Organizational planning is concerned—in management jargon—with the duties, responsibilities, authority, relationships, and personal requirements of positions. This kind of planning harnesses and legitimizes power. It also helps to contain illegitimate power. To be sure, an organizational plan is restrictive. In fact, all managing processes are restrictive, for their purpose is to guide people’s efforts toward effectively attaining the objectives of the group, and in a sense all guidance is restrictive. If people are to pull together rather than work at cross-purposes, some harness is needed—and better a planned harness than a tangled one. With a soundly developed system of management and good leadership, high-caliber people will work productively and with zest despite the restrictions of the organizational plan and the other system components.
In business as in government or any other field, able people just don’t want jobs with inadequate or unclear authority. It is our conviction, based on observation of executives at work and on hundreds of confidential interviews with executives at all levels, that any high-caliber man’s effectiveness, job satisfaction, and zest for work—from the time he takes his first job until he retires—are all vitally affected by the structure of the organization in which he works. And there is a structure whether it is a haphazard tangle or the product of a formal organized plan.
The results of organizational planning are pictured in organizational charts, with their boxes and lines of authority. But organizational planning really deals with the actions, ambitions, emotions, and personal effectiveness of people. Whether or not the actions of individuals are effectively harnessed to achieve the purposes of the business depends largely, we believe, on how well the plan of organization is fashioned and how resolutely managers at all levels follow it themselves and require others to do so. The boxes and lines on charts are merely symbols of plans that, as part of the management system, help to require and inspire purposeful, productive decisions and actions.
Even a perfect organizational plan won’t control all the imperfections of human nature. But a defective plan can be counted on to bring out the worst in people and to raise costly havoc in the organization. Business executives, like generals and educators, often engage in infighting, and businesses, like all other organizations, have their political camps and cliques. These reflections of the mean side of human nature frequently originate from a defective organizational structure. At the very least, such a structure stimulates and facilitates infighting and politics.
In the rush to implement a new organizational design, many leaders fall into the trap of going live without a plan to manage the risks. Every organizational redesign carries risks such as interruptions to business continuity, employee defections, a lack of personal engagement, and poor implementation. Companies can mitigate the damage by identifying important risks early on and monitoring them well after the redesign goes live.
Clear leadership account-ability for developing and executing risk-mitigation plans is so important that this should be built into regular appraisals of managers. In our experience the most successful organizations combine stable design elements with dynamic elements that change in response to evolving markets and new strategic directions. Corporate redesigns give organizations a rare opportunity to identify the stable backbone and set up those elements ripe for dynamic change.