This is a post is in the Useful Ideas series.

This is a framework to guide organizational design decisions, based on three directions: inside-out, outside-in, and upwards. Most of us tend to primarily consider one of these directions, so this framework helps us to evaluate the other directions, as well.

As you evaluate these factors, there will be tradeoffs to make, but considering each of these directions helps you to make informed tradeoffs and to mitigate the downsides of your approach.

For each direction, I’ll give a brief glimpse of an org design that highly prioritizes that perspective often at the expense of the other perspectives.

Note: I believe these principles are relevant to many types of organizations. However, I chose to use consistent and simplified language where possible. So, when you see “customers”, for example, you may need to mentally substitute this with “stakeholders”, “boundary partners”, “constituents”, “members”, “clients” or whatever is the appropriate term for the type of organization you are designing. Do this for other terms, as well.

Inside-Out: Delivery

The inside-out direction focuses on how a team is aligned for delivery. It considers questions such as:

  • Is it easy to get quality output & results through the system?
  • Have we limited dependencies so that there are reduced handoffs and waiting?
  • Do we have all the needed skills and competencies within the team?
  • Are roles and responsibilities clear?

Extreme example: the team is fully self-contained and has a highly-structured production line.

The inside-out direction is about creating a structure that supports the execution of the strategy and the delivery of value to the customers.

Outside-In: Customers

The outside-in direction focuses on how customers engage with the organization. It considers questions such as:

  • Is it easy for customers to get support?
  • Do customers know where to go for support, and are there limited places to go?
  • Are we building rapport and trust with customers?
  • Are we aligned to anticipate and respond to customer needs and expectations?

Extreme example: each customer has a personal ambassador to the organization who is fully equipped and empowered to address the customer’s needs.

The outside-in direction is about creating a customer-centric culture and a customer-oriented structure.

Upwards: Expertise

The upwards direction focuses on how team members gain domain knowledge, skill, and ability to troubleshoot. It considers questions such as:

  • Do people responsible for delivery get significant exposure to problems?
  • …and are they incentivized to understand and solve them?
  • Do team members get practice & timely feedback that hones their skill & knowledge?
  • Are we helping people become adept at their craft and greater in wisdom?

Extreme example: for every offering, team member(s) are responsible for the complete lifecycle from initial design to ongoing support.

The upwards direction is about creating a growth-oriented culture and a people-oriented structure.

Summary

Each direction represents a different perspective on how to align the structure, roles, and competencies of the organization with its strategy, culture, environment, customers, and people. The framework helps to evaluate the tradeoffs and benefits of each direction, and to create a balanced and effective organization.