Great leaders work "on the machine" (not just "in the machine"). They leave the legacy of a high-performing organization that prospers long after they've moved on.

This checklist is a quick way to know whether your machine needs work – that is, whether an investment in organizational transformation is warranted – or whether you're nearly "there" and continuous improvement is all that's needed.

It describes ten hallmarks (indicators) of excellence in organizational design.

Instructions: For each of the ten hallmarks, read the definition carefully; then, check the box if the hallmark is both important and needs work.

1 Scalability

Your organization can grow in size and/or diversification, indefinitely, without any material changes in its organizational operating model.

2. Agility

To prosper in this VUCA world, your organization can rapidly reconfigure its capabilities to address new challenges and opportunities, without any material changes in its organizational operating model.

3. Stability

The organizational design adapts to changes, including people changing job, without any material changes in its organizational operating model.

4. Innovation

Innovation is not constrained to a small group ("skunk-works"), which creates a bottleneck for innovation and deprives everyone else of growth opportunities and wastes so much talent. Instead, innovation is everywhere, at two levels: 1) innovation in the way each group operates (its products/services, skills, tools, methods, and processes); and 2) the development of innovations that contribute to enterprise strategies.

5. Acquisition integration

Once the deal is done, acquisition integration occurs quickly (months, not years), and achieves all the promised two-way synergies – the acquired business (e.g., product line) benefitting from the depth of capabilities (all support services) in the mothership, and the entire enterprise benefitting from the acquired capabilities (its support services). Examples of support services include sales, marketing, engineering, manufacturing, logistics, customer service, and all the usual administrative services.

And now, consider what it takes to be an "employer of choice" – to attract, inspire, and retain top talent without necessarily paying top compensation....

6. Accountabilities

People are accountable for results (not functions/tasks/processes). Accountabilities are always clear. Across the organization, there are no overlapping accountabilities (internal competition and territorial battles) and there are no gaps (missing capabilities).

7. Teamwork

Cross-boundary teams form dynamically (not fixed processes, except where appropriate). Teams form laterally (not requiring people to work up and back down the hierarchy). For every project/service, one group is accountable for the entire deliverable. And team members are clear about their individual accountabilities for sub-deliverables. Priorities are aligned such that all team members have time to contribute expected results.

8. Performance

High levels of individual performance require specialization. Specialists always outperform generalists in their field of study. If fact, specialization is the very reason organizations exist; an organization of generalists performs no better than an equal number of individuals. On the other hand, as long as it's good at teamwork, the more an organization permits specialization, the great its potential performance. Siloed business units reduce specialization; consolidation of shared services optimizes specialization.

9. Empowerment

Empowerment means that authorities and accountabilities match. If the organizational design separates authorities from accountabilities, then (using black-and-white language to make the point) the group with authorities becomes an unconstrained tyrant (no checks and balances); while the group with accountabilities cannot get their job done and becomes a scapegoat when the ideas of the first group fail. A healthy organizational design systematically matches authorities and accountabilities. This is so critical that I call it "the Golden Rule" of organizational design.

10. Engagement

Employee engagement is founded on a supportive and inspiring work environment. Expectations are feasible, not unreasonable. The culture is supportive. Metrics are controllable and fair. Everybody has growth opportunities. And critically important, everybody feels a sense of purpose. Purpose means using one's unique talents to do something hard (that they'll be proud of) and that has value to others.

If you checked any one of these hallmarks, an investment in organizational change may be warranted. But if you checked more than one, here's some good news: There is an organizational design that delivers all these hallmarks.

What is that design?

Imagine an organization where every box on the organization chart is defined as a business within a business. Jobs are defined by what they "sell" (whether or not money changes hands), not roles in processes, responsibilities for tasks, or competencies.

Each group knows what business it's in. It knows its products/services. It knows whom its customers are (be they external or other groups within the organization, or both).

Lines of business are laid out on the organization chart based on principles, to avoid conflicts of interests and impossible jobs, and to maximize professional synergies.

Now, go on to imagine that one group is fully accountable for the profit/loss of products/services sold to external customers. Let's call them "product managers."

Everything else is a shared service.

Product managers have no staff. Since every group is entrepreneurial and customer focused, they're eager to deliver their products/services to the product managers (as well as everybody else). Product managers "buy" sales, marketing, engineering, manufacturing, logistics, customer service, and all the usual administrative services.

Consider how this organizational design satisfies all the hallmarks of organizational excellence:

• 1. Scalability: In the initial design, all possible lines of business are assigned somewhere. As the organization grows, groups can divide (splitting their line of business into sub-domains), increasing their degree of specialization. And as new product lines are added, additional product managers are installed. But in either case, the operating model doesn't need to change.

• 2. Agility: No matter what the strategic initiative or operational imperative may be, all the necessary internal lines of business are available to help. And, of course, a line of business can be "selling" to multiple other groups (contributing to multiple initiatives) at any point in time.

• 3. Stability: The organizational design is built on principles, not personalities. There is no need for restructuring when people change jobs, because jobs are designed around lines of business, not any individual's unique talents and preferences.

• 4. Innovation: Every group is entrepreneurial. It continually innovates to maintain its competitive position (price, quality, up-to-date products/services). And every group is available to contribute to enterprise innovation initiatives.

• 5. Acquisition integration: An acquired product line is represented as a new product manager. All the rest of the acquired company folds into the various shared services. The new product manager has access to all the rich depth of the entire organization. And every business-within-a-business benefits when it inherits the talent coming from the acquired company.

• 6. Accountabilities: Groups are accountable for delivering their products/services (results). Discussions with their internal customers lead to clear definitions of those products/services. And lines of business are laid out across the organization chart such that there are no overlaps and no gaps.

• 7. Teamwork: Whenever any group accepts accountability for a deliverable, its first job is to arrange any needed "subcontracts" from other groups (just like the general contractor who builds a house subcontracts to an electrician, plumber, etc.). Of course, subcontract can, in turn, reach out to other groups for help. This way, teams form dynamically (tailored to the unique needs of each product/service). They form laterally (without waiting for a common boss many levels up the hierarchy). It's clear which group is accountable for the whole initiative (the "prime contractor"), and the accountabilities of each team member (each subcontractor) for their products/services are clear.

• 8. Performance: Consolidating everything into shared services optimizes specialization. This is possible because of the dynamic cross-boundary teaming process.

• 9. Empowerment: Customers decide what they'll "buy" from suppliers. But suppliers are empowered to deliver those products/services in the best way they know how (no micro-management of tasks). And everybody is empowered to run their business-within-a-business as an entrepreneur, and is accountable for the success of their business.

• 10. Engagement: This kind of organization is a great place to work. Expectations match resources (including your own time) because customers can only afford to buy as much as budgets permit. The culture is team-oriented, creative, and empowered. Everybody has the opportunity to grow as they improve their businesses and find ways to add more value to the enterprise. And everybody has a sense of purpose, since they produce valued results for their customers (external or internal) and see how their work contributes (up through the prime) to enterprise results.

Resources for transformational leaders:

Vision: the business-within-a-business paradigm....

Implementation: the five organizational systems that define the ecosystem in which we work....

Structure....

Teamwork....

Resource-governance processes....

Culture....

Metrics....

Strategy: How to formulate an organizational transformation plan....

Private consultation with Dean Meyer....

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Books Speech abstracts

NDMA coaching/consulting services

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