[Greatest Hits] “What Works: Organizational Design” with Amy Kates, Organization Design Expert, Consultant, Educator, and Author

Speaker A: Foreign

Speaker B: hey there and welcome to a special Greatest Hits episode on the Future of HR podcast. I just got back from a two week family vacation in Portugal and Madeira, and this was only the second time in my career that I've been able to take two full weeks off in a row. And we had an, um, amazing time. If you ever get the chance to visit either one, take it. Between being fully present with my family, which was the point of the last two weeks, and the Fourth of July holiday happening here in the U.S. i decide not to publish a new episode. Instead, I am rerunning one of my greatest hits, My Conversation with Amy Cates. Amy is a consultant, educator, author, and one of the most respected experts in operating model and organizational design. She co founded Kate Kessler Organizational Consulting, which Accenture acquired in 2020, and she's authored five of the leading books in the field. Her approach and tools that she's developed with her colleagues have become the standard design methodology used around the world. And I picked Amy's episode for a reason. Over the past few months, I've had more than 20 conversations with CHROs who are clients, podcast guests and friends. And one theme keeps coming up time and time again. Organizational transformation. CEOs and boards are pushing for it, driven by AI and rising customer demands. And the chros I talk to know that to lead organizational transformation, their own HR teams have to transform as well. But here's the part we're not talking enough about to drive transformation.

Speaker A: Ah.

Speaker B: HR leaders need to understand and lead organizational design at scale. And that's exactly what Amy teaches, writes about, and knows better than anyone else. And that's why I consider this one of my greatest hits podcasts. So even if you're experienced in organizational design, I promise you're going to learn something from Amy in this conversation, and I think you're going to think it's really useful. And if you do, please share it with someone on your team or in your organization who might benefit. Now, we'll be back next week with episode 200. 200 episodes. It's a major milestone not only for me, but for the podcast. And I'll be doing a solo episode where I share my key insights and what I've learned. After 200 conversations about the future of HR. It's going to be great, so don't miss it. Thanks again for being part of the future of HR community. And with that, here's my conversation with

Speaker A: Amy, in which you start with strategy. What kind of organization do we want to build? What culture do we need? How are we going to compete and win? What choices have we made about how we're going to grow and where we're going to play? Then the next set, uh, questions is what capabilities do we need? What new organizational muscles do we want to build? And Jay's great insight was, first, depending on your strategy that will shape the organization, there's no one best way to organize. And number two is that a leader has four levers pull. One is structure, which is really about power, the architecture, roles and leaders, and who sits around the table to make decisions. The second are processes. How do we design conversation and decisions and move information across the organization? The third is metrics and reward. We motivate and inspire people and align what they do and where they spend their time. When they wake up in the morning, come to work with the mission of the organization. And then finally our people practices, which are all the choices we make around. Who do we hire? Do we grow or do we buy talent? How do we compensate? How do we learn through learning and development and think about the employee lifecycle. Those four levers create a system that builds capabilities, that, uh, create the culture that we want, the performance that we want, and allows us to not only deliver on the business strategy, but what's really important to me is to make a great place to work.

Speaker B: Why is organizational design much more than org charts? And who reports to whom? How can HR guide, facilitate and drive an effective organizational design process? Hi, I'm your host, JP Elliott, and this is the Future of HR Podcast, the only podcast whose mission is to inspire the next generation of HR leaders. On each episode, I interview successful HR executives and thought leaders who are reimagining, rethinking, and leading our field into the future. During our candid conversations, you will learn

Speaker C: about their career journeys, their lessons learned

Speaker B: along the way, and and their insights on how to take our field, and

Speaker C: most importantly, your career, to the next level.

Speaker B: Amy, welcome to the Future of HR Podcast.

Speaker C: How are you?

Speaker A: Jp thank you so much for having me on. I'm terrific today.

Speaker C: Well, this is an honor. I'm really excited to have you on because organizational design is something that I'm very passionate about and I've had many different opportunities in my career to, uh, actually do org design. And I have to thank you for that because I really have leveraged your books and materials as that playbook and so excited to have you in the podcast today.

Speaker B: What I want to do is start

Speaker C: off and just talk a little more about you. You are one of the world's most renowned experts on Organizational design. Can you tell us about your early career and how you found this passion and then developed your expertise in this area?

