Organization Design &
Organizational DNA
Just as you can understand an individual’s personality, so too can you understand a company’s type — what makes it tick, what’s good and bad about it. At Booz & Company, we take a holistic view to an organization, considering its traditional corporate operating models to the formal and informal elements that impact its success.
Service Offerings
Organization Design & New Operating Model: Organization design is tightly influenced by the company’s strategy and its people and culture. First, you must determine the right role of corporate (or headquarters) for your business. There is no “one model fits all” — but rather a range of models with progressive degrees of corporate or headquarters’ involvement:
- Financial Holding Company - Create and enforce a disciplined management model
- Strategy and Oversight - Add value in the linkages between business units
- Active Staff Involvement - Provide guidance to business units via expertise
- Operationally Involved - Make key decisions for business units
The right answer for you depends on the relatedness of the businesses.
Next, you need to determine where to put each element of the corporate center’s work. Should they go to the business units, outsourcing, elimination, to a strategic partner, or to a Shared Services group? While there are no simple answers, there is a good place to start — a sliding scale of key questions:
- Is it needed for governance, consistency or fiduciary responsibility? If the answer is yes, then the responsibility clearly lies with the corporation. If not:
- Is it a core capability? If yes, it belongs in the business unit. If no:
- Do business unit customers need the service? If no, then it can be eliminated. If yes:
- Does it provide a competitive advantage? If yes, it belongs in the business unit. If no:
- Can someone else provide the same service cheaper or better? If yes, then it should be outsourced, or go to a partner. If no:
- Are there demonstrable economies of scale? If yes, it should be turned over to a Shared Services unit. If no, it should be embedded in the business units that need it.
Organizational DNA: Why is it that some organizations can bob and weave and roll with the punches — consistently delivering on commitments — while others can’t leave their corner of the ring without tripping on their own shoelaces? To answer that question, you have to look beneath the surface at the organization’s DNA. Organizational DNA is a metaphor for the underlying factors that together define an organization’s “personality” and help explain its performance. Organizations fall into seven company types (e.g., Passive-Aggressive, Fits-And-Starts, Outgrown, Overmanaged, Just-in-Time, Military Precision, Resilient) and we provide insights on how to keep what’s good and fix what’s wrong.
The distillation of years of experience studying how companies organize and execute, the Organizational DNA Framework was developed by Booz & Company to give organizations an easy, accessible way to identify and remedy the roadblocks that impede results. We take a holistic view to an organization, considering the formal and informal elements that make up its existence and impact its success.
The four pairs of Organizational DNA Building Blocks include formal and informal elements:
- Decisions & Norms - Decisions describe the underlying formal mechanics of how and by whom decisions are truly made while Norms represent the unwritten rules of how we do things around here.
- Motivators & Commitments - Motivators are the objectives, incentives and career alternatives available to employees within an organization while Commitments are the unwritten aspirations that drive and motivate people for the organization and themselves.
- Information & Mindsets - Information describes how performance is measured, activities are coordinated, and knowledge is transferred while Mindsets describe the deeply held beliefs that employees apply when processing information.
- Structure & Networks - Structure represents the formal organizational model, including “lines and boxes” while Networks are informally connected groups of individuals used to communicate, make decisions or obtain support.
Research shows that enterprises fail at execution because they go straight to structural reorganization and neglect the most powerful drivers of effectiveness — decision rights and information flow elements. Our work has shown these two traits are twice as powerful in driving organizational effectiveness. All of these areas need to be addressed together to ensure success.
If you would like to diagnose your organization’s DNA, please visit our Organizational DNA Profiler®.
The Katzenbach Center: The Katzenbach Center focuses on the development and application of innovative ideas for organizational culture and change, based on a guiding philosophy of client-based innovation. The Center promotes new thinking on achieving breakthroughs in higher performance, developed through active collaboration with clients and thought leaders around the world.
Organizational culture empowers and challenges companies in today’s business world. A culture that supports strategic and operational goals can fuel performance and spark innovation and differentiation. If the culture opposes the company’s strategy, however, the results can be disastrous. Many business leaders understand that culture plays an important role in their businesses, but most have difficulty understanding how to use culture to improve performance.
We believe that it is best to work with and within an organization’s existing culture. By focusing on useful elements of the existing culture, leaders can identify key behaviors that will bring them closer to their cultural aspirations. A culture intervention program can deploy both informal and formal levers to promote these behaviors, which will shift mind-sets and drive long-term performance impacts.
For further information, please visit the Katzenbach Center.
Thought Leadership
| How To Prevent Self-Inflicted Disasters | All too often, companies unintentionally create their own worst crises. With a little awareness of your organizational DNA, you can avoid that fate — and the headlines that go with it. |
| Eat Your Peas: A Recipe For Culture Change | The methods used by celebrity chef Jamie Oliver to promote health in a West Virginia city can also be used to raise organizational performance. |
| Stop Blaming Your Culture | Start using it instead — to reinforce and build the new behaviors that will give you the high-performance company you want. |
| Unleashing the Potential of Pride Builders | Nearly all companies have some master motivators — what we call “pride builders” — at the front line who able to achieve exceptional performance with their teams by fostering pride in the work each team member does. |
| The Four Bases of Organizational DNA | Trait by trait, companies can evolve their own execution cultures. |
| Leading Outside the Lines | Every enterprise has an informal as well as a formal organization. The case study approach reveals how top organizations balance both formal and informal elements to achieve outstanding results. |
| The Work of Teams | Teams are a flexible and efficient way to enhance organizational performance. Yet today’s business leaders consistently overlook their potential. |
| The Secrets to Successful Strategy Execution | Ranked by HBR as a Top 10 must read on strategy. Research shows that enterprises fail at execution because they go straight to structural reorganization and neglect the most powerful drivers of effectiveness — decision rights and information flow. |
| Exercising Common Sense | Ten critical factors — from setting aggressive targets to balancing the need for new capabilities with the need to cut costs — can prevent common mistakes in major change programs. |
| The Right Fight | Counter to conventional wisdom, a leader’s time is not always best spent trying to help teams make nice and get along. It turns out that a certain amount of healthy struggle is good for organizations. |
| Putting Headquarters in Its Place: A Lean, Global Corporate Core | This perspective addresses the challenges of organizational design and proposes a new approach to organizing senior management around the Global Core. It presents four models for this new view of senior management, drawn from our own consulting experience and the firm’s study of hundreds of other corporations. |
| Keeping the Weight Off: Sustaining Cost Reduction Over the Long Term | Traditional cost-cutting programs only address an organization's structure and overlook the other aspects of Org DNA that affect costs: decision rights, information flows, and motivators. |
| The Dominant Genes: Organizational Survival of the Fittest | Organizational success hinges on effective execution, and effective execution is a matter of ability and agility. Our research shows that there are two key levers to pull in building an able, agile organization. |
| Innovation's Org DNA | Innovation — the ability to define and develop new products and services and deliver them to market — is the fundamental source of value creation in companies and an important enable of competitive advantage. |
| Headquarters: Irrelevant or Irreplaceable? | For years, the prevailing wisdom has dictated a lean, mean corporate core. There's nothing wrong with this logic, but the implied premise that "bigger means bloated" is also faulty. |
| The Matrix Reloaded | Consumer packaged goods companies that master the matrix organization enjoy a competitive advantage that is powerful, sustainable, and highly adaptable as market and company priorities change over time. |
