TOPIC
* Designing Organizations to Succeed
INTRODUCTION
* How to structure not-for-profit organizations to succeed is a
topic of constant discussion.
* And like any organization, NPOs need to constantly look at how
they are structured to ensure it fits with what they are attempting to
achieve and how the world around them is changing.
* With this in mind, we will review a book that outlines the
discipline of structural dynamics.
THE PATH OF LEAST RESISTANCE FOR MANAGERS. DESIGNING
ORGANIZATIONS
TO SUCCEED. 1999. Fritz, Robert. San Francisco, CA: Berrett-Koehler
Publishers, Inc. ISBN: 1-57675-065-5. 232 pages.
OVERVIEW OF THE BOOK
* This book is built on the premise that organizations, like
things in nature, adhere to the scientific principle and insight that energy
moves along the "path of least resistance". This does not mean taking the
easy way out, which is the colloquial meaning of the phrase.
* It is based on three insights that the author identifies as
being fundamental principles of the path of least resistance, and the
basis of true organizational and managerial mastery:
1. Energy moves along the path of least resistance
Any changes we attempt to make that do not take the path of
least resistance into account, and inadvertently violate the
path of least resistance, will not work.
2. The underlying structure of anything will determine its path
of least resistance Structure determines the path of least resistance, and
organizations are subject to inescapable structural laws that
govern their behaviour.
3. We can determine the path of least resistance by creating new
structures
We can redesign our organizations so that the path of least
resistance begins to flow in the direction we want our organizations to go.
This process has two steps: understanding, and then application.
* The book also introduces the nine inescapable laws of
organizational structure whose insights can be used to understand our current
situations and redesign them, as well as the concepts of structural oscillation
and structural advancement.
* One of the major goals of the book is to help readers create the
organization they want. To do this, the book is divided into three
parts:
Part 1 The Path to Advancement, which focuses on key principles and
techniques we can use in organizational design
Part 2 The Path of Oscillation, which helps us understand why our
best efforts do not always succeed, and why success sometimes
leads to new problems and reversals as a product of bad
structure
Part 3 Elements of Design, which helps to change the path of least
resistance from oscillating to advancing structures.
PART 1 THE PATH TO ADVANCEMENT
* Chapter 1 An Organization's Structure. The Path to Success or
Failure
This chapter is based on the premise that organizations that take
structural laws into account when redesigning themselves are likely
to succeed, because a change in the structure of an organization
changes the path of least resistance.
Structure is defined as an entity made up of individual elements or
parts that impact each other by the relationships that they form.
It also introduces the first four of the nine laws of organizational
structure:
Law 1: Organizations either oscillate or advance
Law 2: In organizations that oscillate, success is neutralized. In
organizations that advance, success succeeds
Law 3: If the organization's structure remains unchanged, the
organization's behaviour will revert to its previous
behaviour
Law 4: A change of structure leads to a change of the
organization's behaviour.
* Chapter 2: Structural Tension. The Secret of Your Success
This chapter introduces and explores the concept of structural
tension, which is defined as the tension that exists between our desired
state as compared to our actual state.
The author considers the principle of structural tension to be the
most powerful force an organization can have - knowing what we want to
create and knowing where we are in relationship to our goals.
Three elements of structural tension are also introduced: defining
our goals, defining where we are now, and taking action to reach our
goals.
What is critical is having a good understanding of reality - what it
really is, not what people in the organization think it is.
Structural tension is considered by the author to be the key
ingredient in organizations that advance, and advocates its use as the primary
organizing principle.
It produces advancement because it promotes organizational
behaviours that advance the organization: interrelating of goals, reality is seen
objectively, and adjustments to plans and organizational learning
become the norm.
The fifth law of organizational structure is also introduced:
Law 5: When structural tension dominates an organization, the
organization will advance.
