Episode: 186 |
Stephen Redwood:
Organizational Design:



Stephen Redwood

Organizational Design

Show Notes

Our guest today is Stephen Redwood, who has been a Partner in the Organization practices at PricewaterhouseCoopers, McKinsey & Co., Oliver Wyman, and Deloitte.

He is now running his own firm, Redwood Advisory Partners, where he helps clients develop a high performing organization and an exceptional employee experience.

In today’s discussion, Stephen explains what an organizational design project is all about, and he also discusses his other business, Tri Endeavors, where he coaches elite triathletes.

To learn more about Stephen’s triathalon coaching practice, visit http://triendeavors.com/

And To learn more about Stephen’s consulting practice, visit https://redwoodadvisorypartners.com/

One weekly email with bonus materials and summaries of each new episode:

Will: Hello Stephen, welcome to the show.
Stephen: Hi Will, thanks for inviting me along, great to be part of this.
Will: Stephen, what is a common misconception that people have about what an organizational consultant does?
Stephen: It’s an interesting question because I think when people think about an organization design consultant they tend to think about boxes and lines on a chart and so the core structure of the organization which really represents in solid form something that’s much more complex than what it looks like on paper. Organizations are dynamic sense of connections between people and things they do, and the effect of the organization is to essentially provide a skeleton around which the organization hangs.
Stephen: I think the common misconception is that it’s just a simple question of boxes and lines on charts, but of course how well the organization operates depends on a whole range of factors because essentially, you’re redistributing power across the organization when you change the structure. Our leaders operate through the structure, how people respond to their place in the structure is all part of the dynamic and how work is linked up and flowed across the structure as well is another important component. To think only in terms of boxes and wires means if you focus on it in that way it’s kind of a simple job, but to knock on consequences of where you get to in terms of what you put in place are much more complex than that.
Will: Give me a list of the types of things an organizational consultant would get involved. You mentioned and referred to the boxes and wires, so defining roles, defining responsibilities and reporting relationships, but it’s so much more than that. What are some of the other elements that you as an organization consultant would assessing and helping to design?
Stephen: I think at one end is a simple checklist and then there’s complications around it. But on the simple checklist side of things there’s the roles and responsibilities. There are the spans of control that people have at different points in the organization. There is the set of metrics and goals that you set up for roles within that organization. There are considerations about what is the value of a particular job at a different point in the organization, how do you reward it. Then there is the overall cost of the organization as well. That’s maybe not all but it’s probably like 80% of the things that are on the checklist that you have to think about in terms of the structure because what you’re doing in going through those different activities is thinking, A, what is a particular role in the organization and then how do I weight it in terms of its importance, and therefore, how do I value it in terms of that I provide to the individual, and what skills and capabilities are going to be required ideally to fill that position. That’s the simple side of it I guess.
Stephen: I think the less simple, more complex side is the politics of organizations because as I said earlier, you’re kind of redistributing power across an organization both within the employees in terms of how they operate within it individually and collectively, as well as you would expect in terms of leaders and how much control and responsibility they have too. What interests me a lot about these kind of situations is these kind of projects is how much power is not taken into consideration, is basically devolved down through the organization depending on how engaged and motivated employees are because you could have, theoretically, a great organization in place and you could, theoretically, the power structures of most leaders in place, but if you haven’t taken into consideration what the nature work and the environment that people operate in down through the organization looks like you could well have a situation where people are not either giving you the best or worse, actively disenchanted, disengaged. You end up with an inefficient structure with overhead that’s probably not adding much value if it’s not encouraging those employees to feel like they want to do their peace.
Will: When you first become aware of a potential need at a client, what are the types of reasons that someone is calling you to have an initial discussion? In some cases, perhaps they have something very explicit, but in some cases, I can imagine CEOs might be saying that the organization we’ve grown and it’s just not working quite right, I don’t know what the answer is or I don’t even know what the exact problem is, tell us a little bit about the types of reasons that you’ll get called in.