Speaker A: JP When I think about my career, I think about three people who are really important. The first one was Diane Downey, who I got a chance to work with from around 1990 to 2004. She had an org development practice. I joined her. It was just the two of us. We grew it to maybe a dozen folk, but she was a huge fan of Jake Albra. And it was through Diane that I learned a couple of things. I learned the consulting world and consulting skills. I learned about organization development and the real humanistic roots of that and also her passion around involving people and really shaping their future and the importance of that. Jake Albreth is clearly one of the most important people in my professional career. I met him through Diane. He asked us in 2000 to write a workbook for him. And that was my introduction to organization design. At the age of 36. I found my passion, I found what I was meant to do, which was to take great thinking about systems and what seemed quite mystical to people about how do you design an organization and turn it into a set of frameworks and tools and methodologies that business leaders and HR leaders could use. So powerful to think about this invisible system that shapes human behavior at scale. I, uh, worked with Jay up until his unfortunate passing in 2014. But back in 2008, I met the third most important person in my professional career, which is Greg Keppler. We were both invited to be on the editorial board of the journal People and Strategy. Found that we had similar values and we joined forces back in 2010 until the time that we were acquired in 2020 by Accenture. So our little firm, Kates Kessler 10 folks, pinnacle of our career was to first be asked by Julie Sweet, the new CEO of Accenture, to consult to her as she thought about her own organization and then for her to actually acquire us. So I spent the last four years at Accenture going from the 10 of us that joined to a global practice of 150, all using the J. Galbrais methodology and just left there in March to go back to private practice.

Speaker C: That's a really incredible story and I love how you found your passion around Org design. But I love more that you had three people that really influenced you and you told the story that way. You think about the impact you can have, whether it's a mentor, a boss, a teacher, a coach. They really do shape where we're going to go with our careers. When someone believes in us and gives us that opportunity and you start to, uh, magic happens right when you've got the right people there.

Speaker A: I totally agree. I think particularly in these fields where there's a craft in HR and organization development, design, talent, follow people. I tell young folks now to follow people that they can learn from. Don't worry about even the company you're working for or what the business is doing is what am I going to learn? Who's going to inspire me.

Speaker C: That is great advice and I think it is an apprenticeship style, especially organizational development or design. But I think even hr, you learn from those around you. You know, you can only get so much out of a book. You really have to go see it applied in real life. And, uh, when we talk about applying organizational design. Amy, a. M. Lot of leaders, when they hear that term M, they're like, oh, sure, org charts and who reports to who. But we know there's a lot more to organizational design than just boxes on an org chart. How do you explain and define organizational design to leaders?

Speaker A: Yeah, it's a great question. For sure. The org chart is an outcome. We want to know who do we report to? But it's not a design tool. When we think about org design, what are we designing? We're designing human behavior at scale. And again, the best way that I've ever seen to think about shaping behavior at scale is Jay Galba's star model, in which you start with strategy. What kind of organization do we want to build? What culture do we need? How are we going to compete and win? What choices have we made about how we're going to grow and where we're going to play? Then the next set questions is, what capabilities do we need? What new organizational muscles do we want to build? And Jay's great insight was first, depending on the strategy that will shape the organization, there's no one best way to organize. And number two is that a leader has four levers to pull. One is structure, which is really about power, the architecture roles and leaders and who sits around the table to make decisions. The second are, uh, processes. How do we design conversations and decisions and move information across the organization? The third is metrics and reward. How do we motivate and inspire people and align what they do and where they spend their time when they wake up in the morning, come to work with the mission of the organization. And then finally our people practices, which are all the choices we make around. Who do we hire? Do we grow or do we buy talent? How do we compensate? How do we learn through learning and development and think about the employee lifecycle. Those four levers create a system that builds capabilities, that create the culture that we want, the performance that we want and allows us to not only deliver on the business strategy, but what's really important to me is to make a great place to work. We spend so much time at work that I feel that organization design is not just a technical task to make an efficient and effective organization and a business, but actually to create an environment where people can come, um, and really feel that they can contribute and bring their talent.

Speaker C: Yeah, it's important to come back to what we're trying to do. Obviously we've got a customer, we're trying to create competitive advantage and a profit, but we also want to create an amazing employee experience and a place people want to stay and grow and give their full talents to. But I really like about how you talked about organizational design using the J Gallbroth model, the STAR model, because it sort of broadens your view a lot of really what org design is. And I think for a lot of leaders they're like oh wait, I didn't think I could pull that lever or I'm not thinking about it very consciously because you assume that's just the way it's always been done. Right. We've got this practice we have. This is how we reward people like oh, we can change those things. And so you're really challenging the status quo by having a fuller, bigger picture that uh, Jay and you've really put out there.