* Chapter 3: Structural Tension Charting. The Key to
Organizational Design
In structural tension charting, identifying our major goals becomes
the driving force for defining our current reality and creating our
action plan to reach those goals. What is charted is the major goals at
one end, the current reality at the other, and the action plan or structural
tension in the middle which sets out how the organization will move from the
current reality to the desired reality. To this can be added due
dates and accountability to make sure things get done.
The chapter stresses that an organization needs to have clear
overriding major goals that are clear to everyone, to give the entire
organization direction and to coordinate everyone's focus in a common direction.
These can then be translated and linked down through the organization at
the department, team, and project level.
At the macro level, an organization will have a master structural
tension chart, and linked, sub-charts cascading down through the
organization.
* Chapter 4: Telescoping. Creating Organizational Counterpoint
Chapter 4 introduces the concept of telescoping, which is a
technique for adding progressive levels of detail to a structural tension chart.
Each action step on a structural tension chart becomes a goal that is
"telescoped" out, or expanded into its own chart. This telescoping
process can be taken to several more levels in relation to each action on
the new chart, and so on.
When an action step from a chart becomes the goal of a new
telescoped chart, the same process of describing its current reality, action
steps, due dates, and accountability is completed.
* Chapter 5: Checklists. Refining the Chart
Chapter 5 provides a series of checklists to use as basic principles
in structural tension charting. There is a series of questions to use
as a checklist for goals, current reality, and action steps.
PART 2 THE PATH OF OSCILLATION
* Chapter 6: Structural Conflict. Why Organizations Oscillate
This chapter looks at the concept of structural conflict, which
exists in organizations that have a fundamental structure in which the path of
least resistance makes it easiest to support first one course of action,
strategy, or tactic, but then later its opposite.
Structural conflict is identified as the underlying reason why
organizations oscillate.
This leads to identification of the sixth law of organizational
structure:
Law 6: When structural conflicts dominate an organization,
oscillation will result.
When two tension-resolution systems or goals compete against each
other, it produces a structural conflict.
A structural conflict between two goals makes both goals difficult
to accomplish, and the accomplishment will be reversed.
In an attempt to establish equilibrium, the organization and its
structure oscillates between the two goals.
* Chapter 7: The Problem with Problem Solving
This chapter emphasizes that most people look at structural
conflicts as problems to be solved. In the author's view they are not, and not
only will problem solving not address an organization's oscillation, it
can even cause it.
Structural conflicts are simply structures that are inadequate to
accomplish our ends, which leads to the seventh law of
organizational structure:
Law 7: An inadequate organizational structure cannot be fixed. But
you can move from an inadequate structure to a suitable
structure.
The focus needs to be placed on understanding why the organization
finds itself in its current situation and redesigning its structure,
rather than looking at the situation as a problem to be fixed.
* Chapter 8: Structural Conflicts of the Rich and Famous
The purpose of this chapter is to be able to recognize specific
structural conflicts in our own organizations that occur in organizations of
all sizes, and to be able to recognize other structural conflicts when
we see them.
According to this chapter, organizations typically oscillate
between:
- Expansion and limitation
- Strained workload and budgetary constraints
- Profit goals and expansion goals
- Investment and cost cutting
- Stock performance and reinvestment
- Short-term and long-term demands
- Desire to control and desire to include others in decision making
- Desire to act and potential risk
- Growth and stability
As well, layers of structural conflicts combine to create a wider
magnitude of oscillation.
By learning to recognize oscillation in our own organizations, we
can begin to describe the competing tension-resolution systems that form the
structural conflict and better understand the structural forces that
are at play and that need to be addressed in order for the organization to
advance.
* Chapter 9: How to Address Structural Conflicts. The Key to
Structural Redesign
Reemphasizing that structural conflicts are not problems to be
solved but structures that need to be redesigned, this chapter provides the key
principle in redesigning structural conflicts - hierarchy.
Establishing a hierarchy between competing goals is the key to
structural redesign.
