The Five Smooth Stones of Organization Systems Design

Five principles distill the most important concepts to keep in mind when changing your organization to reach for illusive or ambitious performance targets. They are simple, much like the five smooth stones that were the shepherd boy David’s weapon of choice against the daunting warrior Goliath. Flinging off heavy armor offered him by his own clan, David “prevailed over the Philistine with a sling and a stone.” Applied with skill, these principles likewise have the power to overcome the obstacles of Goliath-like stature that your organization faces.

Smooth Stone #1: Strategic differentiation

Winning in the marketplace is all about establishing the team’s uniqueness, in finding the inimitable things it can do not better than rivals, but differently.

Smooth Stone #2: Organizations are made of processes, and not all processes are created equal

Fundamental to the workings of a company or team are the activities carried out every day to create value. God is in the details, as the saying goes, although here we’d want to say that god is in the activities. Decisions about which activities an organization chooses to do should be strategy-driven, and those that are more relevant to competitive advantage should be cherished over those that provide little marketplace upside. When organizations become set in their ways and take the daily work they do as a given, the work most critical to marketplace positioning can be swamped by the vastness of everyday concerns. It’s a good idea to look under the hood occasionally. To do some reevaluation and revitalization. What are the crucial activities that we do here that are really worthwhile? Which of them give us the greatest advantage in the marketplace? On what work should we focus our finances and our time? What work is most helpful to us when it is performed as efficiently as possible, or outsourced?

Smooth Stone #3: You get what you design for.

Organizations are perfectly designed to get the results that they get. This old saying means that if an organization’s results are disappointing, the explanation lies in an understanding of its infrastructure: its strategies and systems and the derivative culture. And the good news is, that’s where the remedy lies as well, because the way an organization works can be changed. People can overhaul the rules that they have put in place about how to do things. They can change procedures, remodel, rework, restore, revamp, reconnect. By making thoughtful choices about organizational design—by adjusting design elements like the goals and principles that provide guidance, work activities and facilities, decision-making processes, approaches to recruiting and training and rewarding and learning—a team can remake itself systematically.

Smooth Stone #4: Knowledge is the purest form of competitive advantage.

What we mean here by knowledge is really an organization’s dexterity with knowledge. And when we say that it is the purest asset of a firm, we mean that a handiness with knowledge itself can see an organization through all kinds of changes in technology, management, markets, and the environment. The ability to discover, create, codify, diffuse, apply, and renew knowledge protects it from being missed, dismissed, lost, hoarded, or squandered. There is tremendous power in the minds of the people in an organization, but the organization itself must develop the systems and agreements and networks that spark this knowledge, that draw it out and capture it, that apply it to create . . . wins. customized and "off-the-shelf" instruments that are proven and reliable.

Smooth Stone #5: Leadership that Captures Hearts and Minds

A leader may be able to picture the future of the organization, but the task ahead of him or her is still to communicate this vision and engage employees. They need to be ignited by a cause and involved and unified. The first smooth stone for your shepherd’s bag is insights about how to achieve sustainable competitive advantage. .