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Developing an organisational organogram – an orgtology perspective

organogram Creating an Organogram - an Orgtology Perspective

To create an organogram from an orgtology perspective differs from traditional methods. Here our task is to first understand the flow of activity before we add resources and authority. We must at all times ensure efficiency. Not only regarding resources, but also in terms of process flow. We cannot assume that people who hold similar  knowledge, will be meaningful to the same process flow.

The Human Resources Department is a good example. All employees in HR work with people. This includes recruitment, performance, training, payroll, discipline, employee relations, etc. In this traditional way, we cluster resources according to an area of knowledge. An AI system will find this inefficient since these processes do not have the same purpose. In fact, they have more in common with other organisational processes than with each other. Recruitment, for instance, has a lot in common with budgeting and procurement. They all have the purpose of sourcing resources to the organisation. In so, employee relations have a lot in common with stakeholder and customer relations. They all share the purpose of creating reciprocity between Org and its stakeholders. Etc.

The aim of an orgnogram must always be to optimise activity flow. The effect of not doing this is that we often duplicate similar processes under different authority structures. E.g., supply chain has a process for procurement, whilst HR has one for recruitment. Each holds their own policies and procedures, etc. Yet, the two are about 75% similar and they have the same purpose. Both source resources to Org. The one supplies humans and the other assets. The way we design Org must solve this dilemma. It should begin with the flow of activity and not the authority over an area of knowledge.


The basic assumption on an organisational organogram 

If purpose and intent define Org, then it must organise its activity and resources around that. Purpose will ensure performance whilst intent will secure relevance. There is nothing else that Org must do. To drive activity beyond these two concepts will be a waste of resources.

An organogram must show how we organise our resources. In orgtology, purpose drives the operational construct of Org. And since purpose is the receptive part of Org, it must be a permanent construct. Intent is the inverse reality of purpose; therefore, it has a temporary nature.

In so, the organogram must show the following:

  • How we resource the flow of our operational activity (how we run Org).
  • How we resource our strategic activity (how we change Org).
  • How we create authority within this framework (how we control Org).


Below are seven steps to create an organogram. This is a reverse engineering exercise. We reverse engineer the purpose of Org to a set of rules and targets. Through this process we define authority and efficiency.

Step 1: Develop purpose as a process

Purpose exists through process. Without process, purpose is a mere idea. Without purpose, process is a project. Projects can run without purpose. E.g., a teenager who gets a tattoo to spite his parents, runs a project. There is nothing purposeful about it until it latches onto a process. E.g., If the tattoo becomes a symbol of freedom for the teenager, then the project found a purpose.

So, to understand the purpose of Org, we must depict it as a process. This will help us to understand what this purpose must do as well as how, where, when, and who will do it. Holistically we will then understand why we are doing what we do.


Step 2: Turn this core process into a process construct

Orgtology holds that all organisations have a generic construct. These are components that Org must have to perform. We call these components "systems".

To run Org, we must have a blueprint for the following systems…

  • The Core Business System – What is our mandate and how will we run it?
  • The Resource System - How will we resource our mandate?
  • The Relationship System – How will we create beneficial relationships?
  • The Transformation System – How will we change our organisation?
  • The Risk System – How will we stay safe?

The generic operational construct from an Orgtology perspective.

Step 3: Make governance decisions on the construct

In Org there are mostly three levels of governance. They are:

  • Stakeholder's interest – Governing Board.
  • Strategic interest – Executive Team.
  • Operational Interest – Senior Management.

The Board are not employees to Org. Our authority construct thus begins with the EXCO team. This is where things go wrong when companies develop an organogram. They mostly confuse "running" and "changing" Org as one thing. In orgtology we assert that these elements work on different rules and they run within a different risk framework. This confusion mostly stems from the fact that most companies do not have the luxury of splitting these roles. The effect is that an employee can be both, an EXCO member and a senior manager. As a senior manager, the employee might be the Head of Marketing who manages the marketing team. But she is also on the EXCO team. Instead of seeing these as different teams, EXCO members sees the one as an extension of the other. This results in EXCO meetings becoming operational feedback sessions. EXCO members in such case become no more than highly paid supervisors.

To resolve this problem, it is of utmost importance that EXCO members align themselves to the systems in their process construct on the highest level. In complex organisations, we can break the larger system into smaller parts. This often happens with "core business". E.g., Director of Coal Mining & Director of Gold Mining who both give authority to the Core Business System.