If there are two or more competing goals, the organization will be
in and remain in a state of oscillation and structural conflict. By
defining our primary goal we can move to a state of structural tension.
The eighth law of organizational structure introduced in this
chapter states:
Law 8: When a senior organizing principle is absent, the
organization will oscillate. When a senior organizing principle is
dominant, the organization will advance.
PART 3 ELEMENTS OF DESIGN. MOVING FROM THE ROCKING CHAIR TO A
FERRARI
* Chapter 10: Purpose. What Unifies the Organization
This chapter emphasizes that all organizations need to have an
identifiable purpose or reason to exist.
When an organization's actions contradict its desired purpose, the
organization will oscillate.
The fundamental structural tension that needs to exist is the
difference between the desired expression and the current expression of its
purpose.
This will change over time, since the organization's purpose is not
fixed but continues to grow and develop.
* Chapter 11: Business Strategy. The Path of Least Resistance is
Our Purpose
This chapter emphasizes that we create the path to least resistance
that leads to the fulfillment of our purpose through the organization's
business strategy - we build a business around the purpose.
The business strategy is the process that resolves the structural
tension between the organization's purpose, and the current expression of
that purpose.
It expresses the purpose of the organization and defines how wealth
is generated.
The management strategy puts the business strategy into practice by
defining how work gets done through the coordination of people,
systems, and other resources.
The chapter offers a number of questions that need to be asked when
developing a business strategy:
- What is our offering?
- Who are our customers?
- What do they want?
- What do we want?
- Is there a match between ours and their wants?
- How do they know about us?
- How do they obtain our offerings?
- What is the current market?
- What is the future market?
- How will our offerings change?
- Where are we going?
* Chapter 12: Frames. The Best Way to See Reality
This chapter outlines that a structural approach requires
dimensional thinking - thinking in multiple units - rather than the usual linear
thinking.
Of the three frames of reference for thinking - close-up, medium- or
long-shot - the medium-shot is advanced as the preferred frame of
reference for structural thinking and the best way to see reality.
* Chapter 13: Discovering Our True Vision
This chapter outlines that vision is the other element in addition
to a clear picture of reality that forms structural tension. An
organization that lacks vision cannot create structural tension and will
oscillate.
Vision is seen as aspirations and values of an organization.
Without a clear vision, an organization often lets its reactions to prevailing
circumstances guide its direction.
Advancing organizations have clear aspirations and values and take
actions that are true to them. Oscillating organizations don't.
* Chapter 14: The Power of Shared Structural Tension
This chapter purports that a shared vision is the prime generative
force that powers successful organizations.
It is a great vision that engenders great values.
This leads to the ninth and last law of organizational structure:
Law 9: The values that dominate an organization will displace other
competing, lesser values.
However, what is more powerful than a shared vision is a shared
structural tension, which occurs when people not only share the vision but also
the current reality of the organization.
* Chapter 15: Organizational Greatness. Building on Structural
Tension
This chapter makes the point that organizational greatness is found
in how an organization takes a stand for its aspirations and values.
And to achieve organizational greatness, the following elements must
be in place:
- Power is distributed widely and evenly
- Local interests are managed with overall interests in mind
- The organization becomes a social force
- Principles determine policies
- Expansion is clearly defined
- Resources are managed within a comprehensive design
- People are continually aligned systematically.
* Epilogue
The epilogue reinforces the main points of the book and urges people
within organizations to think and act structurally.
* Appendix: Some Afterthoughts and Add-on Points
The appendix looks at the recent interest in self-organizing systems
and predicts that they will tend to produce oscillating behaviour within
an organization as local forces gain strength and power, and begin to
clash with each other.
With self-organizing systems there is an inability to use and create
structural tension as the prime force within an organization.
The appendix looks at the concept of an orchestra which is composed
of many highly skilled individuals who are brought together and perform well
as a unit based on a prime, unifying theme and concept, which is in
direct contrast to the concept of self-organizing systems.
