Organisation Design vs Organisation Development

Is there a difference between Organisation Design and Organisation Development? Many people believe Design falls within Development while others see them as fields that belong in fundamentally different parts of the organisation, i.e. Design should sit with the strategy function/COO while Development belongs with HR.

In discussing this topic with Mark LaScola (Mark, an American, runs one of the leading niche but very much global Organisation Design firms and has been an Organisation Design practitioner for 30+ years), his view is that Europeans are confused about the difference between the two ODs while Americans have a very clear sense of their separation. In Europe they are seen as similar fields, with Design being a subset of Development. The below Venn Diagrams depict these two world views:

OrgVue - Organisation Design and Organisation Development viewed by Americans and Europeans

So what is the difference? Does the difference matter and if it does matter, in what way?

I really like Naomi Stanford’s analogy:

Organization design is deciding first what is the purpose of the car that you are about to design e.g. is it to cross the desert? Is it to win a Formula 1 race? Is it to transport two adults and three children to a party? Then designing and delivering a car that is fit for that purpose.

Organization development is about keeping that vehicle in the condition necessary to achieve the purpose e.g. using the right fuel, having it serviced regularly, teaching the driver how to drive it to maximize its performance, and so on.

OrgVue - Organisation Design and Organisation Development Analogy

The organisation design definition does not mention people or behaviours, while the organisation development definitions are all about these. In that sense, Design comes first.

All too frequently the Design is done around the people, not around the strategic requirements. This leads to bad design, because in practice it is hard to differentiate the role from the person, as we are not just our perfect job specs. Having a purely engineering, mathematical perspective can lead to some pretty stupid people-related decisions. In so many ways structure, governance rules and interfaces have a dramatic impact on behaviour; defining who decides what has a pretty significant impact on how people act, who they need to influence and who needs to interact with whom.

So in my view, the two ODs can never be truly separated. Equally, I believe you have to start somewhere. So, start with what needs to happen – the ideal design for a given set of criteria – and then think through the impact. Think through whether too many trade-offs are being made and if the desired behavioural outcomes are going to be met. Think through ‘How Will it Work in Practice’ or the ‘HOWWIP’. Think through the risks and people trade-offs, iterate the design if needs be (and iteration will almost certainly be needed) until the optimal design is established.

OrgVue - Organisation Design and Organisation Development BrainI regard them, therefore, as quite different but “mono-directionally interrelated disciplines”. What I mean is, you can’t have design without development BUT you can have development without design.

The way of thinking through a design process is quite different to that of a development process. It is more physical. It is more concrete. It is more left brain. But, ignore development and almost certainly the whole design will come to catastrophic implosion under the weight of real politics with a small ‘p’.  That means that those analytically driven souls like myself have to get to grips with a field that doesn’t come naturally. By the same token, however, those who come from the development side of the equation have to equally get to grips with the design field, and not just use the good old development tools & techniques as a way to fumble through.

Human skills, coaching skills, consulting skills can achieve amazing results, but there are some fundamental design techniques that need to be applied too. Design and development should team together, and to do so we still need a good appreciation of each other’s worlds.

An organisation is a system

The literature in organisation design talks about system thinking and that an organisation is a system. Examples include:

  • Designing organisations is the process of purposefully configuring elements or organisation to effectively and efficiently achieve its strategy and deliver intended business, customer and employee outcomes (Mohrman, 2003)
  • Is driven by the business strategy and operating context; requires holistic thinking (systems, structures, people, performance measures, processes, culture, skills…); design for the future; not to be undertaken lightly; a fundamental process and not a repair job (paraphrased from Naomi Stanford, 2007)

So if this is true, should you run a mile because it is too complex? And anyway, what does this really mean? And how, pragmatically, can we make sense of this idea in a value adding way rather than just an academic concept?