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Speaker C: Let's talk a little bit about how we get into organizational design. And when I think about organizational design, in my experience, it really starts with having a really very clear understanding of the problem you're trying to solve. But I'm wondering, Amy, in your experience, when should leaders be considering org design as a potential solution? And what are the common business problems they're likely trying to solve?

Speaker A: It's a perfect question right now because we are working on a new book, which will be the sixth that I've contributed to. Greg Kessler and I are writing it with our new colleagues from Accenture to bring together all of this foundational thinking that we worked on around um, the star model and the design process together with the tremendous asset and capabilities of Accenture, which is around data and technology and um, really building complex systems and operating them. The book is actually organized and around six challenges that leaders face in organization. And so they are growth and innovation, right? How do we find new sources of products and services and experiences to bring to our customers and our clients? And how do we move into adjacent spaces and innovate and reinvent our business continuously? Conversely, another challenge is cost complexity and productivity. As we get big, we tend to grow a lot of overhead. Expenses can grow faster than revenue. We create what we call unrewarded complexity, which is all the internal wiring that never sort of gets cleaned up along the way. So how do we think about beyond simplistic things like spans and layers to really reduce complexity that isn't adding value to the business? The third is for sure, new technologies. I mean gen AI and thinking about how that is going to change work and automation and new Work and possibilities it will create. Don't ask me. I don't think we know yet. The fourth is agility. And this is not agile, just like team agile. This is organization agility. How do we be both big and fast? I think that's almost the number one question that clients come to us with. Our colleague Billy Carbery, who is one of the best thinkers on this topic, is is writing that chapter and he's come up with some really great insights around thinking about how you think about organization, business unit agility and team agility together to really create enterprise agility. The fifth is mergers and acquisitions. Change the business portfolio. That certainly triggers Org design. And the last is an interesting one around sustainability. Responsible business. Not just compliance, which is a big issue and has to be designed for, but new demands from consumers. And this ties back to innovation what is truly going on in the world and the complexity of what's unknown and what are what clients and consumers want to actually create new products and services that are responsible and good, not just for business, but for the planet.

Speaker C: It's really helpful to hear the different problems organizations are trying to solve. And what's really struck me as you talked is just how comprehensive it is because organizational design touches every aspect of a company and to be competitive, all those things have to be aligned. So it makes perfect sense that organizations are looking more and more to organizational design in a broader view to tackle challenges like growth and innovation, reducing complexity, be big and fast and agile, which is not easy to do. Uh, right. Sounds great on paper, A little more challenging when you get into real life. So I'm excited to hear about that and excited to hear about the book around that piece.

Speaker B: One of the other.

Speaker C: I guess when I think about one of the most critical steps or one of the first steps you might take in an organ design process is to develop and align the design criteria. And I wonder if you could talk a little more about that process to come up with the design criteria that starts to help understand are we going to solve that business problem we just talked about for growth and innovation? Are we going to be big and agile? Like, how do we know that this organization we're designing will actually meet the goals we want to achieve?

Speaker A: Thank you for asking about this. I think design criteria, they're often overlooked. But in the design process, a really powerful part of it. Org design. The word design is really important because it is a design process just like any of the other design fields. Whether you think about architecture or you think about software design or any kind of thing where you are creating something new, even if it's a redesign of what exists to think about what are we really trying to build? So that piece between strategy, we have a business strategy, how are we going to win, where are we going to play? And then there's all the practical matters of creating this system and moving those layers. But in between is this piece that how will we know that we are building an organization that's going to deliver on our strategy? It's the logic piece between the two. So we think about these as organization capabilities. What can we do better together in the organization that our competitors can't? So by definition an organization capability and these capabilities then become our criteria. They are cross business. We can't hire them in with a smart person, a digital leader that doesn't make us a digital company or a great marketer doesn't make us a great marketing company. They don't sit within one function. They are the kind of value streams that cut across. They're hard to do because it requires collaboration, it requires trade offs, it requires making decisions about where must we be good, where must be we fast, where must be cheap, cost effective and managing all of those kinds of tensions that are in any organization, but managing them well to come up with not consensus decisions, but really collaboration that yield something better. So the idea of an organizational muscle that we want to build, let's say we need to be more innovative and get products, take all the ideas that are in the organization and test them and commercialize them, get to out to market faster than we have. Or conversely, we might need a capability in which we are able to make decisions to reduce variability instead of doing things 150 different ways. We actually decide on five archetypes of how we are going to manage our business and align around that and then design around that and list to that. These are hard things to do across the business. So these are uh, design criteria and then we can generate options and really the true essence of design, of creating alternatives and evaluating them against this design criteria. When we skip design criteria, when we skip this idea of capabilities and say, well, we have some goals, we have a strategy, let's design the organization. We don't know, we don't have a logic. And what happens without that logic is then because we are now dealing with power, we're dealing with people's jobs, we're dealing with status, we're dealing with as you say, the way we've always done things, which has worked. So there is fear of change, which is natural. The new design can be pulled Apart, if we don't have these capabilities and design criteria to say, ah, here is our logic flow and therefore if we want to do this, we have these choices. These are the trade offs. And now we are making a choice with our eyes wide open. We can align on it.

