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About the guest
Learn more about Beth Gunderson and her 30+ years of Org Design experience on her expert page
Summary
In this episode of the Org Design Podcast, hosts Amy Springer and Damian Bramanis interview Beth Gunderson from the University of Southern California's Center for Effective Organizations.
Beth shares her unique journey into organizational design, beginning with a background in material science and evolving through various roles in manufacturing and HR. She discusses the importance of understanding organizational dynamics and the intricacies involved in merging two companies. Beth emphasizes the need for effective communication during organizational changes and the significance of providing leaders with the necessary tools and scripts to navigate these transitions.
The conversation highlights the STAR framework developed by Jay Galbraith, which serves as a foundation for effective organizational design. Beth explains how aligning strategy, capabilities, structure, processes, rewards, and people practices is crucial for achieving desired outcomes. She also addresses the misconception that organizational design is solely an HR function, advocating for its integration into organizational strategy.
Listeners will gain insights into how to engage leaders in the design process, the importance of asking the right questions, and the value of continuous learning in the field of organizational design. Join us for an enlightening discussion that sheds light on the challenges and best practices in designing effective organizations.
Transcript
[00:00:00] Amy Springer: Welcome to the Org Design Podcast. You're here with Amy Springer, and my cohost, Damian Bramanis.
Today we are interviewing, Beth Gunderson, Beth is part of the University of Southern California's Center for Effective Organizations or USC CEO, if you've heard it abbreviated. We met Beth at the Festival of Org Design in Minnesota, earlier this year. She just has such an amazing energy for org design, and we are so excited to share that with you all in this interview today. Thanks for joining us, Beth.
[00:00:33] Beth Gunderson: Oh, thanks for inviting me. I'm thrilled to be here.
[00:00:36] Amy Springer: To help set the stage, help people understand how you got to org design, can you tell us, from your own career experience, how did you find your way into org design? What was it that attracted you to this part of business?
[00:00:52] Beth Gunderson: Well, it was a very circuitous route. And I'll be cognizant of time here, because it's somewhat of a long story. So, I'll try to synthesize it. My background is actually material science. So, I was a package designer in my first life. And so, I design not the graphics, but— if it was a plastic container, what kind of plastic? What kind of paperboard was it? I did that in the food industry for a number of years and then had an opportunity to move from a R&D role into supply chain manufacturing. And I was somewhat a bridge between the manufacturing locations and the R&D organization. Because in organizations, if you've ever worked in manufacturing, there's many times there's friction between certain functions and there's always friction between R&D. They have a great idea for a product, but it won't run in the plant. And so, I had an opportunity to start seeing how organizations operate or don't operate. It was almost subconsciously, I was learning about organizations. And then I moved into an HR— it was at the time called, Generalist, role. And then did a rotation in compensation and benefits.
But there was a small group forming in the company that I was working at, in the food company I was at, that was called organization effectiveness. And it was just two individuals and I raised my hand and I said, that kind of seems like a unique intersection of all the work that I've done. And so, it was your typical OE role, which was leadership development, performance management, a lot of the practices of HR that were centralized. And then, our company got bought by a larger food company, General Mills.
And when you bring two companies of like-size that come together, of course, you have to start thinking about, "How is this going to be designed?" Because you don't need two finance functions. You don't need two full R&D organizations. Being in a role that was still org effectiveness, I was getting asked to do a lot of that work, with, really, no license to drive, to do the work.
So, I knew that USC was where Jay Galbraith came from with the STAR framework. So, I thought, I better get some training in this area. Went out, connected with the professors, brought them into General Mills to help build my capability and to bring credibility to org design. And the more I did it, the more I realized, this was, like, a perfect role for me because I've seen the system, I've lived in the system, and now I can help orchestrate the system, system being the organization. From there, I just continued, mainly focusing on large scale, restructures, reorganizations, redesign within General Mills.
And when I retired six, seven, eight years ago now, I am now in adjunct teaching. Org design, as well as consulting in the space. So, long way to say, I spent a lot of years in an organization in different roles and then doing designing.
[00:03:58] Damian Bramanis: I loved how you talked about the microcosm of org design inside materials packaging, and then larger into effectiveness within the organization, and then in the even larger scale, still with the merger and acquisition. Can you talk about how things change from those different scales and what threads still say the same across them?
[00:04:16] Beth Gunderson: Obviously when you're designing or you're working within just one function, you tend to almost have a myopic view of the organization. And so, the downside of that is that, it can create the silos, that as designers, we are always trying to break down. You really see that come to light, because your work and your function is the most important thing going on in the organization.