Unfortunately (or fortunately, depending on your perspective) we humans have limited cognitive ability. Most of us can only really deal with two variables at any one time.  So we have to break the parts of the system down, understand the bit, then chunk it up again. The days of Leonardo de Vinci are long gone.

Let’s start with the organisational system. The below is a depiction (model) of the organisational system (all models are a simplification). An organisation has a vision. A reason for being and this is translated into goals & objectives (and more broadly into a strategy in how to get there). Those objectives are delivered by employees who fulfil roles. Roles fit within a reporting structure. The number of FTEs required is the right-sizing question, i.e. how many FTEs do we need? As I and many others constantly say, Org Design isn’t about who reports to whom. It is about what the role is required to do. What decisions need to be made? What activities need to be done? To do these things, competencies are required and employees have competencies. So what is the gap? How are customers going to be served and what are the value chains needed to serve those customers?

OrgVue - Draw Org ChartsIf you define answers to these questions, then you have designed your organisation. If you just draw org charts you haven’t really got much at all. Just boxes… So what?

The model can be made even more complex… (As can all models. All models are wrong, but some are useful).  Some examples of how it is often made more complex is by defining: who is responsible for each customer or an element of the customer value chain. The same is true for projects or risk management… but remember that we can “only really deal with 2 variables” at one time anyway.

That is why, in all our literature, that we define the system in the below chalk board diagram.

Organisation Design - OrgVueSo how can this be practically useful?

At its most basic, if you want something done, make clear to the person you want to do that “thing” that they are accountable AND it is them, not someone else. Give them that ownership. Equally, be sure that the key things that need doing are defined and that you have the right people (i.e. the right competencies) on it.

If you think this is all too much, then think about the time and effort that go into generating job descriptions. The elements in a classic job spec are those that are being defined by this system thinking.

OrgVue - Job DescriptionTo date I have not yet found an organisation that has good job specs.  (If you feel you have great job specs OR you know of an organisation that has good ones, please please let me know. I would love to learn about it). This is not through lack of effort. It is because each job spec is a standalone word document that is more often than not generated for a recruiting or job evaluation purpose (justification of pay and grading).

OrgVue has been developed to solve this issue. To provide a place for defining things like roles; listing out employees or defining processes, competencies, customers… and how they “link”. But linking them all together, you have a “graph” (read graph vs. relationship database). You don’t have to link them all together, but if you do, then by definition you have everyone’s job spec. You have total transparency on who is accountable for what.

Daniel Pink has famously popularised what really motivates employees in knowledge organisations: Purpose; Autonomy; Mastery. By defining the organisational system, you help to codify the broad organisational purpose and how that cascades. Each role in a defined system, should have purpose. By being clear on the accountabilities of each role, you are giving autonomy. Given the right level of autonomy requires trust. Trust means you have faith in the person’s ability to effectively do the role. This means they need to have enough competence to do the role… they need mastery.

It is all connected and it is all do-able. You don’t need to define everything at one. Start with processes in one area… and move out from there. Take the job specs and “see” what that looks like.

And that is my second to last point. You need to be able to “see” this stuff. It isn’t about codifying it in a black box. You need to almost touch it. Print it out. Break it down, experiment with various options and keep it updated (easily).

Which is why we, for the past 4 years, we have been on the journey of developing OrgVue and the Org Design thinking. It is way the product is schema-less because every situation is different. Equally, it is why we are developing standard sets of processes and competencies models… because they are painful to generate and why create it twice? Build on a starter for 10. It is why we are shooting to simplify as much of the process as possible, hence the push to take out the ACI from RACI (A = Accountable, C = Consulted, I = Informed)… these define roles people can take within a process or decision making… It is why we have made the product so visual with an ability to punch out to vector PDFs (and soon, PowerPoint slides).

To define your organisational system requires considered thought. But now, with OrgVue, for the first time it is actually possible. Embrace that revolution!