Speaker C: Really helpful to hear that. And I think this is Albert Einstein's quote that talks about if you had 24 hours to solve a problem, he'd spend the 23 hours defining the problem. Something like this. But what you're saying is that if you're going to do an organizational design process, you need to spend a lot of time in this design criteria to understand what the end is and what this vision's gonna look like before you get into design phase. Otherwise you're gonna be designing something that uh, you may or may not think is gonna solve that problem. So is that accurate?

Speaker A: Absolutely. And it may not take a lot of time. And I think JP that's what scares leaders or it feels like, oh, this is gonna be complicated and we know what the problem is. Asking my consultant or asking my HR team to give me options and now they're asking me about all these questions. The key is to really listen, whether we're an outside consultant or an internal consultant, to really listen. And I like to call it the design intent to capture. And it might just be a one page document 24, 36 months from now, this is the organization we're going to build. It doesn't talk about the details of it, but what is this organization going to be able to do that we can't do today? So we're going to be able to perhaps it's a uh, strategy is about geographic expansion. So we're going to be able to take our success formula in the United States if that's the home country. And we're going to be able to bring that into new market, customizing it to the local context while maintaining what's essential about the brand or the product or whatever. That's a capability. Because that's not easy if you think about that's going to take product folks and marketing folks and operations folks and the regional leaders working now with the US leaders together to design that. Uh, but now we have said this is what we're going to be good at this we're going to design tool and we're going to practice. And that designate intent then gives us that picture in the future. It might take time to get to it. We may be able to pull it together quickly but we absolutely can't move forward on Design without.

Speaker C: And then Amy, once we've got our design criteria and we're starting to move into the design phase if you will, and making choices, what should leaders be thinking about? Or maybe what mistakes do a lot of leaders make in this next phase? That I've seen a few. But I'm curious what you see in terms of what should happen next.

Speaker A: I'd love to hear what you think. I think you alluded to it is depending too much on structure because structure is something we can see at least on a piece of paper. Uh, it's the most tangible element of uh, org design that goes beyond just word, uh, at least to start with. So thinking that org chart is what we are designing. So we use the notion of an organization model to show the pieces and the relationship to them well before we get to any sort of org charts because we want to start with an org model because again that's about power. Who makes decisions? What part of the organization takes leadership, the setting, business strategy, what parts are supporting, what parts are delivering, how then do we link it together? Again create the right business and management processes and decision making. Most leaders are surprised that there's only really four ways to group work together. You can group by function, by expertise, by product line, by geography or by customer segment. And then you can create a matrix, three or four dimensional matrix to create combinations of these. But you never have a balanced matrix. There is always a primary organizing logic and this is a decision. This is where leaders have to have courage to say geography is our center of gravity. The nature of our business is to we need to really localize. We really close to the customer, our competitors are local and then brought ups. We need global product but it's going to create 80% kind of product that's going to be 20% localized. Here's how we're going to make decisions around that. That's the kind of decisiveness and courage leaders need to have to be able to be very clear how the organization is going to operate. Now the leader doesn't have to know all of this. That's why we have a design process to come up with the options, to really think them through, to play them out. But at the end of the day someone has to make a decision with a client to start. We talk about those. We're going to try and make it as easy as we can for you to make good decisions. But there will be some tough decisions along the way. I'm curious about what kinds of things that you see J.P. yeah, I think