And it's really difficult to raise your head up. Then when I started to get a broader view, moving from R&D to supply chain. I suddenly realized, supply chain does have a valid point in their concerns. And I'm seeing that now that I'm literally in their shoes. And then, when I laddered up to be the enterprise, then it was a greater appreciation for all of the intricacies, and all of the balls juggled. It always amazed me when I was in a function, I would always say, "Why don't leaders— they should know how to talk about change and they should know..." When you get up to the enterprise level and you see all the things they're juggling, now I understand why I need to literally give them a script to say, "These are the things during this org change I need you to say, do, and reinforce." In my younger days working in a function, I would have bristled at that and said, "That should be there, you're getting paid to do that". When you suddenly see the entire enterprise, you say, "Oh, my role is to help them understand it and provide them— not down to the script of "Here's exactly what you need to say", but help build their capability in articulating and communicating change. So, that's just a small sample of what I think you see when you're down in the organization all the way up to the enterprise level.
[00:06:03] Damian Bramanis: That's great. It's interesting, actually, you mentioned the script. I think that's something that hasn't come up very frequently on the podcast before. Can you talk to us a little bit more about what sort of things that you might find important in that script, or what sort of things need to be covered?
[00:06:18] Beth Gunderson: You know, It was interesting, I worked on a large-scale workday implementation. So, it was changing the operating model of HR, and changing the role of managers and leaders in the organization. And any of us that have gone through that, the first thing you get a lot is, leaders crossing their arms and saying, "Well, now I'm doing your job for you." And throughout that process, one of the things that we did that was highly successful, that I've used with other clients now, is that the project leader and myself would meet every six weeks with every one of the C-suite leaders. And we had done our due diligence to figure out what were going to be their hot buttons around this implementation. And for example, the leader in our Latin America business, we knew that she had 1,200 merchandisers who put product on the shelf in the stores in Brazil, who didn't have electronic devices. And so, we went in with a remedy for that. And we said, here's how we're going to handle that. She was amazed that we even knew that we learned enough about her business. And then, we armed her with talking points, because we knew she was going to get pushback from the Brazil office to say, "How are you going to deal with these 1,200 people?" She didn't have to stand up in front of that group and not have something to say. We gave her bullet points. And so, every six weeks we would reconstitute those bullet points with wherever we were in the project, and whatever we knew that leader was going to be faced with, so they could go into their next all-hands meeting, and they didn't have to stumble and fumble around. So, it wasn't giving them word-for-word, but what we knew were going to be key resistant points or positives that we would say, "Here are the six things that you can bring up to your teams."
And it was highly successful. They felt more confident. They felt more aware and in the know, and they felt like we were listening and not even just listening, but getting ahead of what their challenges were going to be. And what we ended up doing with that then, is an SDR. Some of your listeners may use that, the "Say, Do, Reinforce." We'd also give them every six weeks, "Here's what you need to say in those bullet points. Here's what you need to do. And here's how you will need to reinforce that." And so, they could expect that every six weeks. "Oh, this is what I need to do. I'm busy enough with my other work, but this gives me a turnkey way to communicate."
And frankly, an unintended consequence is you're building leader capability around how to communicate and what questions they need to ask of subsequent projects that come along, that are major redesigns or major changes.
[00:09:02] Damian Bramanis: It's so important with design about not just locking yourself in a room and thinking about this ideal universe, but really meeting people where they are and understanding the context of the organization and the people in it and, really what they're facing day to day.
[00:09:16] Beth Gunderson: The one caution I give with that is, I think all of us who've worked in this design space find that, many times, leaders will ask us so many detailed questions about what's going on with the design. And we spend more time creating decks to tell them about it, than we do to do the work. While I say that we created this every six weeks and it did take time, but that's all they got. So, if they wanted more detail, we went back to our change principles and one of them was, you're going to be given information as you need it. Trust us. I would have people, hypothetically February, come to me and say, "What's the communication plan for the redesign that's getting announced in January?" And my hair's on fire with just doing the work of that week. I still do this to this day, I'm quite deliberate about, you will get information when you need it. Because, when I see a design team spending more time trying to just internally communicate and keep people calm, then I know we haven't done our job in laying the foundation of a good change practice.
[00:10:25] Damian Bramanis: Yeah. Absolutely.
