A Beginner’s Guide to Org Design

At The Ready we focus on organization design and the Future of Work. It’s an approach that helps us approach any company, function or team’s OS/Way of Working to help them do the best work of their lives.

Being part of this community is great. Many other enthusiasts share similar ideas and beliefs on how organizations should operate in the 21st century. As a result, a shared vocabulary develops, which is great — but it can also be a frustrating barrier of entry and turn into jargon for others.

As my experience and knowledge of this discipline grew, I kept encountering a common set of words, terms, and quandaries. This article is my attempt to help others get up to speed on the various words and concepts we use to transform the way organizations work. Below is a living list of the key terms needed to understand what is going on.

I will be updating this list over time as I gather feedback and come across more lingo that needs explaining.

1. Agile Squads

Definition: A way to organize people with multiple skill sets and functions around one product or problem.

Real Meaning: Teams that are self-contained, autonomous, and have end-to-end accountability for one sub-Product/Service. Agile squads are the smallest team unit at which work can be accomplished. The range between 7–12 members and should have everything they need to deliver on their mandate.

Example: Spotify popularized the Agile Squad model as part of a wider dynamic org structure that spans Tribes, Chapters, and Guilds.

A Tribe is a collection of Squads that are organized around a specific mission. Tribes are usually designed to have less than 150 members.

Chapters are comprised of functional experts across Squads (for example, there could be a Chapter of UX Designers or a Chapter of Front-End Engineers). This allows a structure for experts in one discipline to come together, share lessons, and offer support to each other.

Guilds, on the other hand, are simply an overall topic that is open to anyone to join. People self select into the Guilds that interest them. New projects, initiatives, and products often emerge from the discussions that happen within the Guilds.

Spotify has done much of the public development of these ideas and the original articles can be found here.

2. Complex Adaptive Systems

Definition: “A complex adaptive system is a collection of relatively similar and partially connected structures formed in order to adapt to the changing environment and increase its survivability as a macro-structure”. — via Wikipedia

Real Meaning: Most people confuse complex and complicated, it wasn’t till Niels Pflaeging pointed it out that I started to make a distinction between them. A complex adaptive system is in a constant state of flux. Inputs can’t predict outputs. Each new interaction reshapes how the system behaves. A complicated system, on the other hand, is contained. It may have many parts but almost any expert can understand with enough certainty how it works.

Example: Traffic is classic case of a complex system in action. You can’t control the specific outcomes nor do you know what’s going to happen next. Small variations, like a vehicle inexplicably slowing down, can cause a long traffic jam that was not predictable. A car’s engine on the other is a complicated system, given enough expertise, you can figure out how the pieces fit together and work

Organizations, particularly large ones, are a good example of complex adaptive systems. However, more often than not, I’ve seen different leaders treat them like complicated machines. Trying to control and manage outcomes and then getting disappointed by the results.

The best teams and organizations out there understand that the best way to stay ahead in today’s world is by operating in a complex adaptive system. That means frequently experimenting, delegating power to the edge, and reducing feedback loops to better adapt. One thing is for sure, certainty and complex adaptive systems do not mix.

3. Future Of Work

Definition: The primary buzzword for describing some future (hopefully better) state of work.

Real Meaning: A 21st century movement to create workplaces that accommodate for exponential technologies, more complexity, and our individual humanity.

It’s a mindset that encompasses many different ideas but often features concepts like AI, workforce automation, collaboration in the workplace, and the principles and practices required for organizations to survive today.

4. Mission-Based Teams

Definition: Mission based teams (MBT) are a cross functional group of committed individuals from across the entire organization, coming together to unlock strategic, urgent, or complex challenges and opportunities.

Real Meaning: A Mission Based Team is self-managing and motivated by the use of growth and their collective skills in pursuit of an organization’s vision. MBT operate according to a team charter under the guidance of and Advisory Board that helps them to navigate iteratively, creatively, innovatively, and quickly toward their mission.

All MBTs forms, fly, and fold according to a team charter that includes the following five components:

Example: Prior to the 1969 Moon landing, NASA spun up Mission Based teams to manage the enormity of the task over several years. Each team had full autonomy over their deliverables and budget. The purpose of this effort was to reduce a lot of the overhead and bureaucracy that was creeping in at the time. With the new strucuture, NASA was hoping that its teams of scientists and engineers could reduce their administrative burden to dedicate as much of their attention to the success of the overall mission.

5. Self-Organization (Self-Org)

Definition: Self-organization is a description of a series of actions that influence a system without being restricted or controlled by the decisions of an encompassing system.

