How Organizations Work

About the Author

Alan P. Brache is a partner and executive vice president of the training and consulting firm Kepner-Tregoe, Inc. He is an expert in organizational development and performance improvement. Brache has extensive experience in helping organizations identify and address their operational and strategic challenges. His book "How Organizations Work: Taking a Holistic Approach to Enterprise Health" provides a comprehensive framework for understanding and improving the overall health of an organization.

Main Idea

The main idea of "How Organizations Work" is that organizations must be viewed and managed as holistic systems, where all parts are interconnected. This holistic approach considers various internal and external variables that influence organizational success. By addressing these variables in an integrated manner, managers can achieve sustained organizational health and performance.

Table of Contents

1. The Parts of an Organization
2. Understanding the External Business Environment
3. Leading the Enterprise
4. Creating Strategic Alignment
5. (Re)Designing Business Processes
6. Setting Goals and Measuring Progress
7. Reframing Culture
8. Managing Human Capabilities
9. Leveraging Information and Knowledge
10. Redesigning the Organizational Structure
11. Putting It All Together

The Parts of an Organization

Organizations consist of various interconnected variables: external, structural, human, and combined structural-human. These variables include the external business environment, business processes, goals, information management, organizational structure, leadership, culture, and human capabilities. To achieve organizational wellness, all these parts must work together harmoniously.

"Successful managers of healthy organizations understand that these variables must be treated regularly and holistically to effect change and improve performance." – Alan P. Brache

External Variables

The external business environment encompasses the context in which an organization operates, including the industry value chain, market dynamics, competitors, regulatory landscape, and economic conditions. Understanding these factors is crucial for aligning internal strategies with external opportunities and threats.

"Before focusing on your internal variables, you must first assess and manage these external variables." – Alan P. Brache

Understanding the External Business Environment

Good organizational health starts with understanding the external environment. This includes identifying the industry value chain, current and potential markets, customers' needs, suppliers, and competitors. Monitoring these external factors helps in designing effective strategies and addressing potential threats and opportunities.

"Monitor industry, competitor, technological, legislative, and economic trends to determine future external threats and opportunities." – Alan P. Brache

• Identifying your current and potential markets and customers.
• Assessing your suppliers and their influence on your efficiency.
• Monitoring industry trends to inform strategic decisions.

Leading the Enterprise

Leadership is pivotal in setting the organization's direction and motivating people. Effective leadership aligns with the organization’s strategy, culture, and operational goals. It involves identifying leadership gaps, developing leadership talent, and fostering a motivating environment.

"Leadership is 'first among equals' and required for development and implementation of all the other components." – Alan P. Brache

Addressing Leadership Gaps

• Identifying areas where leadership is most needed.
• Defining current leadership profiles and identifying gaps.
• Establishing clear expectations and consequences for executives.

Creating Strategic Alignment

Strategy involves making choices that determine the nature and direction of an organization. Strategic alignment ensures that the organization’s structure, processes, and resources support its strategic objectives. This alignment requires continuous monitoring and adjustments.