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- Arden Hoffman is the Vice President of People at Dropbox where she leads global HR and recruiting. She has a long career in HR with various positions at Google and Goldman Sachs. How do you acclimate from one industry to another?
- How do you get leaders to be comfortable with conflict, particularly younger ones? Anchoring to equity and meritocracy is often something that works quite well. Onboarding is big, and it's about educating people. Take some questions.
- Rips: What would be the implications if Dropbox were to adopt a NASA online sort of approach? What would happen within dropbox. No one would probably end up doing their jobs. We have a lot of open systems within our company, and I think people would love that.
- A lot of the unofficial values of Dropbox seem to embrace conflict. Can dropbox teach people to be better programmers or do you just try to find the best programmers?
- Do you think there's something about software development as a technical process that requires. this approach to freedom? I do, actually, and I think it's quite difficult to one. And you can see that there's a war for talent within the Valley.
- And then your second question in terms of the sorry, silicon Valley versus software. I would definitely say it's a Valley and software engineer. But I go to Chicago. I'm going to call it there.

- Research tries to get at the question of how informal social structure in organizations might shape organizational outcomes. Studies tend to focus on individuals networks, individual person's position within a network, in an organization. Global network perspective can lend a lot of value.
- The quality and efficiency of surgical care differs widely among hospitals. Over 50 million surgical procedures performed annually in the United States. Surgery accounts for about 40% of all physician and hospital spending. Researchers are trying to map how different providers communicate with one another.
- We have about 4000 hospitals just shy of 800,000 patients, about 700,000 physicians, about 15 million physician and patient encounters that we can use to make some kind of inferences. How these networks might be influential for organizational performance.
- Hospital systems where physicians have very cohesive ties that are conducive to information sharing and coordination have lower readmission rates, Ed visits and mortality. Cross specialty integration seems to have an association with lower cost care. How easy or hard is it to coordinate across specialty lines?
- The claims data don't differentiate between informal, formal and so on. I've been thinking about this more as informal structure because it's something that is influenced. What's reflected in those ties seems to also be reflected in informal patterns of communication.
- Team based medicine could be a good way to improve health care outcomes. But there is a downside to interprofessional rivalries and conflicts. And so thinking about how can you change the institution is something that needs a lot of consideration.

- Our next speaker is Ron Nicholson, who is Senior Partner and Managing Director at BCG. He was named Top 25 Global Consultants by consulting magazine team. And so I'd like to welcome ryan McGregor.
- Most of the clients we work with want to reduce cost. And when you see that, it's because they have very inefficient structures. This is what I call the layer level diagram. It shows the layers of the organization, and these are the levels of the pay grades. It's a diagnostic to show the client what they're really operating as.
- Most large corporate organizations have what I call the frozen middle. We needed a process that expanded geometrically, not linearly. Two thirds of the time that I do this diagnostic, I do not do the process. It's a model of enablement as opposed to direct engagement.
- The first one is changing organization. Organizations have a mass and a velocity and the momentum of the organization. The other thing that's really helpful in this process is using a set of principles and guidelines. These are about cultural change.
- In a cascade, one cascade typically takes five to six weeks. Leadership and management is about having a high span of control. If people promote more of the junior people and give them more of a challenge, the organization becomes much more dynamic.
- John, question about the rule no individual contributors above level four. In our system we will allow individual contributors all the way up to direct report to the CEO. The span control depends on the activity. The metrics really matter.

- Asaf Asaf is going to be talking about NASA and then after that we're going to have Art Hoffman from Dropbox. I will focus specifically around that. How the coevolution of things that are in the microfarations of culture. And the design and redesign of the innovation process.
- Over 3000 people from 30 countries participated in trying to solve 14 problems. The nature of the process is very different temporarily and spatially. Four out of the 14 challenging problems were solved in just three months.
- You are the solution seeker. Let's think of ourselves differently. And in the paper I go deep into this transition from problem solvers to solution seekers. I showed the connection between how the professional identity work took place, the knowledge boundaries, and in the end, where the locus of innovation resides.
- It goes deep to the training of the scientists and engineers. Many organizations are now trying to change it and make this so that if they bring something from outside in, the people inside get some kudos. So this is for the future, but basically this is it.
- Gene Crant: Like a lot of companies the last handful of years, we focused a lot on change management. Part of that is dealing with resistance to change. Sometimes the folks that have achieved the most in the current system are the most resistant to finding a new system. Many managers are trying to make it so that it comes much more bottom up.
- Ken Shepard: From an organization design, it occurs to me that you need to do this model, perhaps fewer people, different talents at a higher level of complexity. Some people disinterpret it. You need less people now. You can do less. But some people actually thought, I can do more with the same thing.

