Summary
In this episode of the Org Design Podcast, Vinisha Rathod, founder of P3 Studios (People, Partnerships, Purpose), shares her expertise on organizational scaling and leadership development. She introduces her framework of "Five Hindrances to Scaling" which includes focus, family, financials, feedback receptiveness, and funnel efficiency. Vinisha emphasizes the importance of distinguishing between people and positions, particularly as organizations grow and evolve.
A key highlight is her discussion on creating healthy organizational cultures, drawing parallels between high-performing sports teams and effective workplace dynamics. She addresses crucial topics such as leadership transition, the challenges of title inflation, and the importance of having difficult conversations about organizational structure. Vinisha shares valuable insights from her experience working with companies across Australia and the Middle East.
The conversation also explores innovative approaches to organizational design, referencing examples from "Reinventing Organizations" and discussing practical methods for improving workplace communication and decision-making. Vinisha offers fascinating perspectives on humanizing the workplace, including the impact of bringing children and pets into office spaces, and how COVID-19 has transformed our view of leadership.
Watch the episode on YouTube - https://www.youtube.com/watch?v=ShRU7jAy9Gw
Show Notes
p3 Studio - https://p3studio.com.au/
Reinventing Organizations - https://www.reinventingorganizations.com/
Transcript
[00:00:00] Tim Brewer: Yep. Well, look, everyone's got a renovation going on in their life somewhere. But today, it's clear you've got one going on in your kitchen. You know, kitchen renovations are a lot like org design.
[00:00:09] Vinisha Rathod: Yes. And a lot of decisions to make, a lot of decisions to make.
[00:00:13] Tim Brewer: Yep. Musical chairs?
[00:00:15] Vinisha Rathod: Yep. Sometimes you just want to gutter it all and just start all over. I feel like people need to learn that with positions. I had one company I worked with and was like, "Why are they in the exec? Their span of control is four people and I don't understand. And they're like, "We just want to give them a opportunity to be in the exec." It's like musical chairs. So, if you want John's chair, that is out there standing on the table.
[00:00:35] Amy Springer: Why is that chair there?
[00:00:36] Tim Brewer: There's always been
There's always been a chair on the table.
[00:00:39] Amy Springer: It's how we've always done it.
[00:00:41] Vinisha Rathod: It's like you come in and you're like, "Why is that on the table?" Like, no one's noticed that, we all kind of just accept it.
[00:00:47] Tim Brewer: That's John's chair. We don't question John's chair.
Well look, hopefully today we give the listeners something that they can listen to and upskill in org design.
When thinking about org design, what is it that you think that everyday leaders that you talk to, need to know about org design?
If they could just forget all the detail and all the consulting jargon and stuff like that, what is it every leader can do to improve how they think about their organization structure?
[00:01:13] Vinisha Rathod: Yeah, so, I always start with, what are you trying to deliver? So, what's your business model? What's your why? So, your up op modell or your business thing. And are you set up in terms of your organization to deliver that with the least friction? I call this strategic people management, which is why it doesn't sit under pure HR. But need the leadership involved in it because it's how you perform day to day. So am I able to set up and deliver on what I need to do? And is my organization— are they clear on what they need to do? Is there least friction? Is escalations easy? Are people growing the way they're meant to be growing? So, that's kind of how I see it. I see org design as strategic people management.
[00:02:01] Tim Brewer: I got a question there. We hear a lot from people in industry about their operating model and we hear that a lot talked about. You talked a little bit about the connection between strategy and how people are structured in the organization. What are the components of an operating model that you think about?
So we're sitting together today and Amy was like, "Hey I've got these thousand people that now report to me. I've just taken this new role. How does she think through what needs to be in an operating model? Is it a business plan? Is it just a strategy document? How does it differ from all those other tools that we see used by executive teams and leaders in business?
[00:02:37] Vinisha Rathod: So I, kind of, ask myself, what is the focus of the bigger picture of the business? And then, what is our strategic objectives of the group that I look after? How are we all set up for success to deliver against those goals? What functions are important or who do we interconnect with the most to be successful? And what services, things that do we manage that centralize versus things that are decentralized. We need to connect in with head office, depends on the size of the org, depends if it's international, depends if it's local. What do we need to get everyone's remit and support with, versus what do we manage and deliver on. So, that's literally just how are you operating as a business.
And then I like to go into details of like, what's your people structure? What's your reporting? So the elements of the business model, and just want to get clarity because the worst is what people spend time on is like, who does what, especially when you're big. You just can't really afford that because you're spending all this money on wages.