The appendix also compares structural dynamics and systems thinking
and shows how they have many overlapping principles and parallel inclinations,
but different in important ways.
Within systems thinking the feedback loop is the basic unit. Within
structural dynamics it is tension resolution.
Structural dynamic practitioners will analyze the various
tension-resolution systems within an organization that vie for
dominance.
They will then work to set up new dynamic relationships of
tension-resolution systems to advance the organization and have it
move along the path of least resistance.
MY THOUGHTS ON THIS PUBLICATION
* As Peter Senge points out in his forward to this book, Robert
Fritz has a completely different way of looking at organizations and how they
need to be structured and operate.
* Structural tension has the potential to be the unifying concept
that helps pull NPOs together and point them in the right direction - the
direction that they collectively choose.
* Taking a hard, realistic look at their structure and its impact
on its ability to achieve what it has set out to achieve is difficult for
many NPOs.
* This in very unfortunate, since the best strategic plan in the
world is not worth much unless the NPO asks itself whether it has the
structure in place that it needs to implement and fulfill the plan.
* In my view and experience, this is one of the main reasons why
many strategic plans collect dust on a shelf. They have little to no
impact on the day-to-day operations of the NPO because the next step of
determining how the structure needs to change is not addressed.
* As Peter Senge alludes to in his forward, if you want to fly you
have to have a vehicle that is structured to fly. There are basic
principles that have to be respected, but as we all know, there are lots of
different plane designs that do the job. You need to build one that flies the way
it needs to, to reach your objective.
MY RECOMMENDATION
* Every not-for-profit organization can benefit from the concepts
and approach in this book.
* If you take the reviews I have done on strategic planning and
the balanced scorecard, this book fits neatly in between the two. The
strategic planning references help you decide what your organization
is going to do, structural dynamics gives you a way of setting up or
modifying your structure to be able to achieve it, and the balanced
scorecard gives you a way of measuring how well you are doing.
* For many not-for-profit organizations this topic is very
important, since many are being faced with resource cuts that are forcing them
to reexamine how they are and need to be structured under this new
reality, and there are many who have had the same structure for many years
and the question should be asked whether structural changes to the
organization need to be made.
* Applying the principles and concepts of structural dynamics may
be a bit unnerving, but the consequences of not doing so may be far more
difficult to face.
WHERE THE PUBLICATION IS AVAILABLE
* This publication is available from many sources, including:
Chapters:
Website: http://www.chapters.indigo.ca
Cost: CDN $29.95
Robert Fritz:
Website: http://www.robertfritz.com/home.htm
Cost: US $18.95
ROBERT FRITZ WEBSITE
* Visit Robert Fritz's website. There is lots of material here to
give you a better feel for what he's all about.
MY NEXT E-MAIL REVIEW NUMBER 17 Winter 2003
* Topic: Revenue Diversification for NPOs.
* In past reviews I have looked at concepts such as venture
philanthropy.
* In my next review I will take a look at a book published this
year by the Canadian Society of Association Executives on revenue
diversification for NPOs:
A Guide to Revenue Diversification for Directors of Non-Profit
Organizations. Venture Philanthropy, Commercial Ventures and
Venture Capital Opportunities for Associations, Charities, and
other Non-Profit Organizations. 2003. Pepin, John. Toronto,
ON: Canadian Society of Association Executives.
ISBN: 0-921998-34-1. 72 pages.
* When NPOs do a strategic plan this is almost an inevitable
conclusion and recommendation - that the organization needs to increase its
revenue and diversify its revenue sources.
* This makes sense, since most NPOs could do with more money. What
makes even more sense is to diversity those revenue sources so that the
organization does not rely on too few sources, which if lost
or reduced, has the potential to cause anywhere from minor financial
instability to catastrophic financial consequences for the
organization.
