Leading Organization Design

Praise for Leading Organization Design

"Sheds light on the challenges of organization design in a complex enterprise and more importantly provides an insightful and practical roadmap for business decisions." —Randy MacDonald, SVP, human resources, IBM

"Designing organizations for performance can be a daunting task. Kesler and Kates have done an admirable job distilling the inherent complexity of the design process into manageable parts that can yield tangible results. Leading Organization Design provides an essential hands-on roadmap for any business leader who wants to master this topic." —Robert Simons, Charles M. Williams Professor of Business Administration, Harvard Business School

"Kesler and Kates have encapsulated their wealth of knowledge and practical experience into an updated model on organizational design that will become a new primer on the subject." —Neville Isdell, retired chairman and CEO, The Coca-Cola Company

"In today's world of global business, organizational design is a critical piece of long-term success. Kesler and Kates have captured multiple approaches to optimize global opportunities, while highlighting some of the keys to managing through organizational transition. A great read for today's global business leaders." —Charles Denson, president, Nike Brand

"Leading Organization Design has some unique features that make it valuable. It is one of the few and certainly only recent books to take us through an explicit process to design modern organizations. This is accomplished with the five-milestone process. The process is not a simple cookbook. Indeed, the authors have achieved a balance between process and content. In so doing, Kesler and Kates show us what to do as well as how to do it." —Jay Galbraith, from the Foreword

Foreword by Jay Galbraith vii

Introduction: Why Organization Design 1

1. The Five Milestones 9

Milestone One Business Case and Discovery 25

2. Clarify the Strategic Priorities 27

3. Define the Case for Change 41

4. Set the Design Criteria 59

Milestone One Summary: Business Case and Discovery 67

Milestone Two Strategic Grouping 71

5. Use the Six Design Drivers 73

6. Choose the Best Grouping Option 87

7. Embrace the Matrix 102

Milestone Two Summary: Strategic Grouping 116

Milestone Three Integration 119

8. Design for Operating Governance 123

9. Allocate Power in the Matrix: A Case Study in Governance 143

10. Redesign Functions to Be Integrators 155

Milestone Three Summary: Integration 164

Milestone Four Talent and Leadership 167

11. Design the Leadership Organization 170

12. Make the Right Talent Choices 190

Milestone Four Summary: Talent and Leadership 203

Milestone Five Transition 205

13. Set the Implementation Plan 208

14. Navigate the Transition 218

Milestone Five Summary: Transition 233

Conclusion Organization Design in Action 235

15. Roles, Involvement, and the Project Timeline 238

16. The Design Charette 255

17. Learning to Lead Organization Design 276

References 287

About the Authors 291

Index 293

The Authors

The authors are managing partners at Kates Kesler Organization Consulting. The organization design approach and tools they have developed together and with Jay Galbraith have become the standard internal design methodology used in dozens of major corporations around the world.

GREG KESLER has consulted with corporations worldwide for over twenty years on organization design, executive talent management, and HR planning. He has published many articles and book chapters on organization design and succession planning and is on the editorial board of People & Strategy journal.

AMY KATES helps leaders and teams assess organizational issues, reshape structures and processes, and build depth of management capability. She is coauthor of two books with Jay Galbraith and an editor of People & Strategy. She teaches organization design at Cornell University, the DTU Executive School of Business (Denmark), and in client-specific programs.

Today's organizations are as complex as the global strategies they are designed to support. The right organization design is a competitive advantage as companies expand their reach into emerging markets and attempt to channel scarce resources away from yesterday's priorities into innovation and new growth opportunities.

Leading Organization Design outlines a scalable, five-step process to help senior business leaders, supported by skilled human resources or OD professionals, make smart design decisions. While being careful to ensure that a company's organization design is not more complex than necessary, expert authors Greg Kesler and Amy Kates show how the ability to design and manage an organization that can execute complex strategies brings competitive advantage over firms whose management can only do one thing well. With insights from extensive consulting work around the world and their research on many large multinationals, the authors reveal how to generate and evaluate the right design options, how to set up governance and management processes to align power effectively in the matrix, and how to engage the right people in implementing difficult organization changes.

Presenting new frameworks, concepts, and tools that examine in depth how companies like Nike, Coca-Cola, P&G, Cisco, and others have tackled today's design challenges, Leading Organization Design provides new ways of thinking about design as well as a coherent way to organize existing knowledge about the field. It is an essential guide for business leaders who want to make better organization design decisions and for internal and external professionals who support them.

Praise for Leading Organization Design

"Sheds light on the challenges of organization design in a complex enterprise and more importantly provides an insightful and practical roadmap for business decisions." —Randy MacDonald, SVP, human resources, IBM

"Designing organizations for performance can be a daunting task. Kesler and Kates have done an admirable job distilling the inherent complexity of the design process into manageable parts that can yield tangible results. Leading Organization Design provides an essential hands-on roadmap for any business leader who wants to master this topic." —Robert Simons, Charles M. Williams Professor of Business Administration, Harvard Business School

"Kesler and Kates have encapsulated their wealth of knowledge and practical experience into an updated model on organizational design that will become a new primer on the subject." —Neville Isdell, retired chairman and CEO, The Coca-Cola Company

"In today's world of global business, organizational design is a critical piece of long-term success. Kesler and Kates have captured multiple approaches to optimize global opportunities, while highlighting some of the keys to managing through organizational transition. A great read for today's global business leaders." —Charles Denson, president, Nike Brand

"Leading Organization Design has some unique features that make it valuable. It is one of the few and certainly only recent books to take us through an explicit process to design modern organizations. This is accomplished with the five-milestone process. The process is not a simple cookbook. Indeed, the authors have achieved a balance between process and content. In so doing, Kesler and Kates show us what to do as well as how to do it." —Jay Galbraith, from the Foreword