[00:10:25] Amy Springer: Beth, you mentioned that you actually started your career in the business, on the tools. Are there any tips you have for that leader on the ground, to engage with a design process?
[00:10:40] Beth Gunderson: If I were a designer or if I were a leader?
[00:10:42] Amy Springer: As a leader. How do you encourage them to ask the right questions or understand where they're not going to know all the information?
[00:10:50] Beth Gunderson: Yes. Hopefully I'm taking this in the right direction. The way I get leaders curious about org design is, I don't lead with a framework, I don't lead with a model. And I'll never forget one session I was doing with a team. And I was there to do team effectiveness and help them with their strategy session. They were having a conversation that I wasn't facilitating at the time. I'm in the back of the room. And they were talking about, "Well, our strategy is this. And do we need to change our structure?" And I literally just raised my hand and I said, "Could I just drop a few things into this conversation?"
And I went to the flip chart. And I drew a box and I put the word "Strategy" in it. I said, "I'm hearing you talk a lot about strategy. Anytime I hear that, I like to understand, what are the capabilities?" and I drew a box below it. Literally, I drew the STAR. And I didn't say it was the STAR, but I walked them through. "So, once you know your capabilities, and I heard a lot of you talking about structure. That's when we talk about structure." And then, I took them to process reports and people. And the CEO of the organization looked at that and he said, "I want that, I want that. You just articulated what we need to unlock. How do we do that?" And so, I think many times we are so passionate about all the things we have to offer with org design, that we march in with our STAR framework or McKinsey 7-S or whatever. And many times, a leader, the last thing they want to see is another framework.
Now, having said that, if it's an engineering organization, they love frameworks. How I get leaders curious, is I insert it into the flow of what they're talking about. Or, I ask questions about. If they get into structure, I will take them back to, "Tell me about your strategy. Tell me how that aligns to your structure." I always use the quote, that at least at USC, we attribute to David Hanna from P&G is, "All organizations are perfectly designed to get the results you get." I use that line a lot. Because when I work with teams and I hear the leaders say, "Oh, we're losing share, we're lagging in this area, or we don't have the digital strategy we need, or we don't have the people we need. I said, "You're perfectly designed to get what you get. So, let's talk about what you're looking for and the strategy and capabilities, and then we get to structure. So, I think it's finding ways to ask the questions of the leaders. Because, I don't think on their own— their natural curiosity needs to be sparked with questions that we, as designers, ask that get them interested, to get to the point where that leader said, "I want that. What do I need to do to get you to help me unlock what you just drew on the flip chart?"
[00:13:41] Damian Bramanis: You talk about that spark. That spark of interest and need for org design. Do you see other things that really draw people to org design or the clicking point where they're like, "Yes, this is exactly what my organization needs."
[00:13:54] Beth Gunderson: I would say there's a continuum of things that I use, all the way from this subliminal introduction of the STAR framework. The other thing is I read extensively. I have a lot of different blogs that I read, and some very unusual things that I make connections into org design. And what I end up doing then, is I will send an article, or I will send a post to a leader and say, "Here's something for you to think about, or here's what another organization is doing." I worked with a consumer products organization recently, and while they are a massive organization, I sent them a little case study on Haier, that are very self managing, and that are very agile.
Now, will this company ever go to that? No, but it was an interesting spark that got them thinking about, how do we push more accountability down into the organization? We're never going to be a Birdsock or a Haier, but here's some interesting concepts. So, I think there are ways, and as designers, I think we need to be continually learning ourselves, even on topics that aren't directly related to org design, that give us some insights that we can translate into, questions that we ask.
[00:15:14] Damian Bramanis: Yeah. Many of our listeners might not be familiar with what the STAR framework is. Would you be able to give a 25 second overview of just a hint of what that might be?
[00:15:25] Beth Gunderson: So, the STAR framework, Jay Galbraith, who was a dear friend of mine. He's passed away now, five, six years ago, he developed this framework back at USC. I think it's almost 50 years ago now. And if any of your listeners deal with any other consulting firm, the 7-S, the cube from AlignOrg. They're all really based on Jay's STAR framework. And I'll just quickly go around the framework. At the top, as I mentioned, what I drew on that flip chart, you start with strategy. Strategy is the foundation to design. And once you know your strategy, then you ask, what are the organization capabilities that are needed to achieve that?