Speaker C: when I go through These processes, I think a lot of leaders really jump to the people, they want to get very quickly to the org charts. They don't want to have the conversations about structure and power, the integrated mechanisms of how things are going to work in terms of are we going to be more geography focused, more product, more functional based. I mean, those conversations, when I've had those, you have to really shift it to a business strategy and kind of not use academic language and start to say, okay, well where are we driving revenue and where should we have the most resources? And you kind of get into that same conversation. But, uh, a lot of leaders, especially when you're doing this internally, I think it's a lot harder when you're external. There's an expertise that you're bringing in. We're bringing in Amy, oh my gosh, and Accenture, whoever, and Greg and we're like, okay, we're. You're the gurus. We're going to follow your process. When you're an internal HR leader, which we'll get to, it's a little more challenging because they're like, hey, I know the organization, I know you. I'll give you some design criteria. But the patience most leaders have to then go out and think about those two, three different options is challenging. So a lot of times what I have found to have to do is really build the structure for them, give them the options, and then facilitate that design criteria conversation to force them in the exercise. If you can do that and then you get to a good place. Others I've seen, hey, look, we're just going to bypass to org structure and charts and roles. And that's always can be a mistake sometimes.

Speaker A: The HR leaders are our partners in this work. You know, as external consultants, the business leader is the client, but HR is our partner. And as we work with HR as our partner, what we always say is when you are leading this internally, you need to meet the client where they are because otherwise you don't. They'll do it without you. That's the option. So meet the client. If it is from an org chart, then we say ask a few questions to understand or bring some options. And one of the best techniques that we have found to get leaders to not think about people, to think more about the work is actually to design a little bit into the future. Because if I'm designing What's exactly next? J.P. i'm thinking about your job and your role. But if we say 24 months from now, what are we designing to that lets us put the ideal out There can all be in different places, take the names out of the box and then we can say, all right, that's not quite practical. What would be some steps? What would be the next, the roadmap that we would build toward that. And then we have to take into account people. But we understand then the chess game and we're making decisions, we're saying, ah, we're going to combine that we're going to make a big job there. We're going to think about so and so is going to retire in a few years. We'll leave him in his position. But we understand now the difference between talent decisions and using the talent and the people that we have and keeping them motivated and designing jobs that fit them. And then where we may be making compromises or have gaps or need to fill in or need to do some hiring or need to support because the organization model needs something different. Now we can work, we can say, what's a hiring need? What's a developed need? Where do we need a coat? Where do we have someone in a stretched position? We better have a stronger team underneath. Now all of a sudden the HR leader has a whole lot of insight that can be brought and all kinds of tools that can be brought. If we can just get that leader to agree to let's do some design 24 months out rather than what's the next or char move.

Speaker C: Uh, that's really great advice because it does shift the lens of focus to say, hey, what do we need to have in 24 months? What should the organization look like versus today, which most organizations and leaders, rightly so are focused on next quarter, today's results. And frankly, all of us are pretty bad about predicting the future. We like to believe we can, but we're pretty much day to day focused. It's just, that's our nature. So I think it's a great, great suggestion for HR leaders, but I think it works for other areas of talent as well. Always think about where are we going, what do we need to build? Hey, before I talk about HR's role in this a little bit more, I did want to go back to matrix organizations. That has become the norm. And I think some people really struggle in a matrix. Some organizations are great at this. What would you be advice on, uh, making a matrix work or what does that look like when a matrix is working from your perspective?

Speaker A: So a, uh, matrix allows us to do two things at the same time. For example, we have a business that is global, so we are organized by country or region, which is allowing Us to strategically be close to our uh, customer with different go to market, maybe we deliver our product for retailers and the retail landscape is very different country to country, market to market. We have to package things. It's not just language but packaging and advertising and how it's sold and our partners and channels that we need to be close. But we have a product organization also that has a set of categories or brands or product lines that we are innovating and we're putting technology or investing in that we really need to deliver globally that we don't want to. And our customer is buying a brand, right? So they want to know that what's coming through has some global consistency and the brand has value. So a matrix allows us to do both of those. If we can manage again all of those trade offs at the nodes where we have issues of uh, that product customization, that localization, pricing, inventory assortment and category and thinking about what customer segments that we're going to go after and again what kind of partners we're going to use to go to market. The key to a matrix is to understand that the organization has been set up now for conflict. But it's good conflict if we can make good trade offs at those nodes. We are making more sophisticated decisions than our client who is just um, our competitor who is just local or who is just having global products and not customizing them locally. But that's hard. So that's a capability. Running a matrix is a capability and so it has to be intentional and it's around understanding, structured collaboration, good decision making, planning together, early playing. The most probably the number one failure in the matrix is that each dimension, and again you could have three, four dimensions, but each dimension is doing their own planning and optimizing and it doesn't come together until too late when we're at the moment with the customer or trying to make some of these trade offs that the whole planning process has to change to be done together. And so in a matrix the role of leaders changes. Of course each leader is still running their unit, whatever their piece is, but they have to understand that their job now is horizontal, that they will be spending more time with colleagues aligning, planning, monitoring, managing, making decisions, creating systems, creating clarity for the people who are sitting at the juncture in the matrix. And this is not a failure of the matrix, this is how the matrix works. And therefore then they often need a very strong operational layer to do the day to day. If we have an organization in which our sort of senior mid level leaders want to be down in the business with customers executing and see working horizontally as overhead as an annoyance, as not their work or the business is not set up so that they're supposed to do that in their own time or on the weekends or at night rather than that becomes the job well then the right conversation. And that's what makes the Matrix so frustrating. It's real for people who are sitting at that juncture and trying to be a product leader in a geography and make these trade offs and do what's right.