- We do sort of set aside this last bit here for what we call reflections on the day. It's really a chance for everyone in the audience to kind of sort of reflect on what's occurred maybe across presentations, across discussions. And to sort of get us started, I've asked Rich Burton to maybe offer his thoughts.
- Network scientists are grappling with in an activity called community detection. It's a computationally very hard problem to find clusters of things which are fully self contained. The complexity in the system is what keeps the problem alive.
- A lot of the conversations today have been about design as getting people to do that which cannot be enforced. Where do you draw the line between that and brainwashing? Where's the ethical line here?
- There are two theme areas that might be interesting to consider in the future. One is comparing and contrasting the methods and dealing with this future. The other is the idea of emergence. No matter how much planning or control we try to build into the system, there is going to be this kind of emergent.
- New forms of organizations require people to redefine their identity. Many of these adaptations to new organizational forms require decentralization. Technology is allowing this real time, face to face problem solving both inside and outside of organizations.
- Thank you again to the organizational design community and Simon Fraser University for hosting us. The drink tickets are available here, so please do stop so we can they have been spread. And we'll see you next year in Anaheim.

- William Ocasio is the John Kellogg Professor of Management and Organizations at the Kellogg School of Management. His research is on organizational politics, cognition, and culture with a specific focus on strategy, corporate governance, and organizational and institutional change. He says culture needs to be emphasized more in organizational design.
- Third point I wanted to make was about emergence, which relates to this notion in organization theory. The idea I would suggest in the mindset bringing together the formal and the informal. When you think about the organizational design, think about it from a more emergent perspective.
- How do we define organizational culture? What are the elements of culture? There is really no consensus about what those elements might be. Attention with respect to mindsets really shapes how people pay attention in organizations. The problem with the notion of shared value is that it has become just a PR statement.
- The final point I want to make has to do with when you talk about deciding culture and the elements of culture. It's important to talk about the processes that you need to make sure that that culture takes hold. And ultimately it's about reinforcing all those elements through communication.
- Will: What's the difference between behavior and interaction? Some people believe that you have to define culture as shared and some people don't. Cultures are distributed among people in the organization and there might be some differentiation instead of fragmentation. These three things are central to making Agile software development work.
- Thanks. There is an implicit assumption that it is good to build a strong culture. But of course we know that strong culture has both positive and negative consequences. Can we identify the conditions under which a strongculture is going to be good for certain purposes and under certain conditions and strong culture might lead to bad consequences?

- I'd like to shift a bit to talk about grouping of work. The starting points are understanding the strategy and then also understanding the work. How do you make choices around what a primary way of organizing is and what secondary or tertiary ways of organizing are?
- In terms of a synthesis with J Galgraith's Matrix work, he puts a lot of focus on Racy. The A for accountability or authority is often not well defined in that model. Could I add to that, please? A client introduced us to a construct that is much more useful.
- Advising is really a way of informing. Monitoring and coordinating is the authority to persuade, but not override. Auditing and prescribing is instructing someone who's not your subordinate. There's no such thing as a group decision. Requisite really helps them get the picture around.
- Use the extant chart that you've been using. Take a look at the grouping of work based on what we've been talking about in terms of the functional and cross functional pieces. In 20 minutes, we'll check back with you.
- We will essentially put the consumer banking and business banking group together. It's a natural progression for the client from a commercial to corporate banking space. And the case of the wealth and the investment banking, put them back together again.
- The bank is schizophrenic. It's organized by multitude right now. Products, geography services, functions, et cetera, completely be cleaned up. The only other thing is supporting cross functional roles versus the key drivers. Let me turn it back to Paul.