PAST E-MAIL REVIEWS
Number 1, October 2000
THE POLICY GOVERNANCE FIELDBOOK. PRACTICAL LESSONS, TIPS, AND
TOOLS FROM THE EXPERIENCES OF REAL-WORLD BOARDS. 1999. Oliver,
Caroline, General Editor, et al. San Francisco, CA: Jossey-Bass
Publishers. ISBN 0-7879-4366-5. 242 pages. Cdn $44.95. US $29.95.
Number 2, January 2001
POOR RICHARD'S WEB SITE. Geek-Free, Commonsense Advice on
Building a Low-Cost Web Site. Second Edition. 2000. Kent, Peter.
Lakewood, CO: Top Floor Publishing. 422 pages. US $29.95.
ISBN: 0-9661032-0-03.
POOR RICHARD'S E-MAIL PUBLISHING. Creating Newsletters,
Bulletins, Discussion Groups, and Other Powerful Communication Tools. 1999.
Pirillo, Chris. Lakewood, CO: Top Floor Publishing. 344 pages.
US $29.95. ISBN: 0-9661032-5-4.
POOR RICHARD'S INTERNET MARKETING AND PROMOTIONS. How to
Promote Yourself, Your Business, Your Ideas Online. 1999. Kent, Peter,
and Calishain, Tara. Lakewood, CO: Top Floor Publishing.
404 pages. US $29.95. ISBN: 0-9661032-7-0.
Number 3, March 2001
THE FIFTH DISCIPLINE. The Art & Practice of The Learning
Organization. 1990. Senge, Peter. New York, NY: Doubleday.
423 pages. Approximately CDN $38.00. Prices seem to vary.
ISBN: 0-385-26095-4.
THE FIFTH DISCIPLINE FIELDBOOK. Strategies and Tools for Building
a Learning Organization. 1994. Senge, Peter, et al. New York,
NY: Doubleday. 593 pages. Between CDN $38.00 - $45.95.
ISBN: 0-385-47256-0.
THE DANCE OF CHANGE. The Challenges of Sustaining Momentum in
Learning Organizations. A Fifth Discipline Resource. 1999.
Senge, Peter, et al. New York, NY: Doubleday. 596 pages.
CDN $55.00. ISBN: 0-385-493223.
Number 4, May 2001
THE ART OF FOCUSED CONVERSATION. 100 Ways to Access Group Wisdom
in the Workplace. 1997. Stanfield, R. Brian. General Editor.
Toronto, ON: The Canadian Institute of Cultural Affairs (ICA
Canada). 222 pages. CDN $31.95. ISBN: 0-921690-57-6.
Number 5, July 2001
STRATEGIC SAFARI: A GUIDED TOUR THROUGH THE WILDS OF
StRATEGIC MANAGEMENT. 1998. Mintzberg, Henry, Ahlstrand, Bruce, and
Lampel, Joseph. New York, NY: Free Press. 406 pages. CDN $38.00.
ISBN: 0-684847-43-4.
Number 6, September 2001
DUTIES AND RESPONSIBILITIES OF DIRECTORS OF NON-PROFIT
CORPORATIONS. 1999. Kelly, Hugh M., Q.C. and Frederick, Mark R. Toronto, ON:
Canadian Society of Association Executives (CSAE). 36 pages.
ISBN: 0-921998-16-3.
VOLUNTEERS & THE LAW. A GUIDE FOR VOLUNTEERS, ORGANIZATIONS
AND BOARDS. 2000 Edition. Third Edition. Vancouver, BC: The Law
Foundation of British Columbia, The People's Law School, and
Volunteer Vancouver. 71 pages. ISBN: 0-88847-131-9.
Number 7, November 2001
THE ENTREPRENEURIAL NONPROFIT EXECUTIVE. THE MYTHS. THE
MONEY. THE PEOPLE. A GUIDE TO PRUDENT RISK-TAKING IN THE
SERVICE OF A LARGER MISSION. 1991. McLaughlin, Thomas A. Rockville,
Maryland: Fund Raising Institute, A Division of the Taft Group.