This is the difference between a small organization, which can be so much more nimble. You can communicate things easier. You can escalate things easier. But when you're going through that a thousand plus, you just can't afford to. I started one meeting, one time, when I was in a company, and I said, this meeting, if we look at hourly rate of everyone, is costing us like 50,000 dollars. If I just looked at pure hourly rate and they were like, "Wow."
And I said, "Yeah". When you quantify everyone's time and how much we waste, because no one's really clear on what we're trying to deliver, it's like, you can spend the time doing it more in an effective way. So I think that those are the things that I look at.
[00:04:15] Amy Springer: You've mentioned business model, mentioned operating model. I feel like a few things I heard you mention in an operating model. Just wanted to double check we got them all. I heard you mention things like location, centralization, decentralization.
[00:04:29] Vinisha Rathod: Yeah.
[00:04:29] Amy Springer: What are some other things that are thought about in the op model?
[00:04:33] Vinisha Rathod: So for op model, I look at your people, culture, processes, like that. I also look at how you do your reporting and governance. also look at how you do your financials and things like that. I also look at if there's any matrixes, which is a complex concept, but it's like, who is connected to who. So, who reports to you, who is your line management, but who's the person that looks out for your success? Or who else do you need to report on what you do that impacts them, as well? So, I always like to know those kind of bits in a operating model, as well. So, I love role chartering for that. So, how does this role fit in to the wider business? How can the wider business support it to succeed? And what does this role need, to succeed against all of it?
So, it's kind of like the cog in the machine, kind of thing.
[00:05:21] Amy Springer: And how do you think an org structure played into an operating model?
[00:05:24] Vinisha Rathod: Your operating model is, what are you trying to do? So, it's kind of seen as like your internal DNA. That's how I visually think about it. And then your org structure is your arms and legs. So it's like, what are you as a person? What are you trying to deliver? And then, how are you delivering it? So I always see org design as the "how". So, what functions you have to deliver on what you're trying to create, to who is reporting to who, how is P and L organized? Because that all falls under it, as well. These are the things that I see, like, what are your arms and legs?
Are they efficient? Do you have 55 arms, you know, like 12 chairs that are on top of—
[00:06:03] Amy Springer: When you only need four.
[00:06:05] Vinisha Rathod: Yeah. You probably just need four. Like you don't need 55, but there's just legacy ways of working, right?
[00:06:11] Tim Brewer: We all want our own arms, right? We all want our own arms.
[00:06:15] Vinisha Rathod: We all want to be in the leadership. We all want to connect in with the founder. You don't want to lose that because that's what we started in the beginning. But the founder is not being able to spend any time to work on the business. They're too caught up with everyone day to day, wanting a piece of them. So even looking at things like that. Like, sometimes your span of control, which is who reports to you, can get so large that it is not constructive to the things that you need to deliver on. And so, I think those regular checks are quite important because we just get into BAU mode so much, that there's so much we don't see.
I use it even in my personal life when my friend came over. She looked at my place and she's like, "Why is it organized like that?" I was like, "I don't know." She's just moved one thing and I was like, " Oh, it's so much better." That's like the thing in having an objective eye. And working with people who really know org design well. Kind of, like, connecting the dots and choosing the puzzle pieces going like, if you customer operates like this, just say your customer journey. You're like, okay, traditionally you connected with finance and did this and did this, but actually two years ago, you've got a brand new system, which completely shifted how you work and actually you don't really need to interact with these many six touch points.
You probably just need two, but you haven't updated the way that you interact with your customer. So, that will shift how you do your org set up. Does that kind of make sense?
[00:07:35] Tim Brewer: Yeah. I think that customer journey is a really interesting interaction or rationalization against the op model. I'm really glad you mentioned that. Question I've got with you on that— and I hear this from a lot of people when I'm speaking to them about how they're looking at their organization design, particularly people that are not super experienced in org design background, where they're looking and there's just so much detail. When they had a team of 25 and the roles and responsibilities and they're looking at that munitia detail of every single role or every single position, every seat that someone sits in, every hat that they're wearing. And then they zoom out and become responsible for three or four hundred people or three or four thousand people. The hats the one person's wearing, the responsibilities that that one person carries— and it's really hard to bring the optics back up to a top level. Do you think that the operating model provides not only a great top-down way to look at your organization, but also guide rails as different managers and team members are building across the organization, that they can rationalize back to the types of things you talked about. Like how they're financially reporting and the way their customer journey works through the business.
