Organization Design,

Diagnostics and
Performance
Class 2
dr. Jean-Malik Dumas, MBA based on work by
Prof. Lorraine Uhlaner
AGENDA-Class 2
1. OHI: The Alignment Cluster
Direction, Culture, Leadership

2. The Apigee Case Part I: Alignment cluster

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The OHI Framework
THE ALIGNMENT CLUSTER

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 “Organization Health”
➢ Includes nine outcomes in three clusters

Direction
Cluster
Coordination Alignment
Accountability
and Control
Execution
External Innovation Renewal
Leadership* and
Orientation
Learning**
*Leadership:
Important in all
Capabilities Motivation 3 clusters

SOURCE: Organizational Health Index

Culture and
climate (Work
Environment)

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 OHI ➢ Each outcome can be evaluated as ailing, able or elite
(See Optional Reading 3: Keller & Price-Exhibit 3.1.)
AILING ABLE ELITE

DIRECTION Creates a strategy that fails to solve the …crafts and communicates a compelling strategy, …and provides purpose, engaging people
tough issues. reinforced by systems and processes. around the vision.

LEADERSHIP Provides excessively detailed instructions Shows care toward subordinates and sensitivity and sets stretch goals and inspires employees
and monitoring (high control) to their needs (high support) to work at their full potential (high challenge)

CULTURE & Lacks a coherent sense of shared values. Creates a baseline of trust within and across …and creates a strong, adaptable
CLIMATE organizational units. organization-wide performance culture.
ACCOUNTABILITY Creates excessive complexity and Creates clear roles and responsibilities; links …and encourages an ownership mindset at all
ambiguous roles. performance and consequences. levels.
COORDINATION & Establishes conflicting and unclear control Aligns goals, targets, and metrics managed …and measures and captures the value from
CONTROL systems and processes. through efficient and effective processes. working collaboratively across organizational
boundaries.
CAPABILITIES …fails to manage talent pipeline or deal …Builds institutional skills required to execute …and builds distinctive capabilities that create
with poor performers. strategy. long-term competitive advantage.
MOTIVATION …Accepts low engagement as the norm. …Motivates through incentive, opportunities and …and taps into employees’ sense of meaning
values. and identity to harness extraordinary effort.

EXTERNAL Directs the energy of the organization Makes creating value for customers the primary and focuses on creating value for all
ORIENTATION inward objective stakeholders
INNOVATION & Lacks structured approaches to harness Able to capture ideas and convert them into value …and able to leverage internal and external
LEARNING employees’ ideas incrementally and through special initiatives networks to maintain a leadership position.
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Lorraine Uhlaner_ Organization diagnostics & performance_W2022
 We start with the Alignment cluster

Direction

Cluster
Alignment

Leadership*

Culture and
Climate

SOURCE: Organizational Health Index

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 Alignment cluster

Direction:

• Do people understand and are they aligned with its

strategy; i.e., where the company is heading and how it
plans to get there?
• The ability of the firm to
create and align its employees Culture and climate (Work environment):
with the same vision
• Does the quality of employee interactions (e.g. Culture)
foster a shared understanding of core values?

Leadership:

• Do leaders at all levels shape and inspire the actions of

employees to drive better performance?

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 AILING ABLE ELITE
DIRECTION Creates a strategy that fails to solve …crafts and communicates a compelling …and provides purpose, engaging
the tough issues. strategy, reinforced by systems and people around the vision.
processes.
LEADERSHIP Provides excessively detailed Shows care toward subordinates and and sets stretch goals and inspires
instructions and monitoring (high sensitivity to their needs (high support) employees to work at their full
control) potential (high challenge)
CULTURE & Lacks a coherent sense of shared Creates a baseline of trust within and …and creates a strong, adaptable
CLIMATE values. across organizational units. organization-wide performance
culture.
ACCOUNTABILITY Creates excessive complexity and Creates clear roles and responsibilities; …and encourages an ownership
ambiguous roles. links performance and consequences. mindset at all levels.
COORDINATION Establishes conflicting and unclear Aligns goals, targets, and metrics …and measures and captures the
& CONTROL control systems and processes. managed through efficient and effective value from working collaboratively
processes. across organizational boundaries.
CAPABILITIES …fails to manage talent pipeline or …Builds institutional skills required to …and builds distinctive capabilities
deal with poor performers. execute strategy. that create long-term competitive
advantage.
MOTIVATION …Accepts low engagement as the …Motivates through incentive, …and taps into employees’ sense of
norm. opportunities and values. meaning and identity to harness
extraordinary effort.
EXTERNAL Directs the energy of the Makes creating value for customers the and focuses on creating value for all
ORIENTATION organization inward primary objective stakeholders
INNOVATION & Lacks structured approaches to Able to capture ideas and convert them …and able to leverage internal and
LEARNING harness employees’ ideas into value incrementally and through external networks to maintain a
special initiatives leadership position.
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 The “Direction” outcome
• Defined: People understand and are
aligned with where the company is
heading and how to get there.
• Ailing: …creates a strategy that fails to
solve the tough issues.
• Able: …crafts and communicates a
compelling strategy, reinforced by
systems and processes.
• Elite: …and provides purpose, engaging
people around the vision.

