Sometimes you get those crisis calls: "Things are falling apart a bit here, and I don't know what to do about it." I had one of those from a client recently, and I spent a couple of hours kicking around the issues with the CEO. It became apparent that much of the organisation's pain was due to the fact that several important things had never really been thrashed out, clarified, agreed on and then put down in writing.
I often see five key things being left to find a default position, consciously or not, and this was certainly the case for my client. There was also a one new one whose importance I hadn't really grasped until then, and which was particularly salient for this client.
So here are the six elements I believe are vital for an organisation to be clear about if it wants to be effective, avoid confusion and ensure longevity.
- Purpose – there are entire books written about the importance of knowing the organisation's Purpose. My late and much-missed mate Grahame Maher took this as a starting point for his final challenge in the start-up of Vodafone Qatar, with his drive to build a PBO – or "purpose-built organisation". Purpose is the element that doesn't change through the life of the organisation, because it's the reason for being.
Despite its fundamental importance, the identification and expression of Purpose doesn't always come easily. In for-profit organisations, it can sometimes be hard to move beyond "maximising shareholder wealth". Finding Purpose is often an iterative process, before the final essence emerges. On one occasion I saw the CEO just decide and promulgate the Purpose, and that was at least a starting point for the eventual distillation of the company's real reason for being.
If I can't succeed in getting my point across about Purpose with some organisations, I often revert to describing it as "the reason you want to get out of bed in the morning" or "the reason why you bother". - Mission – there is a terminology issue here. Mission is also referred to in other terms such as vision, or big hairy audacious goal ("BHAG"). However described, it is a distillation of what the organisation is shooting to achieve over the next relevant period – usually 2, 3 or 5 years. Ideally Mission will spring out of the strategic planning process.
By its nature Mission does not have the enduring, unchanging nature of Purpose. For ongoing success, Mission needs to be reset at the appropriate interval, or in the face of significant changes of circumstances. Conversely, too-frequent resetting of Mission often leads to a loss of focus and less ability to deliver. - Story – this was the new one for me. The biggest issue facing this client was that there had been a bit of unilateral Story re-writing going on. Story in this context is the agreed lore on where the organisation has come from, and how in a narrative sense it has got to its present position. Story can have a profound impact on Purpose, and on Culture (discussed below).
It doesn't matter so much what the Story is; more that there is a shared view around it. New chapters in the Story can then be written – but only with the express knowledge that it's happening. When such turns are taken without acknowledgement, or are managed by stealth through revisionism of the old Story, organisations can hit the kind of crunch point my client had reached.
Michael Traill at Social Ventures Australia has been a great exponent of Story-telling. He has maintained and kept an up-to-date a written narrative of the SVA Story which is shared with the board and staff, and appropriate outsiders. The keeping of the Story has not hindered substantial strategic shifts by SVA, but has rather served to highlight and validate those shifts in a coherent way. - Culture – let's be clear about it: an organisation has a Culture, whether it deliberately develops one or not. The least effective Cultures are usually the ones which are created by default, through repeated behaviour patterns which are not consciously addressed. Sustainable Cultures are best created explicitly around a set of organisational values, and genuine and explicit agreements on "how we do things around here".
There is a cliché about "values just hanging on the wall", and it's true that just writing down the Culture won't ensure that people live it. But the exposition of Culture is the positive start. - Structure – this isn't just about wiring diagrams and reporting lines. Structure is a genuine attempt to be explicit about how various parts, and levels, of the organisation relate to each other. I am not preaching hierarchies here. In smaller organisations there is usually no alternative to flat Structures. Recognition of such an unavoidable result is useful to ground discussions about how career growth and development can be managed – always challenging in a flat Structure.
Larger organisations nearly always have formal structure diagrams. The most frequently missing parts are how to work across the structure rather than just up and down the lines and boxes – the silo effect. Being clear about cross-group working is becoming recognised as essential in a knowledge economy. - Roles – this is simply who does what. I see frequent friction points between chairs and CEOs about who has the right or responsibility for certain facets of operations and management. When there are cases with inevitable complexities, like "co-managing directors", or one I lived personally through with "legal director" and "general counsel", some open discussion and clear delineation are essential.
The whole process – getting clarity embedded
The overall process which stands behind sorting out these issues is best described by Liam Forde, one of the most inspired artists of organisational design I have known. He calls it "Clarify, Communicate, Align". First, discuss, agree and write down. Then share the output with all those who will be impacted by what has been agreed. Finally, ensure everyone understands that being part of the organisation means aligning with the agreed positions.
Clarity lower down the organisation
Being clear on these elements works equally effectively for sub-sets of the organisation. I have used purpose, mission, culture and role definition with departments, and even teams within departments. The primary requirement in this case is to ensure that anything sorted out for a sub-set aligns with the top body.
However, at least once I have used the process in reverse, in the absence of the top of the tree having gone that far and being reticent about doing it. In fact, showing that it worked at a team level served as proof of concept, to enable it to be cascaded upwards.
Why clarity works
Here are 6 reasons why I reckon that being clear on these elements of organisational design can work better:
- The process by which they are clarified and settled allows all relevant views to be expressed, even if not eventually incorporated. You know how everyone feels about an issue.
- The agreed positions can be easily communicated to new people joining the organisation, instead of them having to find out the hard way.
- The agreed positions can act as reference points against which new ideas and directions can be tested.
- They can form part of regular reviews – "how are we going against what we agreed?"
- They can provide objective foundations for holding difficult conversations and giving constructive feedback. It's easier and more immediately relevant to start such a conversation with: "Our agreed culture is ##, and I'd like to discuss whether we/you have been acting accordance with it".
- They can be communicated effectively to external stakeholders where appropriate.
Yep, it works
Once we finished our "Things are falling apart here" discussion, the CEO said to me "I'd always thought that stuff about being clear on purpose, mission and culture was wasting time, because we knew where we were going and what we were doing. But you guys keep talking about it and I've started to see how it can be useful. It's not wasting time after all."
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