Speaker C: So insightful. A couple of light bulbs are going off me as we're talking about this. We hear the complaints about the Matrix from really working with leaders different, having different managers and the conflicts that come from that. But the fact that you said, number one, this is designed for conflict and it's good conflict. Number two, leaders have to think about how they value their time and what their role is differently.

Speaker B: One mistake I see.

Speaker C: Um, I'm interested just because you obviously are the expert on this. I have not seen many organizations who have actually taken the time to say and be intentional and upfront about this is our model, this is how we operate. We are a matrix. This is why. And as a leader, here's what we expect you to be able to do to manage that conflict so that we can deliver a product that globally makes sense and locally drive sales, whatever that happens to be. But I haven't seen a lot of organizations and I've worked in Matrix but I haven't seen a lot of organizations do that.

Speaker B: Is that the best practice or what

Speaker C: do you think people do here? Is it something we just don't talk about? Can we sort of figure it out?

Speaker A: Oh, uh, there's so much to it. It's a couple of thoughts. One is here's where HR I think can really have a big impact. Too often we do design. That is the fun part, right? We come up with a very elegant, sophisticated model that is optimizing everything says this is great for the strategy and everybody's then tired and said let's get back to work. And that's where the difference between Org design and Org development in my mind lies. We have design which is our intention, but if we don't bring it to life through what we call activation, through all our Org development tools, which allows us to practice new ways of work and that practice needs to be facilitated and monitored. And I think that's a role for hr, our ah, folks that are in org effectiveness roles and HR business partners to really facilitate those discussions and say are we practicing the intention of the Matrix, how are we making decisions? And it takes time because we only may have a marketing council meeting or a uh, products meeting quarterly, or we set strategy once a year. It may take two or three years in a big organization change to practice enough to be good at it. So one is staying with it. And when we think about the project, is not that just the design project, but it's actually the activation project. It's not just change management, teaching people new roles and new jobs, it's actually building new ways of working. And new mindsets don't come until we actually take new actions and have new discussion. The second thing, which is an interesting paradox, many paradoxes in organizations is that leadership teams that have worked a long time together, have grown up together, actually often manage the Matrix well because they have those good interpersonal relationships. Naturally they may not think about having a meeting to work um, on the Matrix to set a system to make a trade off. They're just picking up the cell phone and calling and saying, hey, we got a problem over here, let's work it out. Organizations that are growing rapidly, adding new leaders from outside that have come from different systems that are looking to perhaps bring in new competencies through those leaders actually then find managing the Matrix is really tough because you have so many different mental frameworks going on. And if you don't get everybody together and to build a common framework of how we're going to run the business, that's where you have everybody with good intent working at cross purposes. That brings us to a topic of how in a remote environment and all the questions of back to work and back to office and how we work effectively remotely where we see so important to build trust, working relationships, clarity in these power dynamics of the broad swath of leaders who actually have to work the Matrix together. I would say if you're going to bring leaders together, it should have always an agenda of trust building, of understanding of me saying, jp, what are your objectives? What keeps you up at night? How can I help you? What is your group? What's success for your unit look like? What should my group be doing? Where are the handoffs that are difficult? What should we be working on together? That's the conversation that HR can have help leaders have together and senior leaders should be really fostering.