5 Myths about 70:20:10

Discussions about 70:20:10

Internationally there are all kinds of discussions about the sense and nonsense of 70:20:10. The number of links is almost infinite and, in almost every language, there is something to be found. Typical patterns of these discussions again and again refer to the same so-called nonsense of 70:20:10, such as:


How informed is this discussion?

All of the above thoughts about 70:20:10 can be all rejected in a definitive book about 70:20:10. This book was written based on Tulser’s experience and practice in the Netherlands, and on experiences gathered across the world. This book is now available in Dutch, English and Korean and has been bought globally.

This ’70:20:10 Towards 100% Performance’ book describes the 70:20:10 methodology as a contribution to enhancing L&D practices in the world of organisational learning by expanding, renewing, and consistently connecting to the core business of organisations. It is at the core of a performance-oriented approach, which will lead to a measurable business impact for L&D.

Of course, neither the book nor the 70:20:10 Institute, are against formal learning, the 10. In our view, formal and informal learning in the world of corporate and organisational learning reinforce each other. But it is important to design any formal learning that is necessary as part of a business solution on rigorous evidence-based principles. In our practice, we see that this is often not the case.  This is reinforced in this book by Clark Quinn.

The field of informal learning is still an open one, because there has not been enough research in the field that is evidence-based. The exceptions are the domains of performance support and the demonstration of correlation between experience and deliverables. For instance, the many studies in medicine repeatedly show that experience leads to less complications, rework and mortality. This link provides a meta-analysis of that evidence.

There has also been significant (international) research on the time that people in organisations spend on formal and informal learning. This insight into the economic approach to learning in organisations is extremely informative with clear lessons for our profession. Andries de Grip offers an excellent overview of the power of informal learning.

More recent studies show a shift in percentages of time people spend in formal and informal learning. This is completely in line with the baseline of the 70:20:10 reference model. Not in exact percentages, of course, but in underlying principles. Everyone understands that Pareto’s 80:20 ratios is a principle that remains unchanged if the percentages do not exactly match 80:20. The same is true of 70:20:10. Even the initial Centre for Creative Leadership studies showed different rations with different groups.

Many people in the world of L&D realise that it is more effective if their solutions include more than offering formal learning interventions. With 70:20:10, we have developed a reference model with a concrete methodology and a multitude of solutions. Our goal is to strengthen L&D structurally and to further develop the 70:20:10 playing field with anyone who wants to join. Of course, we are open to work with a variety of researchers to develop evidence-based solutions.


Myth 1: Every professional learns according to 70:20:10

See the book in which 70:20:10 is described as a reference model aimed at strengthening L&D in the world of organisational learning and expanding services with measurable business impact. So, for us, 70:20:10 is not an intervention matrix, and the ratio is not prescriptive. Nor is it our idea that 70:20:10 should form the basis for the formal education system.

Confusion often occurs regarding whether 70:20:10 should also provide guidance for formal training. A good example of this is, for instance, the fact that, during his/her initial development, a surgeon will follow a formal education programme rather than gaining professional knowledge in the 70 through experimenting and learning from experience. Of course, the 70 includes a wide range of activities to work better (learning) and it is not the intention of the 70:20:10 reference model that surgeons should only learn through experience or experiment. This example is unfortunate when arguing against informal learning. Medical specialist training includes a strong and comprehensive practical component (70 and 20) to improve working, see Chapters 7 and 8 in Duvivier’s dissertation (2012): Or, said differently, it has been found effective that a significant part of formal education for doctors and medical specialists takes place in practice.


Myth 2: 70:20:10 as an ideal label

Of course, 70:20:10 may not be an ideal label. However, the principle is too important to ignore in the world of organisational learning.

From a variety of sources, L&D’s focus is around 80-100% on formal learning (learning apart from work), see ATD State and Industry Reports and or Towards Maturity benchmark studies. For L&D then, it’s a challenging task to also make a relevant contribution to informal learning (learning during work). We know that learning in organisations extends beyond the offer of formal learning and, specifically, onto the playing field of informal learning and work, where new opportunities for L&D arise. Who can resist that challenge?