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 Each group or set of practices may influence the
‘health’ of a particular outcome

Culture & Coordination External Innovation &

Direction Leadership Accountability Capability Motivation
climate and control orientation learning

People
Open and Talent Meaningful Customer Top-down
Shared vision Authoritative Role clarity performance
trusting acquisition values focus innovation
review

Strategic Internally Performance Operational Talent Inspirational Competitive Bottom-up

Consultative
clarity competitive contracts management development leaders insights innovation

Process-
Employee Operationally Consequence Financial Career Business Knowledge
Supportive based
involvement disciplined management management opportunities partnership sharing
capabilities

Creative and Government Capturing

Personal Professional Outsourced Financial
Challenging entre- & community external
ownership standards expertise incentives
preneurial relations ideas

Risk Rewards and

management Recognition

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 The 3 direction practices

Employee
Shared vision Strategic clarity
involvement
Setting the
Articulating a clear Engaging employees
direction by
direction and in dialogue on the
creating and
strategy for winning direction of the
communicating a
and translating it organization and
compelling, vivid
into specific goals discussing their part
image of what the
and targets. in making it happen.
future will be like.

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 The Culture & climate outcome

• Defined: The shared beliefs and quality of

interactions within and across organizational
units.
• Ailing: Lacks a coherent sense of shared
values.
• Able: Creates a baseline of trust within
and across organizational units.
• Elite: …and creates a strong, adaptable
organization-wide performance culture.

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 The 4 culture & climate practices
Open and Internally Operationally Creative and
trusting competitive disciplined entrepreneurial

Emphasizing
Fostering clear
results and
behavioral and
Encouraging achievement,
performance Supporting
honesty, with healthy
standards with innovation,
transparency, sense of
close creativity, and
and open internal
monitoring of initiative taking.
dialogue competition to
adherence to
drive
those standards
performance

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 14

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Organizational culture

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Organizational culture

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Schein---levels

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Definition organizational
culture
“a system of shared meaning held by
members that distinguishes the
organization from other organizations”
(Robbins & Judge)

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Values
Basic convictions that: “a specific mode of conduct or end-
state of existence that is personally or socially preferable
to an opposite or converse mode of conduct or end-state”
(Robbins)

Contains 2 elements:
A judgmental element--- what is right, good or desirable?
An intensity attribute: How important is it?

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 Values

Individual values:
• For instance:
• Freedom
• Self respect

Values within the organization:

• For instance:
• Being team oriented
• Being competitive
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Norms
“Acceptable standards of behavior that are
shared by the group’s members”

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 Strong and weak cultures

Strong organizational culture Weak organizational culture

Core values shared by most Core values are hardly shared or
members existent
High behavioral control Low behavioral control
Should reduce turnover Probably more turnover (depends
on preference of employees)
High agreement about what the Less agreement about what the
organization represents organization represents
Higher sense of identity with the Lower sense of identity with the
organization organization
Less Flexible More flexible
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What do organizational
cultures do?
Boundary-defining role
Creates sense of identity
Facilitates commitment
Enhances stability
Sense-making and control
But also:
Might induce institutionalization
Might be a barrier to change
Might be a barrier to diversity
Might be a barrier to M&A’s
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Organizational climate

“Theshared perceptions organizational members have

about their organization and work environment” (Robbins
& Judge)

Difficult to distinguish from organizational culture but the

general consensus seems to be that organizational
climate is a concept that deals with more direct observable
issues is relatively temporary and subject to direct control.
(Denison, 1996) Outsiders