Speaker C: Thank you for going deeper on the Matrix. I think that's really helpful to understand some of the complexity there and how to solve and be clear on how to move forward with that. And trust is critical across organizations. But I do think organizations can be much more clear about what they expect. And I think CEOs and senior teams should be aligned on how we're going to operate. And it's not easy always to do. As you said, the strategy page looks beautiful. And then when you get into the real life and there's trade offs and it gets more challenging. But the best organizations over time have developed that muscle. Amy, I do want to talk a little about HR's role in org design, but also about just HR org design in general. McKinsey had come out recently with HR operating models, five different new models that they believe were emerging. I'm not sure they're all that emerging, but we can debate this. I think everyone's got a different point of view on it, but there's five different models. But I'm more curious from your perspective, how do you think about HR and other support functions like from an org design perspective and what are the key decision points that really matter versus what is just sort of hype and maybe new nomenclature?

Speaker A: Yeah, no, I've looked at the McKinsey work and of course it's right, all of these are needed. The starting point is not what model do we want, but what is the business model and therefore what enabling function support is needed. So for example, if we have a company that has a portfolio of somewhat autonomous businesses, there's some connection. Maybe we share some core technologies but we're in very different customer segments. Well that would be McKinsey's leader led, what they call leader led. Of course you need HR to be embedded. We're going to be recruiting differently. The business that is basically a software business is looking for different people than the one that is doing manufacturing and therefore recruiting is going to be different. Performance management is going to be different. Managing that all from the center beyond some high level policies and common culture and guidelines would be a mistake. That's well known, right, that you would want to match your functional infrastructure to your, what we call our business configuration. How closely related are uh, the parts of the business and therefore then what is the role of the center? If we had a single business then we would have a more center driven HR common process and systems. I think what they call the machine powered model for sure. If we have a business in which most everybody has is in the same kind of role or in the same kind of job in which we can turn a lot of our HR processes to algorithm or to self service because we don't really have diversity of either countries that we're working in or employment markets or kind of job function. So once we start with that then you say well there's not different models. It's about designing a fit for purpose. And Ulrich's three legged stool which the business partner of HR operations at the center of excellence expertise is still kind of the basic one that works. And then you dial up and I think this is what the McKinsey models are. You dial up certain parts. Again, if your businesses are very different, your HR business partners are going to be much stronger because they need to have different human capital strategies. If talent is the idea of thinking about employee experience and employee life cycle and designing around that not new. And I can't think of any business that wouldn't say that attracting and keeping and retaining talent isn't the first thing on their list. So we see a lot of that. But what we have found actually the most important thing for a business is to think about all the functional infrastructure to together and use a common logic. So if we're going to use something called a business partner, it should mean the same thing whether it's a finance an it, an HR marketing strategy business partner. They're providing decision support to an executive team in a business unit for example. What this allows then is for a business leader to say these functional experts that sit around my table that are providing me decision support, helping me run my business, they're coming to me in the same way. When they talk about going back to their centers of expertise or uh, there's programs that are being rolled out, then we're all doing it with the same logic, it can be coordinated. And I think that's what the idea of global business services, thinking about hubs, thinking about all the functional infrastructure much more as a whole as a backbone and platforms for the business. Whether it's the part of the business that's really in the cash generating, not really growing, we're not investing a lot or maybe a startup piece or an acquisition that's very different or moving into a new geography, we can have them on a similar platform where all this infrastructure is working together. And that's only possible because of the technology that we have today. And this I really saw at Accenture and it's actually quite amazing. So beyond outsourcing and offshoring and low cost this but thinking about AI thinking about work completely differently on um, the back end to power the business. So that I feel like is much more exciting. Stay with the LRICH model as the base and then think about where do we connect the business, where do they need to be autonomous, what do we need to dial up, what do we not invest in? And then how do we use technology today?

Speaker C: So helpful to kind of get that logic flow from you and to uh, really understand that. What I'm hearing is some of this is old wine, a new bottle, a little bit, right?

Speaker B: And but the dialing up or dialing back.

Speaker C: But it all starts with the business strategy. So for HR leaders out there, don't lose sight of that. Like, how you're supporting the business makes sense. But the new wrinkle that I think is interesting is your chros need to go have conversations with your chief technology officers and your CFOs and your Chief procurement officer or supply chain officer and be like, are we supporting the business the same way? Are we thinking about this the same way? Because I think that does and can cause conflict when you see just, uh, different models, which I think is something I hadn't really thought as deeply about until now. Amy, question for you.

