. - Andy Grove
There are three types of org design:
All organizations are merely conceptual embodiments of a very old, very basic idea, the idea of community. - Dee Hock
Since the strength, even the reality, of any organization lies in the sense of community of the people who have been attracted to it, its success has enormously more to do with clarity of a shared vision, common principles and strength of belief in them, than to assets, expertise, operating ability or management competence, important as they may be. - Dee Hock
When an organization loses its shared vision and principles, its sense of community, it is already in process of decay and dissolution, even though it may linger with the outward appearance of success for some time. Businesses, as well as races, tribes and nations, die out not when they are defeated or suppressed, but when they become despairing and lose excitement and hope about the future. - Dee Hock
An organization is a collection of people working toward a shared goal. - Will Larson
Organizational design gets the right people in the right places, empowers them to make decisions, and then holds them accountable for their results. - Will Larson
Restructurings tend to be very stressful for all involved. It is best to do them less often and well. - Jim McCormick
When I have a problem that I want to solve quickly and cheaply, I start thinking about process design. A problem I want to solve permanently and we have time to go slow? That’s a good time to evolve your culture. However, if process is too weak a force, and culture too slow, then organizational design lives between those two. - Will Larson
Put teams that work together (especially poorly) as close together as possible. This minimizes the distance for escalations during disagreements, allowing arbiters to have sufficient context. Also, most poor working relationships are the by-product of information gaps, and nothing fills those faster than proximity. - Will Larson
As an organizational leader, you’ll always have a portfolio of risk, and you’ll always be doing very badly at some things that are important to you. - Will Larson
Within organizational debt, there is a volatile subset most likely to come abruptly due, and I call that subset organizational risk. Some good examples might be a toxic team culture, a toilsome fire drill, or a struggling leader. - Will Larson
Keep innovation and maintenance together. A frequent practice is to spin up a new team to innovate while existing teams are bogged down in maintenance. I’ve historically done this myself, but I’ve moved toward innovating within existing teams.5 This requires very deliberate decision-making and some bravery, but in exchange you’ll get higher morale and a culture of learning, and will avoid creating a two-tiered class system of innovators and maintainers. - Will Larson
Companies can be divided into three broad categories: transaction costs, organizational structure, and competition in the marketplace. Although these are interrelated they have very often been treated separately. In the language of the framework developed in previous chapters these can be expressed as follows: (1) Minimizing transaction costs reflects economies of scale driven by an optimization principle, such as maximizing profits. (2) Organizational structure is the network system within a company that conveys information, resources, and capital to support, sustain, and grow the enterprise. (3) Competition results in the evolutionary pressures and selection processes inherent in the ecology of the marketplace. - Geoffrey West
James March (1991) has distinguished the two tasks that are involved in firms creating new businesses and then running them successfully. One is to exploit effectively the opportunities inherent in the current situation—the basic business model the firm has adopted, the market segments it addresses, the products or services it offers, and the technology it employs. The other is to explore for and develop new opportunities. Exploration and exploitation are quite different tasks, calling on different organizational capabilities and typically requiring differing organizational designs to effect them. - John Roberts
Although exploiters do innovate, radical innovations are not the product of exploitation, but rather of exploration. Both exploitation and exploration involve searching for improvement. But exploitative search is largely conducted in the course of normal business, looking for improvements in the context of the current agenda and model or for fairly limited extensions of them. Exploration involves search over broader domains, looking for new opportunities outside the current paradigm. It necessarily involves much greater uncertainty, both as to whether anything will be found and then whether it is actually better. It fundamentally depends on slack—that resources be allocated to uses that contribute little or nothing to executing on current strategy.
The purest explorers focus completely on generating ideas, leaving it to others to select among them as to which might be worth trying to develop into businesses and then to create and run these businesses.
The difficulty is in inducing employees to allocate their time, effort, and attention appropriately among different tasks when these differ significantly in the timeliness and accuracy of the available performance measures, as is the case with exploration and exploitation.
Exploratory activity is typically hard to measure in any precise and timely way. The appropriate behaviors are hard to specify in advance, the connection between the employee’s efforts and the results that are achieved is subject to real randomness and may be poorly understood, and the actual value of the results may not become clear for a long time. Exploitation, on the other hand, is much more easily measured.