Relating the process construct to an organogram - an orgtology perspective


Step 4: Distribute the work to teams

Once we have a governance structure for our executive team, we can begin linking the operational side of Org. We do this by creating teams within our systems.

E.g., To run our relationships, we might need the following teams:

  • A team working with employee relations.
  • A team working with communications.
  • A team working with customer relationships.
  • A team working with advertising.
  • A team working with sales.
  • Etc.

Many organisations might only have one person working with this, or even one person working with a number of these things. There are no rules on how Org must divide its roles. It could notch people up or down on the ranking scale, depending how important such role is for organisational performance. E.g., from the above example there might be a Sales manager, but an advertising supervisor, etc. One must always begin with purpose and then go to impact. What is the purpose of the team, the role, and what is its impact? This exercise should not be rushed since it causes major employee stress when it changes.

Also, important here is how we define a team. From an orgtology perspective, projects and processes create teams. No team should exist outside this rule. 


Organogram for the Relationships Director - an Orgtology perspective
Organogram for the Resource Director - an Orgtology perspective
Organogram for the Transformations Director - an Orgtology perspective
Organogram for the Risk Director - an Orgtology perspective


Step 5: Choose an authority network structure

There are several organogram types that one can choose from when choosing a network structure. It is not the intent of this essay to discuss them in detail. The most common types are the Functional, Divisional, and Matrix organograms.

  • Functional structures work well in bureaucracies where the organisational mandate is clear and non-negotiable. Government institutions, regulators, logistics companies, etc., will run well under functional structures.
  • Divisional structures work well where organisations must deliver the same products or services in a myriad of geographical locations and markets. I.e., the same structure is replicated throughout various regions. Banks, international distributors, etc., will run well under divisional structures.
  • Matrix structures work well where an organisation must deliver specialised services or products. I.e., in organisations that must focus on product and function. Consulting firms, production facilities, etc., will run well under matrix structures.

Traditional organisational structure design types


Step 6: Create a "simple to grasp" authority flow chart

This is a continuation of Step 4, but in more detail and at a lower level. Here we must define and map all roles needed to run and control Org. Since many of these roles will be replicated, their processes must be fully understood. Without a process construct in place this exercise will be disastrous. We must first understand how activity connects with resources. Also, we must know how purpose unfolds throughout the organisation. An organogram that is not linked to a process construct will cause more harm than good. It will create confusion and make it hard to effectively assess employee performance.

It is key that we link the team and authority structure of Org in an understandable way. It must no be hard to grasp. Everyone in the organisation should follow the organogram without difficulty. It must be simple, and its logical flow must be clear. Those are the only rules.



Step 7: Create communication rules

Rules create an algorithm, which is by far the best way to manage performance risk. Our task here is to ensure that everyone in the organisation understands who to ask, who to complain to, who to make suggestions to, etc. Systems thrive on reciprocity, which is impossible without communication (in some form). The rules of communication must be clear. This also includes the rules of engagement and conflict, which is a form of communication.


Conclusion

An organogram makes the constructs of Org human. It puts people in the picture, and in so, give authority to Org. There is a myriad of models available on how to develop an organogram, but very few (if any) give guidance on how to link these structures to the operational and strategic constructs of Org. Without that link, an organogram will cause more problems than remedy. It might even lead to immense confusion. With that comes financial loss due to people who do not know what they must do to contribute to the performance and relevance of Org. There is also increased risk and difficulty to assess employee performance. Where we develop an organogram in isolation to the process construct of Org, it will lead to a myriad of problems.

To design an organogram that is in line with the operational and strategic constructs of Org show an in-depth understanding of organisational purpose and intent. It will enable those who lead Org to make relevant decisions and have an exact assessment of organisational performance.



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Join the Orgtologist Certification Program (OCP) and become a Certified Orgtologist with the International Orgtology Institute

The program is highly suitable for senior managers, directors, executives, and those who aim for senior positions within an organisation. The OCP has four parts. They are: orgtology theory, organisational design, strategy, management and leadership. This is an advanced program. To enroll, you must hold a bachelor's degree with three years of work experience. On completion, you can enroll as an Orgtologist with the International Orgtology Institute (IOI).


Originator of Orgtology

Copyright

© Derek Hendrikz: 2021-03-07

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