Organization design comprises three factors: structure, incentives and culture.
These three factors are non-linear: you can’t work on them one after the other, because they are constantly influencing each other. Think of them as lens through which you can look at an organization’s design.
#tbd The [[star-model|Star Model]] takes this one step further. Integrate.
Org structure is how the teams are organized, what their mission is, how they collaborate, who reports to whom, etc.
When it comes to org structure, there’s no ideal choice: the best thing you can do is choose the structure that works best for your organization, continuously review and adjust it, and be aware of its shortcomings and limitations.
When designing an organization, most leaders focus on structure because it’s the easiest of the three factors to influence and the one with the fastest feedback loop.
Unfortunately, org structure is also the least effective level for making profound changes to an organization. In fact, a change in org structure should almost always be a means to effect a change in incentives or culture.
An organization with a bad structure but effective incentives and culture will still function somewhat well; an organization with a good structure but ineffective incentives and/or culture is hopeless.
Incentives are what you reward people for and how you reward them. We should always keep in mind that We get what we reward for and optimize our organization’s incentives accordingly.
Incentives can be either formal (e.g., a competency matrix, performance reviews) or informal (e.g., a boss tacitly favoring people who don’t challenge the status quo).
#tbd mention psychological safety and the interplay of culture and incentives
how people behave and what principles guide them.
#tbd mention how culture must be created collectively