Myth 3: Formal learning and training is only 10% and therefore useless

There is often a suggestion that a 10% spend on formal learning is too little. As explained earlier, the numbers are not meant to be taken literally. However a Dutch study showed that workers spend more than 1800 hours per year working in a full-time employment and a 36-hour working week. If the 70:20:10 ratio were to be taken literally, and assuming that all work provides a learning experience, it would mean that workers need to spend about 180 hours per year on formal learning. However, the CBS believes in practice that employees spend 35 hours a year on formal learning activities.

The suggestion that the 70:20:10 reference model works against formal learning is simply incorrect. There is certainly a shift of learning and a greater focus during and around work, but that is not at the expense of formal learning.

As demonstrated by De Grip’s research, formal learning reinforces informal learning. Therefore, it is certainly useful to design and execute formal learning interventions effectively – and (in the world of corporate and organisational learning) to connect all learning with the core business of the organisation.


Myth 4: There are 3 types of professional learning (70, 20 and 10)

For us, 70:20:10 is not an end in itself. At the 70:20:10 Institute we see it as a movement that is open to other approaches and (theory) formation. 70:20:10 is described in our book as the Droste effect: during 70 activities and learning you can also do 10 and 20 activities and vice versa. Of course, people might work and, at the same time, follow a MOOC, watch an instructional video, carry out e-learning or read a work-related article. All of these activities might be considered in the 10. The same principle applies to co-operation (20) or practical simulations (often part of 70) within the 10.


Myth 5: 70:20:10 highlights an L&D problem

As mentioned in the myth 2 response, L&D’s offerings in the corporate world are dominated by 10 solutions. However, with this approach, L&D leaders often face a problem, or challenge, because it is very important to be connected with the core business and to play an active role in supporting better performance. In the corporate world, L&D often finds it difficult to demonstrate business impact with 10 solutions. That’s why it’s up to us as a profession to tackle the challenge. The 70:20:10 methodology makes this possible.


What does the model deliver?

The benefits of the 70:20:10 reference model include

  • Better connection of L&D services with core business objectives;
  • Opportunities to extend and renew L&D services;
  • Improved ability to demonstrate measurable business impact.

Often, Self Directed Learning (SDL) is mentioned as a benefit for L&D. However, this is not always an advantage and also not in line with reality. An excellent blog by Mirjam Neelen and Paul Kirschner (2017) provides a good overview of the SDL concept, along with the possibilities and limitations of application of this concept in organisations.


And last but not least

We invite everyone from the world of HRD, L&D, HR business partners, managers and other interested parties to work with us and explore more deeply the possibilities and limitations of the application of 70:20:10.

For us, 70:20:10 is not the ideal label, but it is the logical basis for re-structuring L&D and aligning with the core business of organisations. The importance of this will only increase in the present knowledge economy, where knowledge is no longer limited to following formal training and e-learning. So let’s move forward together, instead of conducting insufficiently informed discussions about a label named 70:20:10. The underlying principles – the extension of services, the connection with the core business, and the improved business impact – are too important for our professions to leave ignore.

Can The Blockchain Fix The Recruiting Industry?

Anyone that works in business is aware of the unspoken layer of recruiting that is pervasive in every organization. Either recruiters are actively trying to place someone at an organization, or they’re actively trying to poach someone from a competitor. But recruiters seem to be a consistent participant in the hiring process for most companies.

But were you also aware that one of the biggest issues facing recruiters isn’t the sourcing of candidates, but rather their big headaches come from vetting and qualifying candidates for positions.

One big requirement for most companies is that their candidates provided by recruiters are able to check all of the requirements for the position and that their credentials are legitimate. Which can cause recruiters to have to become forensic detectives in ensuring that work history and education backgrounds are legitimate. Or, what usually is the case, they just take the resume at face value and place their stamp of approval on the candidate and move on. Which is not ideal.