- Shift on this last exercise, we want you to just reposition. Just takes up a little bit, but it's also getting you moving a bit late afternoon. We may run about 15 minutes over. But I think we'll have some fun with this exercise.
- There's a lack of clarity, lack of accountability, a lot of infighting going on, resulting in unhappy reports. Sometimes a gap gets hidden because of capability. What generally happens in a gap situation?
- This is one interesting point in terms of Gem Up. The question is to what extent the role assessment would vary depending on the capability of the person determine the test. When you're interviewing someone, you have to make a distinction between am I listening to the facts here?
- There seems to be lots of opportunities for silos lacking integration across support. One of the evening assignments that we'd like you to do is just to start doing a little individual thinking before coming in tomorrow. The majority of the day is going to be some teams to provide at least one redesign of this organization.
- If you have a jam up, keep them higher up because you've got fewer of them. Jam ups definitely complicate the decision making process again. If it's higher at the top, it has less people potentially to be affected by it. But wouldn't it still have an effect all the way down?
- You guys had a really good work session today. The little assignment again is just to start thinking a little bit about tomorrow. We'll have some putting some propositions together. Hopefully Mr. El one.

- What's been your most valuable learning so far? And is there a key question that you still have? That's kind of a real lingering question. We'll do a little polling around.
- It's not about the complexity of the task, it's about the complex of the role. I found it very interesting how quickly people looking at those role specifications without a lot of experience with time spanner levels. When you guys get together to do the designs, because it is like a puzzle.
- Lyn: Is it really clear distinction between the role and the person or maybe less? For the other roles we always interview like the manager about the subordinate role and for the CEO. If you have a need to talk to the CEO, push for the need. Lyn: Don't be shy to act.
- In 90% of the responses to that question, the one that's mentioned the most often is, boy, I would certainly like to have more role clarity. What's required is just a lot more work on helping people get more clarity of role control vertically and laterally.
- CEOs don't seem to pay a lot of attention to structure necessarily. Board should insist that CEOs are accountable for designing effective organizations. Research shows that it produces significant results. But the ability of a board to prescribe the implementation of Ro is shaking.
- All right. We've got to move on. To the section on. Three tier managerial leadership.

- In organizations, what are people looking at to make that distinction between those three who can and those four who can't? Too often it's likability. Human capability in dealing with complexity varies from person to person. Good performance doesn't necessarily indicate potential.
- The required behavior is do you have the self control required in order to control your tendencies to behave in ways that are not required otherwise? In terms of manager, the formula up applies for managers as well. There is something called aptitudes or natural talents. It's not the skill itself, it's the capability.
- We tend not to use the minus T or the required behavior. Skilled knowledge is broken into three categories. We use that word instead of valuing the work. Do you fully apply yourself to all requirements of the position?
- Is anybody going down the route of Robert Keegan stuff and. Making an assessment in terms of subject object interviews? And how do you guys want to talk about how you see that?
- Cognitive computing is very popular right now in the world of information management. It starts at the board level and goes down to the role and whether or not we have the right role motivated and extended. The whole field is just starting to get a little bit exponential right now.
- An 11th century Chinese text written by a Chinese neocompuccin philosopher called Shane Kirk. Describes six levels of complexity in managing a confucian state. In terms of complexity decision making. Of support Sandy's point about the natural. Law of the natural ancient things.