Not the competencies of your people, but the org capabilities. When you're clear on that, that's when you develop your design criteria, and that takes you into the structure part of the STAR. And we talk about core and lateral structures. Think about core as the skeleton. Basically it's the org chart. It's the reporting lines. And the laterals are the muscles. They are the connective tissue that make it work. The horizontal linkages. From core and lateral structures, you go into processes. We talk a lot about direction setting, decision making and communication, as the key processes you need to look at when you make any change to your structures. Then we go into rewards, both monetary and non-monetary. And then we look at people practices. And we talk about the STAR framework— or any design framework— is a systems-based framework. So, anytime you disrupt or change a part of that system, you need to look at the rest of the elements of the STAR, to make sure it's aligned. It's a little more than 20 seconds.
[00:17:09] Amy Springer: I guess, Beth, I'd love to know, there's leaders in organizations that don't know consultants are out there to help them. They don't necessarily know that org design is a concept. What are some peripheral terms they may be hearing or thinking about, that could help set them on that path to discover something like the STAR model?
[00:17:33] Beth Gunderson: Right now, I think a big buzz word that you hear a lot about is, operating model. What's our operating model?. Very often, there's a confusion over op model and org design. I think if you ask 10 people, you might get 10 different definitions, frankly, of what those are. And the way that we look at it, is that the op model tends to be a graphical depiction of how value or how the business operates.
It's at a high level. From that op model, that visual, then you can start going into, then you apply the STAR framework to that op model. You say, "What are our design choices that we have around, how we would be structured? Where decision rights would sit. What type of people do we need? So I think op model is a really good entree into org design. And even if they call the "op model", their "org design", I guess it doesn't matter. It's just language to get you into that discussion. So, I think operating model is key. I think anytime you talk strategy— and this is a bit of a tangent I'm going to go on— but if I ruled the world, if I were queen for a day, I would put organization design, inside strategy, inside organizations. I would take it out of HR and I'd put it into strategy, because anytime leaders are talking strategy or a business model, go back to op model. Anytime they're talking about those and making a shift, they are talking about org design as an outcome or an output. So, the moment I hear those words, I think it's a great entree into— and what I will always say when we teach the org design course at USC, I will ask the class, "How many of you know your strategy team or are aligned to your strategy team?" I'm seeing more people raise their hands now, but, you know, five years ago, I'd be lucky if I had one person. One of the things I'll always say to the org designers inside organizations, if you aren't connected to your strategy people, that should be the next lunch, coffee meeting you put on your calendar, is should be to get to know them. And for companies that say we're not big enough to have a strategy, I'll ask who is that strategy person, and it tends to be finance. So, connect yourself to those people. So, I think op model, strategy, business model, any of those kind of words give me pause to say, that's a great place to help leaders understand how you connect org design to that.
[00:20:13] Damian Bramanis: You did say thinking about org design rather than as an HR aligned discipline, but as a strategically aligned one. Is there more that you'd like to dig into there around why being external to HR is beneficial?
[00:20:28] Beth Gunderson: When you say org design and change management, you say org design, they think structure. Change management, "Oh, it's the communication that we send out with the new org chart." And I think the more we have HR leading those projects of org design, the more it solidifies those two principles, if you will, those two concepts. When you move it out from HR and you put it under a strategy organization, strategy— immediately by saying that word, gives you a sense that it's enterprise-wide, it's strategic, obviously, in nature. And I think it breaks the paradigm of that this is an HR-driven structure, head count, cost reduction project. Gives it a sense that it's driving the strategy of the organization, which is what sits at the top of the STAR. Plus, for the people who are doing design, it puts them closer to the heartbeat of the organization. So, when I worked at General Mills, I was tightly aligned to our Head of Strategy and he was also Chief of Staff to the CEO, if you will. And he was getting access to that room much more than I was, but we would discuss in advance if he was going to be running a strategy session, what might my role be? Maybe if it wasn't in the room, behind the scenes. I wouldn't have had that access if I was just sitting there.
[00:21:59] Amy Springer: When you mention the mindset shift of org design from HR, out into strategy. Also, in my head, my brain shifts the capabilities, that sounds like you're shifting from a center of excellence of org design into actually expecting leaders across the organization to have some org design capability. Have you seen that shift starting to happen? Are you seeing more of that capability being built throughout organizations, whether intentionally or in an indirect way?