Real Meaning: Self-organizing companies do not have traditional organizational charts or managerial hierarchies. Instead, all members and teams self-manage. Self-organizing companies use specific practices and habits to encourage specific behavior instead of managers (for example, the Governance Meeting in Holacracy is one process for channeling tensions into productive changes in the organization without relying on managers to drive that process).

Example: Two of the most well-known companies doing interesting things with self-management are Morning Star and VALVE.

Morning Star, a tomato processing company, is completely self-organizing. Employees set their own compensation, purchase their own equipment, and manage all the staffing needs of the organization. They’ve even started something called the Self-Management Institute to spread self-organizing principles to other interested people (read more here).

VALVE, a video game company, is also well-known for its self-organizing practices. Employees workstations are all mounted on wheels so that they can “vote with their feet” in terms of deciding what to work on. Decisions about which new projects and products to undertake are not made by managers. Instead, anybody can propose a new project or product and its success is largely determined by whether other people at the company want to work on it. VALVE’s employee handbook is a fascinating glimpse into what working at a self-organizing company is like.

6. Teal Organization

Definition: “Teal organizations focus on their members’ abilities to self-organize and self-manage to achieve the purpose of the organization. The typical hierarchical top-down structure typical is replaced with a self-organizing one consisting of small worker teams that assume all the traditional management functions as well. Positions and job descriptions are replaced with roles, where one worker can fill multiple roles. The organizational structure in Teal is fluid, changing and adapting as circumstances demand to achieve the organization’s purpose.” — from the Reinventing Organizations Wiki

Real Meaning: First introduced by Frederic Laloux in Reinventing Organizations, a Teal organization is the final stage of a five-part framework to name the successive stages of management evolution (RED, AMBER, ORANGE, GREEN, TEAL).

The main characteristics of a Teal organization are:

• An emphasis on the identity and purpose of the organization as a separate entity and not as a vehicle for achieving management objectives.
• Members of a Teal organization self-organize and self-manage to achieve the purpose of the organization.
• Positions and job descriptions are replaced with roles, where one worker can fill multiple roles.
• The organization structure is fluid changing and adapting as circumstances demand to achieve the organization’s purpose.

Example: Teal organizations are run by self-managing teams of 7–15 people per team (on average). Each of these teams consists of workers who each fulfill certain roles — managerial and functional. In his book, Laloux uses the below organizations as successful real-life practitioners of the Teal operating model:

7. Team of Teams

Definition: From The McChrystal Group’s website, “To defeat Al Qaeda in Iraq, McChrystal and his colleagues discarded a century of conventional wisdom and remade the task force, in the midst of a grueling war, into something new: a network that combined transparent communication with decentralized decision-making authority. The walls between silos were torn down. Leaders looked at the best practices of the smallest units and found ways to extend them to thousands of people on three continents, using technology to establish a oneness that would have been impossible even a decade or two earlier. The task force became a “team of teams” — faster, flatter, more flexible — and beat back Al Qaeda.”

Real Meaning: Team of Teams is an operating model that pulls together different teams — and their members, into a seamless network of organization.

In a Team of Teams, decision-making authority is pushed out to each team leader instead of residing only with the very top leadership of an organization. The role of upper leadership changes from one focused on making every decision throughout the organization to a role of providing information and context to each team so that they are all connected to a common purpose and have the best information on which to make their own decisions.

Example: In a Team of Teams, a large number of teams can capture the traits of agility that are normally limited to small teams. See below:

8. Psychological Safety

Definition: According to Amy Edmonson’s work and Google’s Project Aristotle, Psychological safety is one of the key tenents for high performing teams, regardless of size, background, or discipline. Teams with psychological safety feel enough trust to provide feedback and challenge one another in different workplace scenarios.

Real Meaning: Psychological safety is about cultivating a high level of trust for your team to improve the way they work together. In traditional organizations, corporate politics dictate how things should happen whereas organizations that have embraced psychological safety have been able to open up a safe space for anyone to speak up — even if that means disagreeing with your boss.

Example: An extremely simple way to begin building psychological safety into your organization is to start some of your staff meetings with a “check-in” round. It can be any prompt but a common one I use on client projects is “What has your attention?” No discussion or interruptions are allowed. Each person has a chance to briefly speak(2–3 sentences) and be heard by everyone else in the meeting. The question may be answered professionally or personally. This simple process is an easy way to make progress towards a more psychological safe team. Ideally, don’t have the team lead to run this but another team member, or external facilitator.

Ready to change how you work? The Ready helps complex organizations move faster, make better decisions, and master the art of dynamic teaming. Contact us to find out more. While you’re at it, sign up to get our newsletter, Brave New Work Weekly, delivered to your inbox every week.

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Special thanks to Kevin Goldsmith for feedback on Spotify’s Agile Squad definition.