[00:08:39] Vinisha Rathod: Yeah. I'm a really, really big fan of always going back to the "why", because then, I find that people can be more nimble and understanding when you shift things, when you know your "why". So, my approach to org design, and I've got elements from Boston Consulting Group, because that's kind of how I fell into it. I was a specialist in org design there. But I really loved a bit of their framework, but I added on more stuff, as well.
So, the "why" of how you even approach org design, like I would do this if I was in a brand new function or given assigned this group. And I would say, "Okay, what is the 'why' strategic objectives, vision of the company? What is our competitive advantage?" So, I'd really screen back of the "why". Because then you can kind of look at things more objectively.
So then I go, what's our competitive advantage? What are our key issues and pain points? What's the market trending towards? I always think that's really important because then you get out of your own head, as we're seeing AI automation is becoming a really big thing, even to the point where people, like my mom, are saying to me to use AI automation and chat GPT to help me prepare for things.
And I said, "Mom, I still need to use my expertise." It's becoming more mainstream, like the Queensland government's getting their own version, which is pretty cool. And so, I look at market trends. And that's impacting how jobs are done, right? So, I would always go back to the "why", and I look at those four things and then I go, how do I develop org design effectively?
So, structure is one part. It's like, who reports to who, so the hierarchy. But then, I look at roles and responsibility, who does what? Who's accountable for what? And then I also look at the talent. So, who fills the roles and who's responsible for what, because, sometimes, I think it's very human to— I've got given this group and then I associate Bob as operations. Instead of actually looking at, we have this role of operations. Now what is the talent that you bring? What's your capability? What do you bring? What do you care about? What can we cross learn? What can we do with you? So, actually seeing the position and then seeing the person and then going, is that aligned? Because we haven't had changes and reviewed things for a while. And if they're suited somewhere else, is where you have your talent succession planning. I worked with this company and they said they had two customer people that they made into engineers. And
I just wish that when you're looking at your company, org design, and your talent, and your people, that sometimes that we're able to delineate between the people and the positions.
And I think that's really, really important, especially if you get given a team. Because there's a lot of assumptions we make. So, the roles? What are their responsibilities of the talent? What are their capabilities? What are their drivers? What do they want to do? And then, I look at also when I'm doing org redesign, is the tools and the enablers.
So, what's your processes? What's the tools that support you to deliver an operation? So, your performance management, your tech stack, your what are your everyday things that you use to connect with other people in the team? And that's how I kind of see org design holistically. And then, how I would change things is the structural design, the boxes. Is the leadership aligned on what this function is meant to do? And do we have the proper change management and support to transition people as we need? I think the biggest thing that people always want is clarity. I think that's the thing that really screws up people the most is like, "I just don't know." And when you tell people we're still trying to figure it out, it's probably around this thing, people are pretty understanding when you give a timeline and go, "Look, we're just shifting." I think merger and acquisition is probably one of the best examples. Uh, "We're just trying to figure it out, but we've got you in ABCD." People are pretty good. It's when it's like, "I don't want to address it." It's just too hard. It's a bit awkward. We don't know. And we'll look a bit stupid. This is where people are starting to make up roles. This is where people get the bad apples because they get scared of their security, lose their jobs. They might. Like, we don't know. Or are they shifting us into a team as they're offshoring. And that's what causes a lot of stress and anxiety.
When you're pretty good about, "We're doing this shift. We're looking at this. We're going to try and see you as a person versus the positions we have." That's where people are pretty understanding.
[00:12:50] Tim Brewer: That's really cool. You touched on when things go wrong. We obviously want to respect the privacy of people and companies that you work with, but tell us about the kinds of things that you've seen going into companies, that just are screaming at you, "We've got an org design problem here". Either by the fact that things have changed internally and externally over time, and the structure has not changed. Or, there was just not the effort, time and care put into the org structure and it, kind of, happened. I don't know if this is going to translate internationally, but the "arse about". This is such [an] Australian saying, I'm sorry everyone internationally. It essentially happened by accident. Like, "Oh yeah, that's the structure we had by accident." Rather than being intentional.