- At least one, and perhaps more, propositions around how that organization might be redesigned. To be able to function against the strategy that's been described, you'll have to make a few assumptions. Are you comfortable with the team you've got right now or would you like it for this exercise to do one more?
- The heads of consumer business units are now reporting directly to the Chief Executive Officer. Instead of having seven management players, you now have five. The organization will be much more agile and will respond to changes much more quickly. There are three options that we can discuss about the chief risk person.
- Andre: What would be my five to ten year task as the head of HR? Andre: Create and implement a strategic system of managing talent talent. And design the agility into the organizational change. Can I write up that role description now?
- Ronald: The cross functional is so critical in this stuff. Recognize the difference between business analytics and big data. If you also don't have governance, you aren't going to be successful. This is fundamental to ensuring the integration across the company.
- We decided to do away with chief operating officer role and combine the businesses. As we stepped through, we saw a lot of inefficiency within the structure. So where possible we've tidied that up. CFO remains as a direct report.
- In terms of a Stratum Six organization, most business units come together at five. Historically, six has been thought of as a little bit unstable. But it is possible to have cross functional accountabilities and authorities at work.

- Two layers behind this question is how we put this data into SAP and Oracle and workday as integrated ERP sets and run reliable reports from it. That's a big challenge organization in. Order to do let's hold that too model.
- The single worst role we found in an organization is an analyst. You've got an inherent conflict between what the time span is and the information processing requirements. If there is this discrepancy, it is already causing problems and if we don't do something about it, it will continue to cause problems.
- Tomorrow we're going to talk about that whole subject of getting people to work. We're not just focusing on the time frame, but also taking in consideration the cognitive thinking and ethical problem solving. What works for me is if we tie those together in our questioning.
- Let's do the one more burning question. Paul, do we have a copy of that slide? No, you don't, because I threw them in at the last minute. Looks like it was kind of raised a few good questions, so maybe it was useful.
- Behind the blue sheet, there are four role descriptions. One is for a technical services role, one is for an operations role, and the fourth is for human resources. What we'd like you to do is determine first of all, I'd like day one, section four.
- Most role descriptions really are not very good. They're more like activity lists. It's very difficult to eke out what the outputs of the role are. One of the things you're going to have to say to your clients is to get greater alignment with how you describe roles.

- Hank is a professor of strategic management and business policy at the Rotterdam School of Management. He has published extensively on strategic renewal, co evolution and new organizational forms. We talked about organization designing organizational culture and designing ecosystem. Designing or redesigning business models.
- Business model replication is more levering business model components and their interdependency. Another organization design strategy regarding business model is what I would call business model renewal. But it's mainly a replication of the existing business model with low speed or high disruption.
- Study finds that replication doesn't pay off in very dynamic environments. But we found some peculiar findings regarding the effect of business model renewal on performance. The idea could be that in highly dynamic environments, firms keep on trying to come up with fundamentally new business models.
- The fascinating part as you suggested is it doesn't go down on that chart. Is there a possible sample bias in the sense that you look maybe at successful firms and by successful I mean the ones that are still alive? All theories are bound.
- New business models require often a significant change in organization culture, especially a change from being a product company to a services company. I think design field could really have an added value in the field on business model innovation.
- Some sectors of our community are using the phrase organizational architecture, which is broader than what we usually think of as design. I think this is really very interesting stuff. You made my day. Ha.

- The Global Design Society is a society of academics, business users, practitioners of a work levels based approach to design. Every presentation at their world conferences every two years are videotaped and put on our web for free. We've also said we will give away our materials.
- John Ballard has taught organizational design in theory for over 20 years. His first class after the syllabus and introduction is an exercise called Organize to Survive. Most important thing. in terms of what we do. would be apply and bring it back to the real world.
- When you teach organizational design you have to design your course to fit the audience. Experimentation, prototyping, theory based target the design of the course to the audiences. Let's open it up for questions, we. Have a few reading minutes.
- It all starts with systems theory. What you have to do is have a coherent design strategy that goes from concept or design team all the way through implementation. If you get the incentives wrong, the instrumentation is not working.
- I wonder if ultimately it's really going to be about the design of informal social networks too. In the innovation space, what we're seeing is formal structure. I think ultimately the questions of the construction of social networks is going to turn out to be much more important.