Visible Organizational climate

Organizational culture
Shared values

Basic assumptions Insiders

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Organizational culture: How do you
create it and can it be sustained?
Founders create
Hire
Indoctrinate and socialize
Encourage to identify
Sustaining
Selection
Top management
Socialization
Onboarding

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Socialization process

Outcomes
Productivity

Pre-arrival Encounter Metamorphosis Commitment

Turnover

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How can you learn the organizational culture
as an employee?
Stories
Rituals
Material symbols
Language
Observing
How can you get promoted?
What behavior/attitude is frowned upon?
Who has a lot of influence on the procedures?
Who has a lot of influence on the policy?
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 How does culture determines
performance?
- lack of flexibility
+ better goals alignment
+ motivation (identification)
+ reinforcing characteristices needed in an
industry
+ reinforces learning &/or -limits it
+ creates common ground – known routines
- resistance to change
- may reinforce bad behavior (9-5 mentality)
- may reduce autonomy
+ brings coherence
- may limit innovation
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JM Dumas - Organization design, diagnostics & performance
 The Leadership outcome

• Defined: the extent to which leaders

inspire actions by others.
• Ailing: Provides excessively
detailed instructions and
monitoring (high control)
• Able: Shows care toward
subordinates and sensitivity to
their needs (high support)
• Elite: and sets stretch goals and
inspires employees to work at
their full potential (high
challenge)
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JM Dumas - Organization design, diagnostics & performance
 The 4 leadership practices

Authoritative Consultative Supportive Challenging

leadership leadership leadership leadership
Building a
Involving and positive Encouraging
Emphasizing empowering environment employees to
hierarchy and employees characterized by take on tough
managerial through team harmony, challenges and
pressure to get communication, support, and do more than
things done. consultation, care for they thought
and delegation. employees’ possible.
welfare.

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Apigee: In-class assignment
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 Apigee Case: Part 1-Alignment
Cluster

1. How does Apigee address the different outcomes below? Which specific
practices can you identify related to these three outcomes? (Support
your claims referring to specific facts or quotes from the case).

2. Would you argue that Apigee’s approach to direction, leadership, or

culture is ailing, able, or elite? (support your claim by referring to specific
facts or quotes from the case).

Teams
Start with Direction Teams 1 to 4
Start with Leadership Teams 5 to 7
Start with Culture Team 8 to 11

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 Element Practice Description
Direction 1. Shared vision Setting the direction by creating and communication a compelling, vivid image
of what the future will look like
2. Strategic clarity Articulating a clear direction and strategy for winning and translating it into
specific goals and target
3. Employee involvement Engaging employees in dialogue on the direction of the organizationand
discussing their part in making it happen
Leadership 4. Authoritative leadership Emphasizing hierarchy and managerial pressure to get things done
5. Consultative leadership Involving and empowering employees through communication, consultation,
and delegation
6. Supportive leadership Building a positive environment characterized by team harmony, support, and
care for their employees’ welfare
7. Challenging leadership Encouraging employees to take on tough challenges and do more than thought
possible
Culture and 8. Open and trusting Encouraging honesty, transparency, and open dialogue
climate (Work
Environment)
9. Internally competitive Emphasizing results and achievement with a healthy sense of internal
competition to drive performance

10. Operationally disciplined Fostering clear behavioral and performance standards with close monitoring od
adherence to those standards
11. Creative and entrepreneurial Supporting innovation, creativity, and initiative taking

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DISCUSSION OF Apigee Case: Part 1
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 Discussion of Apigee Case:
Part 1: Alignment Cluster

1. How does your assigned case address the outcomes of direction,

leadership, and culture? Which specific practices can you identify
related to these three outcomes?

2. Would you argue that the Apigee approach to direction, leadership,

and culture as ailing, able, or elite? (support your claim from facts of
the article).

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 Preparing for Class 3

Readings:
R4: Dewhurst et al
R5: Keller/Meaney
R6: Simons

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 Written Asst. 1-Due Class 5
Tuesday, January 28th 22:00
• Complete the analysis of Apigee for all nine outcomes.
• Alignment cluster (leadership, direction, and culture)
• Execution cluster (motivation, capabilities, coordination and control, and
accountability).
• Renewal cluster (External orientation, Innovation, and learning)
• For each outcome:
• Describe which practices stand out most clearly in the case. Include quotes from the
case to support your claims.
• How would you describe the firm’s health for each outcome (ailing, able, elite), (and
justify your position)?
• Which practices do you think are weakest? Based on your analysis, what
recommendations might you make to improve Apigee’s performance?

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