Week 2 post by Andrew

This week’s readings present a variety of approaches to organizational design, with proper regard given to strategy, structure, processes, rewards and people – together known as the Star Model as outlined by Galbraith (2011), as well as managing talent and information and decision-making processes, among other concepts delineated by Worley & Lawler (2006).

When considering organizational design approaches in the real world, I found inspiration in an unlikely source: professional hockey general managers. Mike Colligan, a contributor to Forbes.com, recently interviewed Jason Farris, author of “Behind the Moves: NHL General Managers Tell How Winners Are Built” and outlined a variety of different approaches used by these general managers in the pursuit of the ultimate goal: the Stanley Cup.

It should, of course, be stated that professional hockey franchises are different from many other industries: the teams need one another for the ultimate success of the business of hockey, and with the advent of salary caps and shared television-rights funding, there is more of a level playing field when it comes to funding than in typical businesses.

What makes hockey a valid study in organizational design is that when many other resources are equal, how a general manager chooses to run his organization can be isolated as a primary factor in the franchise’s success. Let us consider newly-appointed Montreal Canadiens general manager Marc Bergevin, at the helm of one of the league’s most storied franchises.

As Colligan explains, “Controlling the flow of information and using it to drive internal decision-making is critical to success, but no optimal method exists that automatically translates into Stanley Cups.”

Worley & Lawler (2006) use a near-identical conceptualization of a manager’s responsibilities regarding information and decision-making: “to ensure good decision making, information needs to be transparent and up-to-date, indicating the current condition of the organization’s capabilities and providing a clear view of how the company is performing relative to its competitors and its strategy” (p. 22).

In hockey, Worley & Lawler’s idea would relate most closely to hockey operations and scouting, as a general manager’s most important job is to select players that will fit into the team’s philosophy, decisions he must make based on the information and recommendations provided by his team of experts.

Bergevin is faced with a challenge similar to leaders in other industries: how to best organize his staff. In the article, he is quoted as saying “I’m not scared of things I don’t know because I’m going to make sure I surround myself with the people who can help me make the right decisions” (Colligan, 2012). This would indicate he favors a network approach, where the informal organizational structure is ever-changing and “dependent on actions taken by people through mobilizing personal ties, that the only organizational structure that has reality for people is an informal one” (Lorsch, p. 9).

The other option for Bergevin is to organize his group of scouts and hockey operations professionals into silos, a philosophy advocated by Lou Lamoriello, GM of the New Jersey Devils. Lamoriello, Colligan explains, develops an environment where each scout develops information for Lamoriello’s use and his alone, creating an environment that favors quality knowledge over cooperation. While this more formally-structured approach may not win Lamoriello many friends – inside or outside of his organization – it does win hockey games, Colligan points out, as the Devils have been a playoff team 14 of the last 15 years, as well as this year’s Eastern Conference champions.

So how best to organize the off-ice team around you? Marc Bergevin must tackle this issue this summer – some of the league’s most passionate fans, not to mention the stewards of the league’s third-most valuable franchise, are waiting.

References:

Colligan, M. (2012, May 25). What Makes A Successful NHL General Manager? New Book Takes A Look. Forbes. Retrieved from http://www.forbes.com

Galbraith, J. (2002). Designing Organizations. San Francisco, CA: Jossey-Bass Publishers.

Galbraith, J. (2011). The Star Model. 1-6.

Lorsch, W. (1975). Note on organizational design. Harvard Educational Review, 1-21.

Worley, C. & Lawler, E. (2006). Designing organizations that are built for change. MIT Sloan Management Review, 48(1), 18-23.