This fast tracking of critical steps has led to many pie-in-the-face moments from companies who later discovered that their executives didn’t graduate with the degrees they claimed, or in some cases never graduated college at all. But when something is on your resume for a few decades and everyone else just assumes it’s correct, it’s easy to see how these situations can occur.

So, aside from quicky background checks or calls into college administration offices, what can HR and the recruiting industry do to streamline this process and avoid embarrassing situations in the future?

Blockchain Tech To The Rescue

You have probably heard about blockchain technology in the past few years. Its most famous use case comes in the form of Bitcoin and cryptocurrencies, but it’s also a technology that can do almost anything and makes systems infinitely more secure and efficient than our current platforms. It does this through smart contracts and distributed ledgers that make the system quick and almost unhackable.

And since you can store almost anything on the blockchain, one company is using it to fix the recruiting industry by ensuring that any information an employer or recruiter would need to know is available quickly and has been vetted by the proper sources. This group is called EchoLink and they’re looking to take on industry veterans like LinkedIn and Hoovers.

“It’s all but impossible to check the credentials of every user in a traditional web based application.” says Steve Chen, the Founder of EchoLink. “It is well understood that educational background and work history found on online sites are not verified. Most recruiters and employers spend time and resources on additional background checking processes.”

And Steve and his group think that the blockchain can change all of this by vetting work histories and school records on EchoLink and providing recruiters and HR professionals a real snapshot and background on their candidates with just a few clicks.

And while this may seem like a niche industry to target with the blockchain, the flexibility of the tech allows it to be customized for pretty much any use case you can think of. So why not go after a niche industry that is in desperate need of disruption?

Burnout: Our Biggest and Most Hidden Workplace Epidemic?

With the rise of technology and increasing hyper-connectivity in our work and social lives, people are finding they need to be ‘always-on.’

Much research has shown that increased demands at work such as workload, pressures, ambiguity, relationship conflict and poor management behaviours are contributing to employees feeling ‘burnt out.’

In fact, in a recent survey 50% of people report ‘always’ feeling exhausted. It is no surprise that there has been growing concern between the relationship between our work and overall mental health.

Photo by Kevin on Unsplash

The Deteriorating Mental Health Epidemic

According to The Mental Health Foundationtwo in three adults have experienced mental health issues at some point in their life with a total of 65 per cent of Briton’s having been affected by conditions ranging from panic attacks, anxiety to depression. Worryingly, the World Health Organisationhave reported that mental health has deteriorated by 50% since 1990, with experts concluding it is set to get worse.

Consequentially, we are seeing more and more people struggling to cope at work as they balance a myriad of demands with their overall mental wellness. This often leads to two organisational outcomes; 1) increased absenteeism, 2) increased presenteeism, whereby people turn up to work despite being ill and struggle to engage or be productive with their work.

It has been reported that 1 in 2 of all working days lost are now due to poor mental wellness; including stress, anxiety and depression (Office for National Statistics), costing in the order of £26 billion per year. Shockingly, research has indicated that presenteeism is far more costly than absenteeism, costing employers 2 to 7 times more.

Clearly, ensuring employees feel mentally well to be their best is not only a moral imperative but also a simple economic argument. Every ounce of our productivity at work comes from our mind and our state of mind dictates the effectiveness of our application; how we relate to others, behave at work, perform and engage with our work to contribute to the collective organisation success.

The Mental Health Foundation estimate that people working with a mental health problem are responsible for 12.1% of the UK’s GDP — that’s £226 billion of value.

