How We Describe an Organization
11/20/18 UPDATE: We’ve created a slightly simpler version of the Org Charter you can get here.
This week we’re sharing one of our most powerful tools: The Organizational Charter. The Charter does two things:
It helps us as partners to understand the organization and chart its changes over time
It gives employees a single document that describes their organization and its ambitions
The Organizational Charter is invaluable to our work and now you can use it, too. Create your own bad first draft and send it to us and we're happy to give you feedback or help. Email it to firstname.lastname@example.org.
Background & Overview
How do you describe an organization?
When we started NOBL in 2014, we struggled to give order to the mess that is an organization. After all, business is the commercialization of human interaction and well, people are messes of complexity. We succeeded in helping clients enact change, but helping them hold the organization together as an intelligible mental model during and after the change was taxing, if not maddening.
It’s no surprise then, given the challenge, that clients tend to rely on org charts to make sense of their organizations. But org charts don’t communicate purpose. And org charts should be strategic, but strategy is nowhere to be found on an org chart. Moreover, org charts don’t tell teams how to work together. As org charts have proliferated as the de facto tool for organizational design, they’ve also had the unintended effect of training managers to think first in reporting lines or headcount and not purpose and strategies.
Over the last year, we’ve struck upon a better solution. We call it The Organizational Charter.
Our Charter encompasses four domains: Purpose, Strategies, Structures, and Systems:
Purpose is the reason why we choose to work together indefinitely.
Strategies are the bets we’re currently making to fulfill our Purpose.
Structures are the division of work and resources we need to execute our Strategies.
Lastly, Systems are the tools we need to align behavior across our Structures.
These domains sit like Russian nesting dolls: Strategies follow Purpose. Structures follow Strategies. Systems follow Structures. Therefore, a change within a higher domain should trigger changes to the domains below it. Too often, teams start at the Structure level, and hold a reorg with the hopes they'll be more effective. But if you haven't addressed the Strategy motivating the reorg in the first place, your team will continue to struggle. And in today's dynamic environment, the organizations that can sense change better and make internal changes faster outperform their rivals.
How We Use the Charter in Our Change Practice
Clients hire us to help them change, so we need a way to document those changes over time.
When we first engage with a new client, we start with a really bad first draft. Our team conducts 1:1 interviews with employees, we consume every strategy document we can find, we survey the whole company, and we conduct retrospectives and post-mortems. We then turn our findings into a Charter and host leaders offsite to beat it up and make changes.
Once we have a workable version, we take the Charter to departmental and team leads to compare it to how their teams actually work. With those leads, we identify conditions on their team that need to come into alignment with the Charter and then we create plans with them to do so. If any severe objections are surfaced while distributing the Charter to individual teams, we take those objections back to the organization’s leaders for action.
While we’re helping teams enact changes related to the Charter, we also make plans to re-review the Charter in six months. An organization should be at least as dynamic as the environment around it, so leaders must get together to review the Charter, gather suggested changes from their teams, and roll those changes out to the entire organization.
As a part of reflecting on the Charter, we encourage clients to include “Release Notes” with every new iteration of the Charter (just like app updates include). These Release Notes detail what has changed, why, and what’s still lacking or unclear from the Charter. Together, the Charter and Release Notes become a powerful onboarding tool for new talent (especially new leaders).
How to Create Your Own Organizational Charter
Don’t be afraid of a bad first draft. Grab your colleagues and try to piece together the Charter by following these steps:
Start, of course, with Purpose. Even in times of constant change, your Purpose remains a fixed point on the horizon to guide you through uncertainty and disorder. There are as many ways to define your Purpose as there are branding consultants in the world, but all of these models eventually ask the same questions:
What do we want to change about the world and why?
How can we use our collective skills to make change and what will the world look like when we succeed?
After you have a “good enough” answer to your Purpose, move on to Strategies. Remember that Strategies should be the choices and tradeoffs you’re willing to attempt to fulfill your Purpose. By their nature, they should feel constricting and somewhat risky. When we review Strategies, we think in categories like: Customer, Competitor, People, Operations, Finance, etc. Add or subtract any categories here you like, but don’t skip over both an “Even Over” statement for each Strategy and a list of the hypotheses behind the strategy.
Example: One of our People Strategies is written as, “Real change experience even over polish and pedigree.” We want talent that has been in the trenches of real change, even more than we want someone from the top schools or someone that can charm a room of people. Our underlying hypothesis is simple: nothing can train you for what we do better than experiencing it first-hand.
Once you feel like the Strategies you’ve captured are the best bets you can think of to fulfill your Purpose, turn to Structures. Don’t lazily copy whatever structures you’ve seen at prior organizations, think critically about the best way to divide your resources to achieve your Strategies.
Start with a high-level description of your organizational structure and include an org chart, too.
Next, for each major structure within the organization, describe its customer (who does it serve?), purpose (why does it exist?), objectives (how you’ll measure it), and leadership (who’s in charge?).
Don’t go overboard with this section. Stop when you feel like you’ve added enough detail to help any new employee figure out where to go and who to speak to if they have further questions.
Ok, time for the last domain: Systems. Given how you’ve divided the company, consider now the best way to guide behavior and enforce norms and rules. We break down Systems in five parts:
What We Owe to Each Other (aka WWOTEOs, aka company values): Like Strategies, these are choices we make with a tradeoff, but this time in terms of how we want to work together. WWOTEOs are phrased “blank even at the cost of blank.” Example: Continuous improvement even at the cost of comfort and confidence.
Global Rhythms: What recurring habits and rituals knit your teams together? Describe the event, frequency, and objective. Example: A monthly all-hands to update everyone on the state of the business.
Global Norms (rules we can occasionally break): Make a short list of the automatic behaviors and unique quirks of your organization’s culture. Example: Try not to be more than five minutes late to a meeting.
Global Policies (rules we shouldn’t break): Norms are great, but sometimes you do need real rules that you can enforce. Example: Save the receipt if the expense is more than $75.
And lastly, your Global Stack of Tools: Here list the most common tools that teams use to get work done. This official list will help tamp down on confusion and teams not able to interface because of competing software tools. Example: We use Slack for group chat.
Now take what you and your colleagues have written and get feedback from other people in your organization. Get it to a place where it’s “good enough” at describing the organization and distribute it to everyone in the company. Then in six months, reflect on it, make changes, and distribute it again.
And if you found the exercise and the Charter useful, please share it!