Creating An Organizational Design Consulting Firm for the 21st Century
A note from the author (June 2016): Since publishing this article nearly 11 months ago I’ve had the opportunity to join and help build a new company, The Ready, that has brought to life many of the ideas I share in this article. We aren’t perfect (no organization ever is) but looking back after nearly a year of helping build this new company I’m struck by how closely what I wrote here actually describes the work we do and how we do it. It’s gratifying to realize this idea I had for what I thought was a fictional company is actually something that exists in the world today. Here’s to another year of moving closer to, and beyond, the vision I share below.
I had been on the lookout for a company like Undercurrent for many years, was aware of Undercurrent for about a year, courted Undercurrent to hire me for about 8 months, and worked for Undercurrent for three weeks. Ever since its demise I’ve been thinking a lot about what the next truly influential organizational design consultancy of the 21st century should look like. Undercurrent wasn’t perfect but I think they were doing a lot of great and new things along that path. Now, there’s a huge gap in the market for a company to rethink what it means to do organizational design consulting. Given the state of the market, here is my opinionated take on what a company who wants to be the next big thing in the world of organizational design consulting should focus on.
The organizational design consultancy of the 21st century is essentially tasked with helping organizations navigate a world that is rather hopelessly unpredictable, chaotic, and exceedingly quick to change. Organizations are increasingly relying on people who are highly-trained, expensive, and creative who likely have many job options and an increasingly greater expectation to be given opportunities to do meaningful work. These organizations need to become more like living, evolving, learning, and resilient organisms or networks and less like top-down, oligarchical, and brittle machines. They need to be able to make things happen quickly and entice their expensive talent to stick around while bringing their entire creative and motivated selves to the audacious challenges they face at work. Simple, right?
I believe we are seeing the limit of the gains pure organizational restructuring can accomplish. In a company where physical products need to be created and moved from place to place there’s much to be gained from restructuring organizations to amplify efficiency. In a world of knowledge work the key competitive advantage resides more in the ideas of employees and the ability to bring those ideas to fruition quickly. The growth of self-organizing principles we are seeing many companies adopt today is merely the initial forays into a tectonic shift looming in the near future.
How do you prepare for that?
How do you cut through bureaucracy so your most motivated employees feel like the organization is there to amplify their good ideas, not cover them in bureaucratic leeches until they are bled dry? How do you create an environment that facilitates the highest level of performance from employees not because you’re standing over them with a stick or dangling a carrot in front of them but because you are giving them opportunities to exercise some of their most innate desires — to do meaningful work in a supportive environment? How do you create a culture of knowledge workers who view themselves as craftsmen/women on a path of increased mastery over time where personal development and professional development go hand in hand? Oh yeah, and how do you keep making money so the company continues to exist?
The organizational design firm of the 21st century will necessarily have to be selective about the types of companies they work with. The consulting firm who gets this right will not only select the companies who obviously “get it” but will be able to teach and convince those companies who are tottering on the fence between a more traditional way of viewing business and the more responsive, humane, and ultimately more successful way of working.
This may sound fluffy and overly “soft” but I wrote all of the above with the goal of the company’s economic health front and center in my mind. In a world where a company needs to grow and evolve like a living organism it is unreasonable to expect it to thrive when its individual parts are being damaged, restricted, or poisoned. A healthy organism has healthy internal components and a healthy sensory system that allows it to navigate it’s world. Organizational design in the 21st century will be all about the care and feeding of that organization — both internally and helping guide it through it’s ever changing world.
The organizational design firm of the 21st century is going to have to actively work toward resolving (and even embracing) a set of paradoxes internally (with its own existence) and externally (with its clients):
- Long-term perspective vs. short-term focus: As a company how can you break outside the market-driven forces that encourage a short-term focus on economic outcomes in order to make long-term decisions for the company’s health? How often do companies that claim to be trying to tackle problems of truly epic proportions get sidetracked by the next quarterly earnings call? At the same time, can you have a truly long-term focus but also adopt a mindset of constant iteration and rapid short-term sprints toward a goal?