Stephen: It tends to be event focused. If I can cast my mind back through projects I’ve done in the past, in many cases, there’s been a change of leadership, a new CEO, or a new head of business unit. In that kind of senior role there’s only so many levers that you can actually pull in the organization before you run out of options and have to just rely on the organization doing their piece. You think about it as a new CEO, you can redeploy resources and budgets, and allocations, things like that, and change your leadership team. You can change your strategic direction, you can change the structure and then you’re out of options beyond that, beyond hoping that people will do their piece. Structure is one of the easiest things, at least conceptually, for a CEO or a new business leader to utilize as a technique to put their stamp on the organization, to redirect things and the flow of work, and the priorities that they give to the organization. That kind of event is very common.
Stephen: Other events like a new acquisition where a new substantial chunk is brought into the organization and the question often is do we keep this as an adjunct or do we fold it in and how would we make up our mind one way or the other. Recently a less kind of event focused reason might be just appointing growth. I recently did some work with a company where they just reach a point in growth where they felt like they were still operating under the structures that they’d been using since they started out as a company almost and things had grown over time, new things had been put in place. They all made sense at the time, but when you stepped back and looked at them collectively they were thinking well maybe it’s not as efficient and effective as it might be, so let’s just step back and have a look at how we should organize ourselves for the next phase of growth.
Stephen: Then of course, you’ve got the all too sadly common situation which companies are struggling and they’re on the other side of the curve, and they have to think about how do we deal with the fact that this structure is just carrying too much cast for the organization. How can we reorganize to make it fit better with where we see our particular market going and the economics of the business.
Will: What are some mistakes that leaders make when they think about making changes to an organization?
Stephen: It’s always a challenging one. I think the single biggest mistake is to believe that you’re one and done, that you’re putting in place a structure and that’s the structure that is going to work for you going forward and it will solve all of your problems. Of course, it’s just one component of that dynamic that I was talking about earlier. I think oversimplified, over-expecting the structure to sort things out across the board is a big mistake.
Stephen: Perhaps a bigger mistake is that I’d say in pretty much 100% of the projects I’ve worked on over the years not unreasonably you design an organization that you think is the right target structure to be heading for, but then the reality of well what about the people we have in place and where do they fit in this. Or are we able to attract the kind of skillsets into this organization, what’s the reality of our ability to attract the level of talent we need comes into play.
Stephen: Then there’s the question of what about it doesn’t matter how senior you are in the organization, there’s two or three people you maybe have a close connection to and you think I don’t want this person to suffer or perhaps they have more leverage over you for some reason and so you start to make compromises and you kind of step by step end up not really having moved the needle very much and compromising your way back to almost where you are starting from. That is perhaps the biggest issue that I think organizations face. I hope bringing my experience to bear and my willingness to speak up, and their expectations indeed that I will do, can steal them and give them more backbone in terms of just not allowing all those compromises to come into play and undermining the quality of the thinking that’s gone into planning where they should be getting to.
Will: What can go wrong in an organizational project?
Stephen: There’s so many things which can go wrong. There’s a ton of things, of course, which can go right. For any one of those components that I talked about earlier, I guess they can go right or they can go wrong. You can have false expectations about your ability to recruit. You can in your strategy or in your financial planning you may have got it wrong in terms of your targets and expectations about where the business is going to go and therefore, what weight you can carry in terms of the organizations. You can, as I alluded to before, make compromises in terms of putting people in positions that because you want to keep them in the organization, which is perhaps laudable, but they’re just not the right person for that role, so personnel choices can go wrong. But I think probably the main thing which can go wrong is it’s pretty commonplace to say communications are important, but the way in which you make the changes happen in the organization, for better or worse, in terms of the impact they have on particular individuals, can have a massive impact on the workforce at large. The process of change is as important, I would say, as the process of determining what the organization actually is going to look like.
Will: For someone who’s not an expert in organizational consulting, like me, what the word, serving senior leadership of a company on some other matter, strategy let’s say, or operations, or marketing, what are some questions that we should have at the ready to be asking the senior leadership to help, questions related to organization that we should be asking just to help understand the organization but also to identify potential challenges in the current organization.