- Designers, both from a consulting basis but really often also employees in organizations. How do we ensure the quality of the design and the design process? Should we talk about a certification of individuals?
- Digital area change the items that we design. We can also talk about it in the way we teach design. Are we at the point where the organization design has matured enough to be a profession? How should we certify to be in the profession?
- Mark Lascola is the managing principal of a global consultancy called on the Mark. About 20% of his firm's business is teaching organization design. He says the challenge is to make design real in organizations.
- There are many schools of thought around organization design. From requisite organization to social technical systems. What I would emphasize is in teaching design in a digital world, is it's not enough to get it in the classroom. You have to apply.
- Nuno Jill is a professor of new infrastructure development at Manchester Business School. In what she teaches she introduces a lot of organizational design theory. She says this makes students aware of the way in which these things need to be designed.
- Project Management certificate is an interesting intersection between what we're talking about here and focusing on certification. The same issue for us in organization design, as I said earlier, 60% to 70%. Work simultaneously with the design work, and if you're not, you're going to get hit by one or the other.

- Our next session, excuse me, is designing Governance Ecosystems and interorganizational relationships for creating value and innovations. All about thinking about design in terms of improving performance. Our first speaker will be Carlos Baldwin, a William L. White professor of Business Administration at the Harvard Business School.
- Most productive work is done within transaction free zones. You need governance within each zone and across the zones. Here is a list of some possible modes of governance. From corporate governance to platform and contest governance.
- All parts need to interoperate on the basis of shared code. High rates of potential improvement in components, but the improvement requires trial and error, experimentation and learning. A modular design for external experiments is a platform business ecosystem.
- Carlos: Have you thought about parallel processing? First you have to find it. Once you find it, then parallelization is one of the ways of expanding capacity. But it's all a question. Both the modular recombinant systems and the sequential production systems are very complex.
- The attractor is fantastic amounts of cash flow to these more efficient organizations. If you can get more modules and more experiments per module, there is an incredible value proposition there that will drive out less modular, less experimentally friendly alternatives.
- In the new game it's not all or nothing, it's module by module. Are big integrated firms good at separating problems? No. It doesn't come naturally. But it's a place where you can imagine a large firm with some of the properties of large firms becoming quite good.

- Our next presenter is Tyler Ryan, an assistant professor at the Wharton School of Business. He studies how startup firms in particular navigate between competing goals. How social enterprises get designed is the subject of his talk.
- How do different types of goals become relevant to the entrepreneurial process? Think of identities and the identities that an entrepreneur has when we're thinking about what they do and the ventures they're creating.
- Theory: Identity is meaningful and it also motivates behavior. We want to act in ways that are consistent with our salient identities. How does this link to entrepreneurship? Entrepreneurship doesn't have strong expectations about what you should do.
- Mixed entrepreneurs have one set of aims associated with deep knowledge, competencies, social relationships, and then the other. A balanced entrepreneur has sequential work roles or concurrent role identities associated with these different types of aims. The perception of tension you have between your identities and needs is a function of how accountable you feel to both.
- For the mixed entrepreneurs, they're going to feel some tension between the social and financial aims that they want to pursue. The knowledge and capabilities are going to be stronger for the set of aims associated with their work role identity. As the tension grows higher, people pursue different approaches to integration.
- Do you have any idea according to the flood on table it will make a difference in terms of the longevity or performance or goal of the pushup enterprises? If you're a balanced entrepreneur, you're in a better position to sustain this deep integration and the hybridity of the organization over time.

- The session was originally meant to be Chuck Snow's teaching. It includes a session on design thinking and processes. But for me it's kind of packed on change management. It's important to recognize what the world includes when they teach organizational design.
- Greg Joffey: I think design thinking is a fabulous approach for some problems in business, but I don't think it's a great solution for all of the design components. He breaks down which parts I think it works for and which parts it doesn't.
- Steve, I wonder about how much scale matters. And it comes more from the industrial design world. analytic design, given its opportunity, given the chance, kills designerly design with the death of 1000 cuts. I think it's very difficult to manage those things.
- Design thinking is what is done by architects and it's more the analytic organizational design that's done by the engineering. But it's often sequential, but it doesn't have to be out there in design world. And I think it's useful to have it be loopy.
- In some ways in design thinking per se, with the emphasis on empathy and user driven design criteria, we do a lot of the problem space analysis through users. But in any business organization there are many different kinds of criteria. Design thinking would try and get us to find higher order solutions.
- From a manager's perspective, design thinking is really useful as strategic thinking tools. Where I find it's less useful is the actual analytics side of then having to say right at the end of the day. It could be used really well in strategy.