Speaker B: So we've got HR leaders that are

Speaker C: listening and they're probably about to embark on an organizational design or redesign project. What advice would you give them as they get started and where should they begin?

Speaker A: I would say there's a few things here. One is to have a methodology. Think about org design, not as an event, but a design process. So it's not just creating an org chart, but it is a process and there's just a few pieces. Keep it simple, right? If you're doing it, one is back to that business strategy. Get really clear. What ambition and work are we trying to support? There's no best practices or we need this model. We need to be like that company. What does our business need? So it's not about starting with the leader's philosophy. I like decentralization or had bad experience with shared services. What's the work? What's the work? So getting clear on that, whatever way that happens, documenting it, what good looks like, what are we designing to that idea of a design intent. Then the assessment. It's really hard internally. Jp, you said internal. HR is expected to know the business. Knowing the businesses and knowing the people is different than doing an assessment. An assessment is to really say, what is the gap between where we are today, which our, uh, current design has led us to and may be very successful. But given that we want to do something different or must do something different in the future, what is the gap? And naming that, that's what an assessment is. It goes beyond the symptoms or the pain points. It's understanding the root causes of, uh, what the gap between our ambition and our status quo is then the idea of using the power of the group of a design team, a leadership team or maybe a multi level design team to really generate option, to really focus on that word design, that we have to diverge before we converge. And the role of HR is neither an expert doing the work. What I counsel is never, never get yourself into the position where you go off and make a nice PowerPoint and come back with a, uh, recommendation. As a consultant, doesn't matter how expert I am, I never want to be across the desk from a client defending a design. So expert in the process and guiding but not coming up with the recommendation. On the other hand, you're not just a process facilitator. Okay, so group, what do you want to do? It's this idea of guiding and that's where the assessment work gives us those design criteria, gives us some options. Thinking here for internals, what I often say is work with a partner, another business partner or your OD specialist or a talent specialist to get another view on this. Because what's so hard internally is the challenge of objectivity here embedded in the business. And this is not something HR business partner does every day. So the idea of getting a few, if you're not using externals, getting a few internal colleagues in to really challenge and help you think bigger. M and then the work is to help the group think about consequences and trade offs. There's no one best design. Everything has a consequence. If we do this, we're going to optimize here, but we're going to create risk over there. How are we going to manage that? And that can be the most useful work that you do because you may jump into the project where they already actually have a design and it's pretty well formed at that point you say, so let's think about what could happen. Let's do our pre mortem, think about over the next 24 months how we bring this to life and what we need to be thinking about. Knowing the business, knowing the people, knowing the dynamics. When we work again, HR is our partner. Those are things we just don't know. I think the ideal when you're using also a consultant is not to outsource the work to a consultant, but to work shoulder to shoulder. And our best projects have been when we have worked with an uh, internal OD or business partner where it's really shoulder to shoulder, where we bring our unique expertise together to really guide a leadership team through this work.

Speaker C: Oh, uh, that's just a masterclass on ood. I Think for really helpful for a lot of HR leaders the key takeaway for me there is just really guiding the work, not doing the work. Don't be a pair of hands but really help those leaders through that process. But have a process, have an end in mind. And it's not a one time event that I think helping people think that through which isn't easy but that was really really great. Amy. Amy, last question for you that ask all my guests what is one word or phrase that you believe will define the future of HR over the next five to 10 years?

Speaker A: JP I was just at the Organization Design Forum conference in early May and of course one of the big themes there was Gen AI how it will change the way we do our work, how it will change work itself. So that an organization and uh, and a uh word that that was used over and over which I hadn't thought about was augmented and I like this word. So the idea of in this case it was Gen AI will not just replace, will replace some work but a lot of work it will augment. But when I think about HR I think about any sort of internal enabling function that is helping the business leaders be their best that the role of HR is to augment the business better thinking. Bring them some what John Boudreau used to call decision science those trade offs to really bring implications consequences of decisions to be that coach. But then also in the future this whole very exciting notion of that all of our work is going to be augmented through new tools. I don't think it's going to replace place what we do as HR business partners, OD or designs specialists because there's some magic that happens I think when people think together. But for sure we are going to see over the next few years a new augmentation through all kinds of new tools that we can use and that's going to define I think the future of HR over the next five to ten years.

Speaker C: Augmentation. Amy, thank you so much for being on the podcast and sharing all your wisdom on org design. This was a really fun conversation.

Speaker A: Thank you. A real pleasure.