The Invisible Problem

Photo by Johnson Wang on Unsplash

One of the biggest challenges organisations face is being able to identify a problem in the first place. Often, employees do not feel safe or confident in disclosing mental health issues so often the issue is invisible, leaving negative workplace behaviours and cultures to fester. A recent study showed that of the 49% of people who had taken mental-health related absence in the last year, 45% of them gave another reason for their absence. Delving in to this further, the same study by The Mental Health Foundation found that there were three top reasons not to disclose the true reason for their absence:

· 46% did not report mental-health related absence for fear of being discriminated against or harassed by colleagues

· 41% did not report mental-health related absence because they feel/ felt ashamed to do so

· 45% did not report mental-health related absence because they felt it is none of their employer’s business

It becomes a very bleak picture, when you also add to the mix that nearly half of all employees do not feel their workplace is an emotionally healthy environment, with 55 per cent of organisations having no formal strategy for handling employee wellbeing.

The Burning Platform

If we are to create workplaces that enrich us and enable us to thrive and perform, we have to start with tackling how we understand and challenge ourselves to address workplace demands, culture and burnout.

This means better identification, better awareness and creating safe environments. Ultimately, we not only need to focus on the problem and how best to support people at work, but we need a fundamental shift in how we empower and promote mental wellness at work.

People Matter exist to empower people and organisations from the negative impact of stress at work. Using powerful AI, we spot potential risks to wellness before things start to become problems.

Written by Amy Charlotte King

Find out more at www.peoplematter.tech

How High-Performing HR Organizations Use Technology—And What You Can Learn From Them

Mercer’s 2017 HR Transformation Study – How HR Needs to Change revealed some interesting truths about HR and technology. We learned that organizations with high-performing and strategic HR functions have embraced technology and are constantly looking for ways to move that needle forward.

Of particular note, these organizations usually invest in an optimal mix of HCM technologies and use them to extract key metrics that can drive strategic business priorities through people, while delivering a customized consumer-level value proposition and an engaging experience for both leaders and employees. 

We believe that investing in human resources management technologies should be a top priority on any organization’s strategic talent agenda. And here’s why:

According to our study, organizations who have made technology a priority:

  • Achieve better business outcomes, such as delivering exceptional customer value (94%). 
  • React proactively to disruptive change (83%) 
  • Drive innovation (89%)

They are also viewed as great places to work (86%) and attract the talent needed to excel (91%).

Despite these statistics, however, it seems not all HR functions are on board. In fact, our survey found that only one-third (35%) of CEOs believe their HR function provides (or is strategically invested in providing) a digital experience for employees. And even though organizations with high-performing HR functions use technology more than others, it’s still relatively limited. While 69% have employee self-service in place, only 36% have managerial self-service, and only 27% have mobile talent applications.

The good news though is that our findings indicate that almost all organizations plan to do something about their limited HR technology capabilities: 

  • 57% plan to address HCM/HRIS deficiencies 
  • 58% plan to improve the delivery of transactional services in the next 18 months

What is the return on investment for organizations implementing HR technology solutions?

Many organizations identify ROIs, which include the single central repository for all HR data, the ability to provide consistent reliable reporting, and anticipated benefits of workforce analytics capabilities that drive effective decision-making through predictive rather than historical analyses. And while these are all important elements driving the business case for change, there are so much more from a process, structure, and capability standpoint that cannot be understated.

One of the biggest challenges that prevent HR from assuming a strategic role within organizations is time. Too many HR professionals are spending the majority of their time on non-value added activities that could easily be automated – and this automation would enable HR resources to be redeployed to more strategic aspects of the business such as workforce planning, succession planning, and building leadership capability. Through our work with clients and our research, we have consistently found that high-performing HR functions that prioritize technology and leverage it to optimize their activities are better able to add true value to the business. To that end, investing in technology drives efficiencies resulting in HR having the time to strengthen decision making, truly partner with business leaders, and provide a more customized and engaging experience to the multi-generations in the workforce.

So what are we waiting for? Let’s invest and prove that the benefits far outweigh the costs. At Mercer, we believe the investment will be worth every penny.