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Organizational Design

Organizational design is the process of structuring an organization in a way that optimizes efficiency and effectiveness to achieve its strategic objectives. This includes defining roles, responsibilities, reporting relationships, and workflows to support the organization’s goals. Organizational design often involves creating or restructuring teams, departments, or entire organizational hierarchies to ensure that the organization operates smoothly and can adapt to changes.

Organizational Design and Capacity Planning

🧱Organizational Design involves structuring the organization to optimize efficiency and effectiveness in achieving strategic goals. The most common outputs are org charts with supplementary role descriptions.

🧩Capacity Planning ensures that the organization has the right number of people with the right skills available at the right time to meet workload demands. This typically translates to specific staffing plans for hiring additional headcounts where necessary.

While the two are connected, organizational design determines the structure within which capacity planning takes place.

Recommended Resources

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Two-Pizza Teams Are Just the Start (Part 1 & Part 2): Tom Godden published this two-parter for Amazon’s Web Services division on structuring teams that are able to innovate quickly, bring new ideas to market faster, and deploy advanced technology solutions in less time. He also describes the concept of Single-Threaded Leaders and how accountability, autonomy, and trust can be encouraged through organizational design. (15 min read)

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How Many People Can Someone Lead: Pat Kua offers his take on the classic question of “span of command” and how many people a manager can lead effectively. Leaving the “magic number range” aside, the questions and organizational differences Pat mentions are what you want to focus on. What’s the job’s scope, leadership and team experience level, and organizational bureaucracy in your context like? Let the answers to these questions inform your organizational design. (6 min read)

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Failed #SquadGoals: In the early 2010s, the Spotify Model spread like a virus across global tech companies. The model essentially rebrands Matrix organizations with new labels such as squads, guilds, and tribes. Countless companies thoughtlessly copied this flavor of the month. Jeremiah Lee offers an insightful read on the phenomenon and how Spotify actually never fully implemented the aspirational model. (10 min read)

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Scaling Pipedrive Engineering — From Teams to Tribes: Sergei Anikin recounts how Pipedrive grew from startup to a scaleup evolving its Research & Development. It’s unlikely you are experiencing the exact same challenges, and copying Pipedrive’s org design will not solve all of them. However, Sergei’s thoughtful approach and crisp writing should give you some ideas of how to approach your own org design challenges. (7 min read)

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Conway’s Law: Martin Fowler offers a brief, technical summary and personal take on Conway’s Law. Conway argued that organizations will, without fail, design systems that mirror their communication structure. Nowadays, it’s often summarized as “companies can’t help but ship their org chart”. (6 min read)

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Conway’s Law Doesn’t Apply to Rigid Designs: In the technology space, the book Team Topologies is a popular read among Engineering leaders. Conway’s Law is a cornerstone of the book and so is the “Reverse Conway Maneuver”. According to the maneuver, an organization can change its structure to achieve a desired system design. Mathias Verraes explores why executing this play (or any other reorg effort) may not be enough to fix a broken system design. (8 min read)

💰 Manager Tools released a three-parter on How To Structure An Organization as part of their Executive Tools podcast. I have linked it without covering it in detail as it requires a paid license. It’s one of the few high-quality resources that covers designing an org from start to end though, so please do consider it if you’re looking for an extensive step-by-step guide.