Stephen: I think top of the list it what’s not working now that needs to be working, so you hone in on what’s the problem set that you’re trying to solve for, which may lead you down a path which says this has actually got nothing to do with organizations, but to do with maybe something else. What’s the problem you’re trying to solve is one question. Second question is what is changing about the business going forward that you need to accommodate so that we can better understand what new activities and skills are needed within the organization going forward.
Stephen: A third question is what level of change both in terms of cost, but also in terms of impact on the organization can you accommodate over what period of time so that you get a sense of this is something where the load needs to be spread over a longer period, or this is more of a big bang, needs to happen in the short-term, and also get a sense of what’s the scale of change you should be planning for.
Stephen: Maybe a fourth big question is what is the level of engagement going to be of senior leaders in taking this forward, because setting something like this off and running, and then not staying engaged just means that people will not give it the important significance that perhaps it deserves. As we all know far too well, if the senior person isn’t paying attention to something then other people will pay less attention to it. The level of involvement of senior executives, and the CEO in particular, if this an enterprise wide change in the exercise, really gives it the power and the momentum to keep it going, and to ensure that people give it the attention that it deserves.
Stephen: I think probably those are the big questions. I think I’d add one more though as a consultant. I always ask what is so complex about this problem that you need to bring someone in from the outside, so I get a sense of what they’re struggling with and where I can as a consultant and advisor sit there and bring the most value. For me, that’s a really crucial question to understand. That way you’ll know where you can add the most value, but you’ll also get a sense of am I just being hired as extra hand or am I being hired here as a change agent that’s really being asked to help guide and advise them on something in a really important way.
Will: That question is so useful, not just for an organization type effort, but for almost any type of consulting project, so powerful to ask. It almost seems like we’re arguing against bringing in expert advice, but it’s saying why are you looking outside the organization, what have you tired already internally and what happened, and what made you decide what’s the catalyst to go and look for some outside advisor because no one likes to spend money on some outside advisor if you can do it in-house, and you shouldn’t, so what’s special about now?
Stephen: Yeah I agree. It’s been interesting in my career the different roles I’ve had to see how easy or difficult it is for me to ask that question. I’ve got my own business now and it’s very easy for me to ask that question. Clients appreciate it because they can see I’m trying to find the way which I can be most helpful to them and it’s not that I’m trying to just bring a scale of the project, what’s the biggest scale I can bring to helping you here. It’s more about how can I be most targeted and most valuable in the belief that, A, that’s a great outcome for the client and, B, that it will strengthen the relationship that I have with them as well and they’ll be more appreciative of it, and it will more sustainable. In so doing, for me, a very important component of my work is I always ask myself is this a client I want to work with, are these people that I will get some development from myself by experiencing working in an environment and will I forget about the financial side of it.
Stephen: But what I feel is a rewarding quid pro quo if you like in the relationship so that I’m not getting myself trapped in a testy relationship with the client where they begrudge having to bring in a consultant, but rather, a relationship where they see it as much more than a collaborative partnership. Those are the kinds of consulting situations I try and hold myself to and try and foster.
Will: You’ve been a partner at globally known top firms leading their organization practices. You’ve also spent several years as an independent consultant. Talk a little bit about the differences in your approach and what it’s like for you in those two different roles.
Stephen: Yeah, it’s been a fascinating journey for me. I’ve been a consultant now for I think 31 years, I guess. I guess in year 2 I probably thought I’d got it, in year 5 I probably that I’d got it, and realized in year 1 I didn’t, and here I am in year 30 thinking, “Do I really understand fully how to do this as effectively as I should be?” One of the great things about being a consultant is the fact that it’s a continually evolving experience because the business marketplace keeps changing, and the experience of working with different clients, every client has something slightly unique about them.
