Editor's Note: Take a look at our featured best practice, Organization Design Toolkit (103-slide PowerPoint presentation). Recent McKinsey research surveyed a large set of global executives and suggests that many companies, these days, are in a nearly permanent state of organizational flux. A rise in efforts in Organizational Design is attributed to the accelerating pace of structural change generated by market [read more]
Also, if you are interested in becoming an expert on Organizational Design (OD), take a look at Flevy's Organizational Design (OD) Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.
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A few decades ago, faculty members at the University of Michigan were researching the major indicators of effective organizational performance. What came from this research was an incredibly useful model for organizing and understanding a wide array of organizational (and individual) topics. These include theories on Organizational Effectiveness, Corporate Culture, Leadership Competencies, Stages of Life Cycle Development, Financial Strategy, among others.
This model is the Competing Values Framework, developed by Robert Quinn and Jon Rohrbaugh. Based on statistical analyses of a comprehensive list of effectiveness indicators, Quinn and Rohrbaugh discovered 2 major dimensions underlying conceptions of effectiveness, focused on:
- Organizational Focus. This dimension differentiates an emphasis on flexibility, discretion, and dynamism from an emphasis on stability, order, and control.
- Organizational Preference for Structure. The second dimension differentiates an internal orientation—with a focus on integration, collaboration, and unity—from an external orientation—with a focus on differentiation, competition, and rivalry.
Together, the 2 dimensions form 4 quadrants. The diagram visualizes the framework and places names for each the quadrants:
- Human Relations Model
- Open System Model
- Internal Process Model
- Rational Goal Model
Each quadrant represents a unique and defining sets of organizational and individual values and implications. In fact, values and implications from diagonally opposing quadrants are complete opposites–hence the name, Competing Values Framework. Someone who strives in one quadrant may be completely ineffective and counter-productive if placed into an organization that is aligned with a different quadrant. Therefore, it critical to understand what quadrant your own organization falls into and the associated implications of being in this quadrant. Knowing this will help you identify the criteria for effectiveness that should be pursued, the leadership and managerial competencies that are most effective, and the underlying corporate culture.
Let’s look at an example.
Human Relations Model
The top-left quadrant, called the Human Relations Model, places a lot of emphasis on flexibility and internal focus. It stresses cohesion, morale, and human resources development as criteria for effectiveness. Tools and techniques, including teamwork, collaboration, talent management, empowerment, or inter-personal relationships, are highlighted here.
Leaders here tend to be Facilitators, Mentors, and Team Builders. The culture is one of Collaboration with the mantra, “do things together.” Value drivers include Commitment, Communication, and Development.
Rational Goal Model
On the opposing (bottom-right) quadrant, we have the Rational Goal Model. Rational Goal Model emphasizes control and an external focus. It regards planning, goal setting, productivity, and efficiency as being effective. Tools and techniques, including competitiveness, fast response, decisiveness, driving through barriers, or goal achievement, are highlighted here.
Leaders here to be Competitors and Producers. The culture is more around Competition, where folks live by the mentality, “do things fast.” Value drivers include Market Share, Goal Achievement, and Profitability.
Leadership Development
As alluded to, the Competing Values Framework can be applied to Leadership Development. The subtlety that this model addresses is that an effective leader in one organization may not be an effective leader in a different organization. Why? Well, it’s because the 2 organizations may not fall within the same quadrant.
Leadership development experiences and executive education programs often focus on competencies and capabilities that reside in each of the 4 different quadrants. Eight categories of leader behavior, or roles, emerge from this framework:
- Mentor Role
- Facilitator Role
- Monitor Role
- Coordinator Role
- Innovator Role
- Broker Role
- Producer Role
- Director Role
The specific leadership tools and techniques that receive emphasis with leadership groups are often determined by the organization’s own culture, aspirations for change, competencies of the management team, or the feedback that individuals receive from various assessments.
What are your thoughts on this model? Where does your organization fall? Please share your thoughts in the comments below. You can download an editable PowerPoint about the Competing Values Framework here on the Flevy documents marketplace.
31-slide PowerPoint presentation
Organizational Design involves the creation of roles, processes, and structures to ensure that the organization's goals can be realized. Organizational Design span across various levels of the organization. This framework focuses on the following 3 initial steps of the full 10-step Organizational
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Gain the knowledge and develop the expertise to become an expert in Organizational Design (OD). Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.
Organizational Design (AKA Organizational Re-design) involves the creation of roles, processes, and structures to ensure that the organization's goals can be realized. Organizational Design span across various levels of the organization. It includes:
1. The overall organizational "architecture" (e.g. decentralized vs. centralized model).
2. The design of business areas and business units within a larger organization.
3. The design of departments and other sub-units within a business unit.
4. The design of individual roles.
In the current Digital Age, there is an accelerating pace of strategic change driven by the disruption of industries. As a result, to remain competitive, Organizational Design efforts are becoming more frequent and pervasive—with the majority of organizations having experienced redesign within the past 3 years. This has only been exacerbated by COVID-19.
Frustratingly, only less than a quarter of these Organizational Design efforts are successful. Most organizations lack the best practice know-how to guide them through these Transformations effectively.
Learn about our Organizational Design (OD) Best Practice Frameworks here.
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