- Gene is going to talk. for 1015 minutes like that. Then Ken will respond a bit and then hopefully we'll have a little bit of time for some questions and interaction with the floor. And I'll just kind of be over. Here and keep trying move this upstairs successfully.
- Design thinking focuses on systems level design and the integration of the pieces into the whole. It is very much possibility driven. In business we often tend to be constraint driven in our approach to designing. Design at its best allows emergence as we are discovering.
- The successful strategy is not the right strategy in an objective sense. It is the strategy that is most compelling to the people who must change their behavior to implement it. Once we recognize that, we shift from explaining the logic of the strategy to connecting with them in a persuasive process.
- Darden: There are lots of different definitions of design thinking. Darden: We try to build a methodology and a process behind it. The challenge is to take this act of designing and make it more familiar to managers.
- The other very valuable notion I face is this emphasis on the concrete and the visual. Design cycles continuously between the abstract and the concrete. A methodology like this would be truly helpful given the challenges, particular challenges that organizational design presents.
- Next year we are for the first time integrating design thinking into the core first year as the backbone structure to a major project class. Some of it clearly sits, I think, in leadership in some ways. How distinctive does design thinking meet the tests of discriminant validity?

- Several that seemed knit together an interesting fabric around these cross boundary behaviors. We build on that in an applied setting within Walmart. The muscle to do that cross boundary work doesn't come naturally. You have to put there and build that muscle.
- We don't advertise this. It's done by referral. Our group gets paid for by our internal customers. A leader has to be willing to commit himself or herself to the scrutiny of walking through the process. If you want to make design process improvement, people practices get better.
- Even really successful leadership teams struggle with decision making. There's an addiction to consensus. Those groups that perform extremely well, that are highly aligned, perform much better together. These are the things that although on the surface seem very apparent and very easy, it's difficult to do.
- The process is simple. We use something that Howard Gutman from Gutman Development Strategies has put forth, modified it. After structured interviews, we gather the data. We present the data back to that leader and his or her HR person. And you see culture change.
- Sometimes what you might be seeing on screen here is more on a project basis or an ad hoc basis, not on a full time basis. How do you draw the boundaries? That is a fair question. The real way that work does get done more effectively is that we can create the freedom for the crossing of those boundaries.
- Structure defines the silos, and that gets into decision making. It slows things down, kind of gums up the decision making works. So consensus becomes a bottleneck in a way. What's your role as kind of. Coaches that work alongside the HR department to mitigate that?

- John Joseph: Welcome to the 22 organizational design conference. Each session has three speakers. The video is available for educational and non promotional purposes. Most importantly, our speakers have come from great distances.

- I just wanted to give you a flavor of how that collaboration worked. If you try and do serious consultancy work, you're always working through long term partnerships. Ken wants me to pick up some of these stories.
- The Germans began to get the hang of industrial democracy in the middle of the 19th century. They cottoned onto the idea that once your firms begin to get as big as talent, then you need formal structures of representation. But the English have not yet caught up.
- Professor Harry Franklin was professor of Philosophy at Princeton. What is the difference between hot air out and out, lying andbullying? And it's important because if you're telling a lie, you are deliberately deceiving.

- Organizational design has experienced a lot of interest in recent years. Up to 20% to 25% of the variance in an organization's performance can be attributed to the organization design. The PDW will examine key aspects of organization design and how should be taught.
- The session is design thinking. Concepts and processes. The chairman of that is Steve, and the first presenter is Steve Ram. We hope we have a good session, a lot of great discussions.

- Englishman brought up in the United States. Did multidisciplinary degree at the London School of Economics. Found his natural home in the international mining industry. Has worked most of his life in mining and energy and large projects.

- Rooney: I can look back and use theory to see how my work changed from position to position. When I started out in teaching, I was about 21 years of age. From there I moved into business and industry and training and development. At age 40 I made a career change.