How my students learn organization design

When I was a consultant, many managers remarked to me that they had never had any training in organization design.

They learned the stuff while doing it.

I am all in favor of learning on the job.  But I don’t think it hurts with a bit of preparation. Particularly when you consider the failure rate with regards to strategic decisions, including those made during reorganizations. It is estimated at 50% (see my article on Linkedin for a summary of some of the research in this area).

It’s not surprising that managers lack training in the area.

Even those who have been to business schools may not have been exposed to the topic. In most business programs, it usually receives little attention. Organization design is (at best) tucked away in courses such as strategy or organizational behavior, and 

So I have for several years been thinking that organization design deserves a dedicated course.

I proposed this to my university last year. In June this year, I was finally able to launch the new course (you can see the course description here). It is an elective in a 2-year master’s program. It is taught as one module during a 3 week period.

In preparing the course, I spent a lot of time developing cases and exercises.

My university has a “student active” learning philosophy, which I fully support.

This means that professors should engage the student in problem solving instead of doing traditional lecturing (particularly at the master’s level).

I divided the class into groups of four, as you can see in the picture above.

At the beginning of the course, they received an “information pack” about a small software firm (“Clinica Tech”) that is facing some challenges, some of them due to inappropriate organizational design (it’s based on a real client case).

The groups were asked to go through all the steps in an organization design process – from diagnosing the issues, clarifying the mission, identifying key functions, and finally proposing a new design.

When they proposed the new design, they were not only asked to draw a high-level organization chart, but to describe where they would place each of the 50 roles in this firm (and why). 

In general, my students did a great job.

During the 2 weeks, they were able to go from nothing to producing organizational designs that are similar to those developed by consultants during a real project. 

I made some observations that I thought were interesting.

The teams came up with different solutions (I include two examples below. The roles were color coded so that one can easily see which ones have been placed together).

Note that the groups had an identical starting point. They received the exact same information about the roles in the current organization and the interdependencies between different roles.

So there is an underlying structure here, and I believe, a potentially “optimal” model (given the goals, constraints, etc.). 

The students had to deal with conflicting objectives and had to take into consideration a lot of data. These challenges are quite similar to those faced by design teams in a real case.

This may in turn lead a design team to focus on some pieces of information, and neglect other pieces, potentially missing out on information that could have provided the basis for an improved solution.

I observed, for example, a couple of places where it would have been more logical – given the information that they were provided – to combine two types of roles rather than splitting them into two teams (or vice versa).

I was recently awarded a grant by my university to develop this method further.

What I plan to do is to quantify the groups’ solutions (i.e., their proposed organizational models) so that they can be systematically evaluated and compared. (In fact, a longer term ambition is to try develop an indicator (like a correlation coefficient) of the degree of “fit” of an organizational model.)

I will then use the award money to create a web site where the student teams can enter their solutions.

The web site will be open to anybody who wants to use the exercise, which means that we can: 1) compare and benchmark solutions across different universities and over time, and 2) aggregate the data in order to do research on a larger sample than would be available just from one single course.

I hope that this format can make it possible to study how teams make design decisions – and how we can improve the quality of those decisions.