ISBN: 0-930807-22-7. 264 pages.
Number 8, January 2002
EFFECTIVE CAPACITY BUILDING IN NONPROFIT ORGANIZATIONS.
August 2001. Prepared by McKinsey and Company. Published by
Venture Philanthropy Partners, an entrepreneurial venture of the
Morino Institute. 120 pages. www.venturephilanthropypartners.org.
Number 9, March 2002
THE BASICS OF PERFORMANCE MEASUREMENT. 1997. Harbour, Jerry L.,
Ph.D. New York, NY: Quality Resources. ISBN: 0-527-76328-4.
70 pages. CDN $12.50.
THE BALANCED SCORECARD: TRANSLATING STRATEGY INTO ACTION.
1996. Kaplan, Robert S. and Norton, David P. Boston, MA: Harvard
Business School Press. ISBN: 0-87584-651-3. 322 pages. CDN
$47.50.
THE STRATEGY-FOCUSED ORGANIZATION. HOW BALANCED SCORECARD
COMPANIES THRIVE IN THE NEW BUSINESS ENVIRONMENT. 2001. Kaplan,
Robert S., and Norton, David P. Boston, MA: Harvard Business School Press.
ISBN: 1-57851-250-6. 400 pages. CDN $47.95.
Number 10, May 2002
VENTURE PHILANTHROPY 2001: THE CHANGING LANDSCAPE. The Morino
Institute. Prepared by Community Wealth Ventures, Inc.
www.venturephilanthropypartners.org.
Number 11, July 2002
HIGH PERFORMANCE NONPROFIT ORGANIZATIONS. MANAGING
UPSTREAM FOR GREATER IMPACT. 1999. Letts, Christine; Ryan, William, P.;
Grossman, Allen. New York, NY: John Wiley & Sons, Inc.
ISBN: 0-471-17457-2. 207 pages.
Number 12, September 2002
BALANCED SCORECARD STEP-BY-STEP: MAXIMIZING PERFORMANCE
AND MAINTAINING RESULTS. 2002. Niven, Paul R. Toronto, ON: John
Wiley & Sons. ISBN: 0-471-07872-7. CDN $67.50.
Number 13, November 2002
"AFTER GOVENMENT CUTS: INSIGHTS FROM TWO ONTARIO
'ENTERPRISING NONPROFITS'." in THE NONPROFIT SECTOR IN CANADA:
ROLES AND RELATIONSHIPS, pp. 107-148. 2001. Banting, Keith, editor.
Kingston, ON: Queen's University School of Policy Studies.
ISBN: 0-88911-813-2. 266 pages.
Number 14, January 2003
PRIMER FOR DIRECTORS OF NOT-FOR-PROFIT CORPORATIONS. Rights,
Duties and Practices. 2002. Broder, Peter, co-ordinating editor.
Ottawa, ON: Industry Canada. ISBN: 0-662-32550-8. 99 pages.
Number 15, May 2003
THE WORKSHOP BOOK. FROM INDIVIDUAL CREATIVITY TO GROUP
ACTION.2002.
Stanfield, Brian R. Toronto, ON: The Canadian Institute for
Cultural Affairs (ICA Canada), and Gabriola Island, BC: New Society
Publishers (co-publishers). ISBN: 0-86571-470-3, 171 pages.
If you would like a copy of a previous review, please send an e-mail
request to dgolob@telus.net.
Donald Golob
Donald Golob Consulting
Facilitation, Strategic Planning, and Organizational Development
Specializing in Services for Not-For-Profit Organizations
2522 Kilmarnock Crescent
North Vancouver, BC V7J 2Z5
Tel: 604 988 3273 Fax 604 988 3285
Email: dgolob@telus.net
Member International Association of Facilitators
Member International Association for Public Participation
One of the Leading Not-For-Profit Sector Consultants in Western Canada