- The power of scale vs. the power of the individual: Software has unlocked the possibility of complex data analysis in a myriad of domains. At the same time, organizations are comprised of individuals. How do you embrace and understand scale while also embracing and respecting the individual (employee and customer)?
- Being responsive vs. being proactive: To what extent should an organization be able to respond to the rapidly changing external forces it faces versus to what extent should organizations focus on creating the environment in which it resides? Can an organization be reactive and proactive?
- Using data vs. embracing humanity: Is it possible to both be data-driven and also in touch with the “humanity” of an organization? To what extent can or should data be used when talking about meaning, motivation, and inspiration of human beings? How can an organization find useful avenues for data and an understanding of the “softer” aspects of an organization?
In addition to these paradoxes, I think there are a few foundational questions that this new type of consulting firm should obsess over asking:
- To what extent can we help organizations enhance the psychological & human resources they already have to meet the challenges they can’t even predict?
- To what extent can we help organizations identify and tweak their components (team dynamics, environmental factors, culture etc.) in a systematic and holistic way to drive positive change in how they function?
- To what extent can we identify points of friction in the way an organization works and then offer truly foundational advice about removing that friction, not just treating the symptom of that friction?
What will the organizational design firm of the 21st century actually sell? What will be delivered? How will impact be measured? I think it goes without saying that every client engagement would be a highly unique and specialized affair starting with an intense discovery and sense-making effort. What’s next?
A few ideas:
- Coaching around “new ways of working”: On a one-on-one basis across the entire scope of the organization, from executive, to managerial, to front-line workers there could be coaching on new ways of working. Coaches would emphasize the habits and behaviors that allow individuals and organizations to work more effectively (i.e. anti-procrastination techniques, self-leadership strategies, the development of psychological capital, etc.). A good coach should be able to help individuals develop the meta-cognitive skills and self-reflective behaviors that can drive long-term habit change even after the coaching engagement ends.
- Embedding teams/individuals within organizations: Consultants would shadow teams and individuals within the client organization. While this would provide opportunities for formal coaching sessions or workshops, it would also allow for a much more nuanced understanding of how things actually get done in an organization. With that more nuanced understanding the recommendations and interventions could be much, much, smaller, accurate, and simpler. I believe many of the friction points that exist within organizations are so embedded or subconscious that they never appear during interviews or surveys. Only by embedding into an organization will these friction points become visible, and therefore addressable.
- The setting and behavior change facilitation of strategy: Strategy consulting is not new. Helping leadership teams articulate and set strategy is a time-honored role of consultants. However, I view this 21st century organizational design firm taking it a step further and pushing, facilitating, and evaluating the action/behavior change that should emerge from a strategy session. What are the behaviors that should change based on our strategy and to what extent can we as consultants find avenues to help people (leadership and otherwise) practice these behaviors?
- Organizational development: This new firm will have to be adept at all the more traditional outlets for organizational development (and perhaps this is where some specialization may occur across the industry). Hiring, culture change, compensation, onboarding, physical space … the list of possibilities is long. In each case, this firm should be able to both dive deep into the latest and best organizational psychology, sociology, industrial psychology, and other relevant academic fields, make sense of what is useful, and then carefully bring that knowledge to bear on the stated problems of the organization.
- Organizational re-design: There are new ways to organize companies and the organizational design firms of the 21st century need to be able to facilitate the adoption of those new ways of organizing if that is what the client wants or seems to be the best approach to improving the client organization. These can be self-organizing principles or wholesale adoption of systems like holacracy or Spotify’s guilds. No system is a silver bullet and the organizational design consultants of the 21st century will both build our understanding of the contexts in which these systems work (which is an area of knowledge we are woefully lacking) and accurately facilitate the development of these systems at the appropriate time and in the appropriate situation.
No consulting firm is doing what I just laid out — not even Undercurrent at its peak. From what I can tell there are some firms that are trying to do bits and pieces of it but nobody has really made a concerted effort at uniting it into a cohesive whole. The opportunity to embrace the uncertainty of this new type of consulting and possibly be the early dominant force is truly staggering. It’s going to take people who aren’t wedded to an old style of organizational consulting or design consulting or anything else that may poke around the edges of a true organizational design practice.
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