Stephen: It’s been a fascinating journey and I think the difference between big firm consulting and small firm consulting is as much as anything it’s about the nature of the relationship you have with the client. In the smaller firm world that I’m operating in now I feel a lot more of an intimate relationship, a much more personal responsibility in a way to the client and it’s a much more authentic relationship, not to say it’s not authentic when you’re in a big firm world, but it’s that much closer to you. It’s much more about you as an individual, and therefore, there’s that responsibility you feel incumbent on you to really deliver for the client. It makes you face the need to be really close to what they need, what they’re doing. Whereas, in a big firm I guess there’s always the added difference of the fact that you’re carrying a bigger brand name. The client looks at the brand name when they look at you often they’re looking for something different when they go to a big firm, and that often takes the form of this is a big hairy problem that needs a team of people working on it that’s going to be big and we’re willing to pay for it. But also, we want to feel the confidence of a big brand name behind it and also the ability to have some comeback as well.
Stephen: There are different dynamics at play and I think the great thing that I’ve learned from playing in both pools is that there’s a huge range of different ways in which clients want to interact with consultants and use them. They need all types, individual, small firms, big firms, for different reasons. The smaller it gets, I think the biggest difference, as I said, the smaller it gets the more intimate it gets and for me at this stage in my career that’s a great feeling to have because you feel as though you can really bring your experience to bear without having to mix it with a ton of other alternative views that you might have to bring to the table when you’re in a much bigger partnership or organization.
Will: In addition to your career as an organization consultant you are also an endurance athlete and you serve as a coach to endurance athletes, tell me about that side of your life.
Stephen: It’s been a really core part of my identity I guess since I was a young kid. I was a rower in my younger days, or in the U.S. you can say I did crew. I’ve always been doing endurance sports. Then a few years ago now I guess, maybe 8 or 10 years ago, with one of my daughters who was a great runner she needed a bit of change of direction because she was getting injured so much from all the run training and needed something that would spread the low more and so she and I said let’s give triathlon a go. It was really just a continuation of a life of doing endurance sports for me and I got into triathlon and I’ve been really deeply involved in that for the last 10 years or so. Along the way I’ve done a ton of Ironman distance races. I’ve done I think 16 or 17 now, and a similar sort of number of half-Ironman distance races.
Stephen: It’s been a great experience for me because the nature endurance sport is that it really tests your resilience, your persistence, tests the limits of usually goes beyond what you think you can do. It’s hard for it not to be rewarding when you experienced having taken on something that is a massive challenge and then getting through it.
Stephen: In the last few years I’ve also got into coaching others as well which in itself is super rewarding. I found there’s a relationship between what I do in the endurance sport world and what I do in organizations as well. It’s interesting to think about it because the big challenge for people individually is if I want to do this thing that’s going to be very demanding on my time, on my body in endurance terms, how do I make the time for it, how do I do the training, how do I structure it so that I could do this amongst the rest of the demands of my life, stay healthy, avoid injury. That brings into question a whole range of things around recovery, nutrition, the volume and intensity of the training you’re doing, and how you stay motivated. You step back for now and say, “Well, didn’t a lot of this relate to what happens in organizations as well in terms of how do we keep people motivated. How do we be sure we’re not overworking them so that there is sufficient recovery built into the way things operate and as there’s sufficient level of individual identification with what it is they’re trying to do to perform. I love to think about that crossover between the two fields and I think it’s hugely relevant.
Stephen: Just to go off on a little bit of a tangent, one of the tough things people find is in fitting an endurance sport into your life the challenge if you’re new to it is because it takes quite a volume of hours is to structure your time differently so you fit it in and to get through the early months of finding it really hard to get up in the morning say or to fit it in an evening, or at whatever point in your day on a regular basis because consistency is king. That’s really about working your way through to the point where it becomes a habit. When I think about habit formation in the organizational context I think it’s a super big problem that companies have when they’re trying to bring about changes because all too often leadership will set in play an organizational change, say a restructuring.
Stephen: After a few months the leadership’s attention will drift away from this onto the next thing they’re looking ahead to. The people who were given responsibility for driving things forward feel out that lowered sense of focus and the energy flips out of the system. Before you know it, things have lost stem or things have started to fall back into old habits in the organization because they haven’t given enough persistence, enough attention to get through to that point where the organization has established new habits of how they work.