[00:22:29] Beth Gunderson: A month ago, I did a custom org design program for an energy solutions company. And I was thrilled because they had business leaders and their HR partners come to the session. Which I'm seeing a number of the clients I'm working with right now, they are trying to build a capability, not just in HR, but in their leaders. When I have a CHRO that comes to me and says, "I want to build capability in my HR organization." I always have a bit of heartburn because I will ask the question, "I love the intention, but how much capacity do your business partners have to be able to do org design? Because it cannot be done in 30 minute increments. You have to have the capacity. Then, I'll usually hear the follow up. "Well, you know, we've installed Workday, so it's taking all of that." Well, it really hasn't. And I don't see— or, "We're going to get to that point. We haven't moved fully, but we want to start transitioning them to be more strategic partners."
That gives me— the heartburn is like up in the throat when I hear that. I do think that the more that companies, like this one I worked with, where they can bring the business partners— and what was kind of the single tier moment at the end of the session. Because we customized it for them to work literally on their business challenges and do some org design work. One of the leaders said, "I really feel like I have a business partner next to me, after spending these few days, working on this challenge. So, I love to see organizations doing that capability, building together. It's not common at this point. I'm seeing a bit more of it. But what I would say if you are inside an organization and you have a large consulting firm coming in to do a project, as much as you can, get them to toss out or — I'll give you an example. We had a large consulting firm come into General Mills. They brought their org design framework. I was working so hard to embed the STAR framework. I worked with that consulting firm and I said, "Hey, I don't want to use your org framework. I want to use the STAR. Now, what does that do to the consultant? Makes all of their deck building, they have to insert this, it's not just turnkey. The analogy I will use is that, these consulting firms are like thoroughbred horses. They're going to come into your organization, they're going to run as fast and as hard as they can. They're not there to build capabilities necessarily in their leaders. They're there to execute on a project and get it done. As an org designer, I had the saddle. I had to throw the saddle on that thoroughbred horse and I had to maneuver it through the organization. And that meant saying timeout, we're going to use the STAR. So at the end of that project, every leader in the organization had gotten purview to the STAR.
We had used it. They had designed against it. And I would contend if you go to General Mills now and ask some of the top leaders who are still there, do you know the STAR? They will know the STAR. So, that would be the advice I give, is that if you aren't able to bring your leaders into a training session, any project that you have— if you've got a big firm, especially in there, use a framework that you want to start embedding in the organization.
[00:25:58] Amy Springer: Yeah. And if there's a leader that's interested in exploring the STAR model, they don't have consultants coming in, is there anywhere you'd recommend they go to find out more, to get some practice?
[00:26:09] Beth Gunderson: What I like about the STAR framework, or any framework that's been published, is there are a lot of articles out there. So, I tend to, give like a little quick, like, "Take a read at this" or, "I pulled this off YouTube. There's an overview of the STAR framework.
It's five minutes. Take a look at that." I like to give some reading to certain leaders, or if that's not their method of learning, then I will talk about an example of how we've used it . Or, I don't like to use this, but if you've had a design project that has gone terribly off the rails in your organization, you can use that and say, "We don't want another X, Y, Z project. Do we?" I want to test this. I want to pilot this. Do you have interest in? I think I can help us do this in a more intentional way. Unlike what we did in project X, Y, Z."
[00:27:05] Damian Bramanis: Beth, I'm sure I'd love to hear so much more from you. If our listeners do want to hear more from you or learn more, what's the best way for them to look for you or reach out?
[00:27:14] Beth Gunderson: I am on LinkedIn, Beth Gunderson. There's a few of us out there, but I think you'll be able to see, I'm the only one, I believe, that's doing org design. So, please would love to hear from you. If you're interested in, even, what articles, what books might be of interest. I'm always open. I am a huge networker, so I love to expand my network. If anyone's interested, I'd be happy to even do a virtual coffee.
[00:27:39] Damian Bramanis: Great.
[00:27:40] Amy Springer: Amazing. Thank you.
[00:27:41] Damian Bramanis: Thank you so much for your, time today. Your humility and your experience have really shone through. It's been really great hearing about all of the things that you've covered, from the STAR model, to how operating models are a great entree into org design, how to lead, but not lead with a framework, and the way that org design connects with strategy.
What you said earlier about all organizations are perfectly designed to get the results that you're currently getting.
[00:28:06] Beth Gunderson: That's right. Well, thank you so much. I have such a passion for it. So, this was a wonderful way, for me to at least start my— I'm starting my day here in Minneapolis. So, great way to start my day. Thank you.
[00:28:16] Damian Bramanis: Thank you so much.
[00:28:17] Amy Springer: Thank you, Beth.