[00:13:29] Vinisha Rathod: Mergers and acquisitions, obviously, is a really really good time to look at a structure. But, it kind of gets listed as this kind of HR— with nothing against HR— this side thing that we're just going to keep going and not looking at it. It particularly gets highlighted when there is a big merger and people are looking at, who do we currently have in our remit and why haven't we changed that? Why do we have contractors for that? Why hasn't anyone updated this? And one of my favorite ways of looking at org designs in the BCG days, I worked with a particular company and we used the tool OrgBuilder where you could identify from data, the layers and how many people. It took me a while to understand it to read the data. But, it's like, how many layers are in an org? And then, how many people sit across those layers? So, your ideal is meant to be a pyramid. Most down the bottom, they're the do-ers. And then, these are the people that are role modeling and leading. But the do-ers — what I found in a few that we did, is that you end up with diamonds. So, you end up with people here, then they get this big middle bit. Then, you have all these people that are reporting up. And so, you can see the bottlenecks that come through. And you go, this is not a really effective way to work as a company. Because, the most junior person is trying to get through up through the top, but we have to do management this way. You know, we get tenured and we get based on promotion this way. And we can't take that away from them. And you go, "Well, this is not the most efficient way of working." I had someone that said to me, "Well, we want to be a culture where people talk to each other and where we are agile and stuff like that. And I said, "Well, I can't do that unless the most junior person is able to have a voice and do they have a voice? And this person was like, "Mm." And I was like, "I can't change anything. I can help you cut costs and I can see this is probably not the most effective way of working. Like, what are these people doing? What is this kind of group? But if you want real cultural change and you want to shift out the operators of business, you need less layers. But that's only if people are willing to not have certain titles, which, you know, is hard, especially in more traditional companies where that is their identity and that is how the country operates.
So, I have seen things like that. I think it's just such a good exercise to really go, what does my company look like in terms of layer one, how many people sit there? So, CEO, normally. What's in my ELT? What sits behind that? And actually see the shape. Because when you take an objective view and see the shape and see how many people are individual contributors and how many people are managers across different things— we would also do it with pay. And it was actually really interesting things that we would find, the nuances that we would find across. I don't know if that helped, but it was a very interesting thing. Was you start with just the layer and just from a data point of view, instead of understanding the context. And then you can ask questions. Because it's so much easier to have a conversation based on the data points. And then go, "Okay, help me understand, what is this function?" Because you could go down to functions, right?
And you can see the different way that they're shaped in functions. And you're like, why? Help me understand why? And it's a way different discussion to then just chatting, "Oh, how are you set up in ops? And then they'd like, "blah, blah, blah, blah." But, that's just what they know. So there's nothing against it. But when you have a data point like that, it goes, why are you like this? Why is it like three people here, four there, and like 12 to 18 here and then like two here. It doesn't make sense. They're kind of the discussions I love to have.
[00:17:19] Tim Brewer: So you go in and start those discussions inside of an organization. What are your tips for leaders who are just concerned about, how do we even have those— you know, you talked about job title, like everyone's got job title promotions. So, even title might not match pay. And you're looking at an organization, you're having these discussions and leaders don't want to have the honest or hard conversations. How do you set them up for success to have hard conversations where things do not match? Structure does not match strategy anymore for whatever reason. How are you working that through with leaders to help them communicate?
[00:17:54] Vinisha Rathod: Yeah, it's a really tough one. So, one of the things that I do is the Five Hindrances To Scaling. And it's something that I do, like accelerators and VCs and companies, and we actually really take a step back and I go, these are the five hindrances to scaling. So, five things that I see hold back a company to scale as fast as they might like to. So, the first one is focus. For obvious reasons, very important, knowing what your "why" is, what problem you're solving. The second one is family. So, the concept of family means that you could have an indispensable workforce, which is not always healthy. So, I say, like, you guys are a high performing sports team. Everyone has a role to play. Coaches make calls when people are not delivering on what they're meant to, because it actually brings down the whole team. Financials, ability to take on feedback. That's a really big one. So, how coachable are you? How much are you surrounding yourself with people with diverse opinion? And the last one is a funnel. So, how easy is it from your zero to cash, the moment you see it to the moment you can sign up or purchase it. Now I go back to the family one and the question I ask is, do you have the right co-captains on your team to deliver where you want to go? So let's go back to their focus and I go, we really need to delineate between people and position. And so, I go through the five of that and then they self assess where they're at.
And then I go, what you have from your zero to one, can be very different to what you need as you grow. Do you have the right people with the right capabilities and how to manage people, how to make tough calls? Do you want to be the one that's making the tough calls? I had a really young person that was, like, 25 that said to me, "I don't know if I should be CEO anymore because I've outgrown my capabilities are only to a certain, but does it look bad that if I step away?" And I said, "No, like that's incredible maturity." And we need more people to be self aware, but the reality is, is that we're not. We identify so much of ourselves with work and with the community that we create with our work and we don't talk about transition plans enough.
