Organization design is often discussed when delivery slows, decisions stall or customers keep encountering the same problem. A new reporting structure can clarify who is responsible. It cannot, on its own, ensure that the right information reaches that person or that teams can change the work causing the problem.
Leaders considering a reorganization need to make a more precise choice: does the organization need different authority, different connections across teams, or both? A living-system view is useful because it draws attention to relationships and feedback as well as formal roles. It is not a claim that a company is an organism that will adapt without direction. Leaders still set purposes, allocate resources and decide who may act.
What the chart does not show
Consider a hypothetical grocery retailer whose online customers regularly reject the substitutes offered for unavailable items. Store staff choose from approved alternatives, customer service handles complaints, and merchandising sets the substitution rules. Leaders consider putting store fulfillment and customer service under one executive to improve the response.
That change could give complaints a clearer owner. But it would not necessarily tell merchandising which approved substitutes customers find unsuitable. Nor would it resolve a store target that rewards quick picking while giving staff little time to judge an alternative. The same failure could persist under the new executive because the route from customer experience to a changed rule or practice remains broken.
Donella Meadows, in Thinking in Systems: A Primer, treats information, feedback and rules as potential places to intervene in a system. The application here is straightforward: locate where the evidence appears, who can change the practice behind it and whether that person can see the result. A complaint total may reveal a problem without showing whether its cause is a poor rule, missing stock or a promise the retailer cannot reliably meet.
Jay R. Galbraith’s information-processing account of organization design adds a useful distinction. Rules and escalation can handle some work, while uncertain exceptions may require direct contact across boundaries. If every unusual substitution must travel up several management chains, people with the relevant knowledge may not resolve it in time. Direct contact is not automatically better, however. It takes capacity and should serve a defined decision, not become another standing meeting.
The issue is not whether the retailer has an informal network. People will find ways to get work done. The design question is whether a necessary connection depends on individual favors and workarounds, or whether the organization gives the right people a dependable way to share evidence and act on it.
Design the route from evidence to action
The proposed Living Organization Design Canvas is an OutcomesLab aid for working through that question. Its fields are outcomes, relationships, flows, feedback, constraints, authority and renewal mechanisms. Used selectively, it helps leaders turn a recurring dependency into an explicit design choice.
Start with the outcome the redesign is meant to improve. For the retailer, closing complaints faster is worthwhile, but the larger aim is to offer substitutes customers can use. That distinction changes who needs to be involved. Customer service knows why people complain; store staff know what choices are available when they fill an order; merchandising can alter the approved alternatives. Bringing service and stores under one executive may help them settle individual cases, but the retailer also needs a working connection to the team that governs the rules.
Next, specify what must cross that connection. Service might record a simple reason when a customer rejects a substitute, while stores flag occasions when none of the approved alternatives fits. Merchandising could use recurring examples to decide whether a rule needs changing, then tell stores and service what changed. The aim is not to collect every possible detail. It is to provide enough usable evidence for a decision and a way to check its effect.
Authority must be just as clear as the information route. Store staff could retain discretion among approved alternatives; a named owner could approve changes to the list. Decisions with material safety implications would follow the retailer’s required approval route rather than be delegated through a general call for flexibility. That boundary lets people respond locally without making accountability ambiguous.
Finally, leaders need a review that can change the arrangement. They could compare customer acceptance and complaints with stock availability and store workload. If customers reject fewer substitutes only because stores offer none, the outcome has not improved. If better rules make little difference because suitable items are rarely in stock, the next decision concerns inventory or the customer promise, not another handoff. A feedback loop is useful only when its findings can prompt action.
This is also a test of Coherence Premium: the superior performance generated when strategy, resources, capabilities, operating model and decisions consistently reinforce one another. The retailer cannot expect a better customer experience from a faster information route if its store measures and stock choices continue to undermine that experience. The design choices need to work together, though different teams will still have different responsibilities.
When the answer is authority—or something other than design
Tracing a failure across teams should not lead automatically to more collaboration. If two executives can block a change to the substitution rules and neither owns the final decision, clearer authority may be the priority. A revised reporting line could help if it gives one accountable leader the ability to settle that conflict. If ownership is already clear but the owner never receives usable evidence, moving the boxes is less likely to help.
Some problems sit further outside the chart. If the retailer cannot stock the range it promises, more contact between teams will not make that promise deliverable. If store staff lack the time or skill to choose a suitable alternative, another reporting requirement may add work without improving the choice. Leaders may need to change the promise, provide capacity or redesign the task itself. The distinction matters because an organization can appear poorly coordinated when it is actually asking people to deliver an outcome its resources cannot support.
Research on work design offers a reason to examine tasks and authority together. In their historical study of mechanized coal mining, E. L. Trist and K. W. Bamforth described how the way work was organized affected the handling of interdependent tasks and disruptions. A mine’s arrangements are not a template for a retailer. The transferable question is narrower: when the work changes, have the connections and decisions needed to coordinate it changed too?
Formal hierarchy has strengths that a living-system analogy must not obscure. It can make escalation and accountability clear, particularly where a decision has significant consequences. It can also prevent every exception from becoming a negotiation among peers. The point is to use hierarchy for decisions that require it while avoiding unnecessary escalation of problems that people with relevant information and bounded authority could resolve directly.
Fritjof Capra and Pier Luigi Luisi’s The Systems View of Life: A Unifying Vision provides a broader account of why relationships matter to a system’s behavior. Its living-systems perspective offers an analogy, not evidence that a particular business design will perform better. People in organizations can disagree about goals, create rules and exercise power. A leader must therefore ask whose outcome a design serves, who pays for coordination and who has the authority to change course. Interdependence does not remove those choices; it makes them more visible.
A design should also be able to change as the evidence changes. Optionality means deliberately preserving credible future choices without diluting commitment to current strategic priorities. For the retailer, that might mean authorizing a bounded trial of different approved substitutes in one part of the business before changing a company-wide rule. The trial is useful only if someone can judge the evidence, adopt a better approach or stop the test. Keeping every arrangement provisional would weaken, not strengthen, accountability.
Before approving a reorganization, leaders should follow one important failure from the point where it becomes visible to the decision that could prevent it recurring. If that decision has no clear owner, change the authority. If the owner lacks evidence or a workable connection to other teams, change the flow and feedback. If the promised outcome exceeds the organization’s capability or resources, address that constraint directly. A better chart matters when it changes how people can deliver and learn—not merely where an unresolved problem is reported.