Stephen: I think that’s a massive issue in organizations and it really I think comes down to how they organize around being persistent to chase after the goals that they are looking to achieve organizationally. That looks very like how do you do that as an individual when you got a hobby that you’re trying to achieve something big in because it requires some of the same sorts of mental outlooks. Does that make sense?
Will: Can you give an example of how you’ve helped coach an organization to build that organizational habit?
Stephen: I don’t think that it’s rocket science, but I think coaching an organization to build habits really revolves around how you hold influences and leaders in the organization to a pattern, which is reinforcing where you’re trying to get to. That’s about working with them often enough or putting in place structures in meetings or in their schedules, which mean that time is put aside to continue focusing on this over the long haul. It can be around how you put in place communication structures and system, which keep the themes alive and keep driving them forward. It should also I think involve … I mentioned the word influences, it’s not just about leadership, it’s about identifying people in the organization who can have influence and shape the way in which people think about things and engaging them in helping to move things forward and giving them the tools. Then if you’re around those kinds of activities, building in checkpoints, which are planned way out so that you really can step back and say are we still bringing the same energy to it, have we achieved the progress we need to. You’ll know about that through I guess a number of things.
Stephen: I’m digging way back in time to some of the early work I did in this space around what do we measure in order to know if we’re making progress. Well, one is to have performance goals, there are performance metrics delivering what we expected them to deliver. Secondly, are people completing the activities we expected of them in terms of moving this thing forward, so have the communications been happening, have the meetings been happening, have the changes that we planned for been happening. Then the third is, is the culture shifting and you can measure culture, employee engagement, things like that to determine if you’ve been making progress. You put those three things together, is the culture shifting, are people doing the things that they said they would do, the activities happening, are the metrics improving, and you’ve got a pretty good way of triangulating around the way in which the organization is operating, so you can track those things over time. I think all of the above are the kinds of things that you could do in order to try and drive habit formation into the organization and get yourself to a new place.
Will: Tell me a little bit more about how you actually work with endurance athletes when you’re coaching them. I imagine you’re not out there running alongside them as they do their 15 miles. How do you interact with people, what do you help them with, what’s the whole process look like?
Stephen: It’s kind of interesting because coming out of a crew environment, a rowing environment when I was younger where you would literally have a coach in a launch alongside you watching what you’re doing because you’re trying to sink up a whole crew of people. It’s a lot of close personal attention. The endurance sports world is very different, and so a lot of it enabled by modern technology enables you to use software platforms to develop plans for how to train people. If I have an athlete, the starting point will be for me to figure out in discussion with them what’s their history, what are they trying to achieve, what’s their capacity, and to map out a schedule of training which will take them from where they are now to hopefully a peak performance in the event that they are targeting. Along the way to build in the right kind of increases and the loading on them, and the recovery periods so that they’re not overstressed, they’re just hitting the right kind of level of physical stress, which is increasing over time, so it’s driving up their fitness levels and fitness for purpose without overdoing it.
Stephen: There’s a kind of planning side of it, then there’s another side of it which is collecting data. These days sport is becoming incredibly data focused, and so we’re in a world now where there’s all sorts of wearable technology that can give you a massive amount of information. I’ll be collecting from then, from devices they have things like the amount of power output they have on a bike so I can see what they’re capable of sustaining over time of mapping how their heart rate responds to different loads and whether or not their capacity to operate at a higher level of heart rate is improving or not, and indeed, if they’re sized from heart rate indicators that maybe they’re overdoing it on the other hand.
Stephen: Then there’s sweat rates to determine how much fluid they need take in as nutritional information about what are they doing in terms of helping to ensure that they’re optimizing their internal system to provide the best possible performance. There’s a whole raft of data import that I collect from athletes which comes into the platform that gets mapped against the training that I’ve set for them and I can see then is this helping, is it not helping, do we need to tweak it or not.
