Presentation held at the Organization Design Forum conference in the US, 2006. For more on this and related topics, see my blog http://www.organizationdesign.net

1. Managing Interdependenciesin ComplexOrganizations Nicolay Worren Presented at the Organization Design Forum Conference 2006

3. Identifying interdependencies

4. Configuring interdependencies

5. Creating alignment across dimensions of interdependencies

7. The concept of interdependency according to Thompson (1967) Design Engineering Production Department A Department B Department C Sequential interdependence Computer system Nurse Anesthesist Surgeon Pooled interdependence Reciprocal interdependence Limitations Difficult to operationalize Aggregates qualitatively different interdependencies into one construct

8. The concept of interdependency in business process re-engineering, Six Sigma, and Lean Activity 1 Activity 3 Department A Activity 2 Department B Limitations Only considers one dimension: Activities Simplistic ”design rules” to resolve coordination problems

9. We differentiate between five different interdependency dimensions

11. However, dependencies may be added, removed, or changed (strengthened /weakened). What is an appropriate interdependency depends on the function that a unit is supposed to perform. A B A B Add A B A B Remove Change degree A B A B

13. Identifying interdependencies

14. Configuring interdependencies

15. Creating alignment across dimensions of interdependencies

19. Identifying interdependencies

20. Configuring interdependencies

21. Creating alignment across dimensions of interdependencies

23. We have identified 17 generic design rules based on best practice and academic research. Based on: Romme, A. G. L (2003). Making a difference: Organization as design. Organization Science, 14, 5, 558-573.

24. Example case: The Engineering department of ProTech Dependency dimension: Products sold at fixed price yet customized to customer requirements. Activities Governance Social network Resources Management team Commitments Sales Cost estimates and sales order Customer Contract and specifications Finished product Engineering

25. How design rules can be applied to address issues

26. Example case: The Engineering department of ProTech Dependency dimension: Products sold at fixed price yet customized to customer requirements. Activities Governance Social network Resources Management team Commitments  Sales and marketingstrategy  Commitment re. delivery date Sales Cost estimates and sales order Customer Contract and specifications   Confirmationof capacity Finished product Engineering

28. Identifying interdependencies

29. Configuring interdependencies

30. Creating alignment across dimensions of interdependencies

32. In modern organizations, there is rising complexity, and, we would argue, an increased risk of misalignment Before: Now: The more dynamic and distributed manner of working has lead to increasing flexibility and speed. But it has also led to a sharp rise in the number of interfaces that any one person must handle, and the risk of serious misalignment / lack of coherency. For example, organizations may be centralized on one dimension and decentralized on another.

34. Identifying interdependencies

35. Configuring interdependencies

36. Creating alignment across dimensions of interdependencies

38. Interested in organization design? Follow my blog www.nicolayworren.com Subscribe by pressing this button!