We don't talk about "what next" enough. We don't look at things objectively as what does the business need to be. Rather than what do we need to be? Does that kind of make sense? So, when you make it more about business, the objective, the culture, the anchor points of what you're trying to deliver, you can make more decisions and step back. But it is hard. So, I tend to start with the framework there to be, what's your hindrance to scaling? And if we look at the family bit and go, do you have the right co-captains in your ship to really get you to your objective? It's a easier way to start the conversation than that. It tends to start from— there's a bit of friction. Like, someone is writing the code. We're wanting different things with our work. We don't know what our end game is. One person spending time doing one thing, but it's not useful for another thing. And then the tension starts. It's usually when it's quite a lot later. It could be detected a lot earlier, if we are able to have those mature conversations. But they're hard. really, really hard.
[00:21:03] Amy Springer: Cool. Well, Vinisha, you are helping leaders ask these questions from your base in Sydney, but across Australia. You've done work in the Middle East. What's the name of your company that you're doing all of this amazing work through?
[00:21:17] Vinisha Rathod: P3 studios. So, P3 stands for people, partnerships, purpose. So, it's the three main things that I love to look at. And I do love org design so much. I mean, thank you. I brought these with me. They're the best.
[00:21:31] Tim Brewer: Ah, nice.
[00:21:32] Vinisha Rathod: And I use them more in leadership things because it's a really fun activity to do and I do nerd out on it. And I did read an org design book when I was on holiday, just to understand how do people make it work really well. It's like the green organization book. It's so good.
[00:21:47] Amy Springer: Yeah. I was gonna ask, what was the book?
[00:21:49] Vinisha Rathod: Oh, sorry. It's, Reinventing Organizations. It is really good. And they talked about like 12 green organizations, which were exemplary work of how people communicate. So, there was one example where if a leader wants to make a decision, they have to talk to several people in the company to create their business case of why they do what they want to do. There's not like this huge, long process. And then, another one is like, if a leader or CEO wants to make a decision, there's like a slack channel or like an open channel. he'll post his idea, get instant feedback from everyone. Positive, negative, this, that. And then, people are engaged and if there's any big objectives, they can talk to him. And then he gets stuff done like this. I just think that organizations lose their ability to be agile and make quick decisions because there's too many approval things. And that goes back to trust. That goes back to how you operate. That's that, "Oh, are you able to make mistakes?" People do anyway. So it's like, why don't we make mistakes, but we also be more efficient. Reinventing Organizations is quite cool. They talked about a lot of amazing ways in which you can operate better, but it does take effort, like anything else. But the rewards you get are amazing. You get talent that's screaming on your doorstep, like, "Please hire me." we get work with the best talent. get people that work more efficiently. You get people thriving in their best potential. And people is everything in an org. They can make and break them. The right people will be able to pivot things. They'll be able to see things in the future.
There'll be also as invested in the success of the org, as much as a founder is. And I think that's the ultimate for everyone, right? You only want to do that in places where you have psych safety, where you're working with people who are striving to be their best. Not people who are complacent, which happens a lot, too.
[00:23:42] Tim Brewer: Yeah, that'd be great. We'll put it in the show notes. We love book suggestions and the authors.
[00:23:46] Vinisha Rathod: There's one thing I thought really, really interesting. There was a meeting and they had people who brought their kids into the daycare, like they had daycare downstairs.
But during lunch, they'd bring their kids up. And they actually saw a really different side of their manager. And I think that's what COVID did, is it really humanized them. So I think, as people, if I look at it in the org design setting, you are a manager. You're not a human being. You are the person I report to or you're a senior director and blah. And then, when you see them with kids, you actually see a very different side and a very human side to them. And they also researched that with dogs. So, when you bring a dog into a meeting room, it actually brings a hostility down quite a lot. And especially if your dog likes to connect with maybe a co worker you don't like, but you're both patting something you love, that brings community. And I just thought it was a really interesting way of— if you humanize the people you work with, not quite where you're a family, but as same as a sports team. You still need respect, you still need a camaraderie, you still need closeness to operate effectively. These are just some techniques that they use that have been quite effective to create an organization that's quite healthy and functioning and working together.
[00:25:01] Tim Brewer: Yeah, that's a really great point.
[00:25:03] Amy Springer: Well, thank you so much for joining us today on the Org Design Podcast. We've been chatting with Vinisha Rathod from P3 Studios, with Tim Brewer and myself, co host of the Org Design Podcast.
Thanks, Vinisha.
[00:25:16] Vinisha Rathod: Thank you for having me.