Stephen: Then the third leg of it is just direct communication. These are human beings, not machines, and so regardless of what their data is telling you they may be feeling good, they may be feeling bad, they have things going on in their life beyond the training that needs to be taken into consideration. They may be finding certain parts of the training that’s going well or not going well, adjustments need to be made, so I have regular communication with them both through the platform where they can write things, or they can send me messages, but also just regular check-ins by phone or by video conference, things like that, along the way so that there’s this sense of relationship there because it’s a very personal thing that they’re doing. It’s very important to them. You want to feel like you’re really in tune with all aspects of their life in helping them to achieve their goals. It’s quite a process I guess, but it’s also hugely rewarding when somebody really makes progress and achieves a personal goal it’s massively motivating for them and also hugely rewarding for me.
Stephen: It’s the same in that respect in achieving some kind of personal goal in an endurance as actually it can be in an organization by saying I just did this thing and I’ve been trying to do this in the organization for a long time and it’s happened, and you get this huge rush of energy. Again, there’s crossovers in terms of organizational life and personal life in thinking about what you can take from the endurance world into organizations in that respect as well.
Will: We’ve spoken some about habits, what are some habits that you have incorporated in your own life, either a long time ago or recently that have really worked well for you.
Stephen: Well I think one thing I’ve done in my work life, which has really worked well for me, is I’ve looked at my calendar every week and said where do I need to be in the world on any particular day of the week, particularly this is important if you’re traveling a lot and so what adjustments do I need to make in order to ensure that I can get my training down. That might involve instead of flying out early one morning or getting on a train early one morning I would go stay the night before so that next morning I can get up and still get my training in and then do the work of the day. One is just that we can look at an adjustment so that I’m ensuring that my habit of doing my training is not adversely affected more than absolutely necessary.
Stephen: Secondly, as I’ve gotten I guess older I’ve had to think a little bit more about how I build a resilience in my body and also in terms of just mental outlook. I do much more stretching in the form of yoga or other types of stretching activities on a regular basis, like most days. I also do some meditation. I have my ups and downs with that, but I’ve been meditating on and off since I was a teenager. That’s a great mechanism I find for keeping my mind in the right place.
Stephen: Then I think in one of my other strategies in life is that when I’m at my most busiest is when I’m most planful, so when I’ve got a ton of things baring down on me I will sit down and I’ll say, “Okay, number one, let’s break down each of those challenges into small steps so I don’t get overwhelmed by the size of the thing that I’m trying to get to.” Secondly, let’s really map out time in my calendar for those things. When I’ve got the least done I’m the least planful I guess and when I’ve got the most done I’m super planful. Those are a few things that I do.
Stephen: Just one other thing maybe that I’ve found instructive to me many years ago when first time around I was running my own show, I sat down and I thought I should take this opportunity to figure out what’s important to me in life and what really brings me pleasure in life. I drew up a list half expecting I’d half a list of things which were impossibilities. I looked at the list and I saw that’s a very simple set of things which really bring me deep pleasure and satisfaction. I can do any one of them if I want to. It’s just a question of making time for them.
Stephen: That’s carried forward in my life and I guess it’s a simple idea, but for me it was really instructive, so I give attention to my life in terms of am I doing things which I want to do and that bring me satisfaction. If not, then I need to make some adjustments. Along the way I stop and I’m quite reflective about that, and I do some journaling which helps me enjoy writing and so it helps me to work things through and think about them. But I found that a constant reminder to me that I’ve got the opportunity, I’ve been very lucky in life and really when it comes down to it the things that bring me satis fication don’t require huge resources, they just require me to do those things, and reading, making music, things like that, doing sport.
Will: Stephen, where can people go to find out more information about your practice?
Stephen: Thanks for asking. Well, a few places, one is my consulting website, which is redwoodadvisorypartners.com. The other is my triathlon coaching website, which is triendeavors.com. Then of course, there’s all the usual stuff, Linkedin, social media, although I’m super patchy on that, Twitter, pretty much Twitter actually. Instagram I’m really bad on. So really, my websites and to some extent, social media, Linkedin, et cetera.
Will: We’ll include those links in the show notes, redwoodadvisorypartners?
Stephen: Yeah.
Will: … .com and triendeavors.com. I’ll include those links in the show notes.
Stephen: Great.
Will: Stephen, it was great catching up with you and hearing about your work with endurance athletes as well with organizations. Thanks so much for joining today.
Stephen: Thanks Will, always a pleasure talking to you. Thanks for inviting me along.

Related Episodes


Automating Tax Accounting for Solopreneurs

Ran Harpaz


Integrating AI into a 100-year-old Media Business

Salah Zalatimo


Author of Second Act, on The Secrets of Late Bloomers

Henry Oliver


Third Party Risk Management and Cyber Security

Craig Callé