What's Best Next

  • Newsletter
  • Our Mission
  • Contact
  • Resources
    • Productivity
    • Leadership
    • Management
    • Web Strategy
    • Book Extras
  • Consulting & Training
  • Store
    • Online Store
    • Cart
    • My Account
  • About
    • Our Mission
    • Our Core Values
    • Our Approach to Productivity
    • Our Team
    • Contact

The Root of Making Good Decisions

October 27, 2008 by Matt Perman

There are lots of different formal and informal approaches to making decisions. But at the end of the day making a good decision comes down to one thing: Knowing the fundamental governing principles of the area. Usually there is just one.

For example, as I posted earlier today, with the economic policy of a nation, the governing principle is to maximize people’s freedom to the greatest extent while preserving the rule of law. In deciding where to work, the guiding principle is: where can I have the greatest impact with the gifts I’ve been given? In managing an organization, the guiding principle is to make employees’ strengths productive for the performance of the organization while minimizing weaknesses.

Once you understand the governing principles of an area, most decisions fall into line. More on this in the days and months to come.

Filed Under: Decision Making

Good Resources on Decision-Making

October 24, 2008 by Matt Perman

The Mind Tools website is filled with great resources for excelling in your career. Their section on decision-making summarizes lots of helpful tools for making decisions, such as grid analysis for selecting between good options and PMI (pluses, minuses, implications) for weighing the pros and cons of a decision.

Filed Under: Decision Making

How to Get the Mail

October 16, 2008 by Matt Perman

Here’s one of the most basic productivity functions of all, and yet probably most of us never think about how we do it: Getting the mail.

I actually have to go get the mail right now. Why don’t I go do that, and then I’ll come back and summarize how I go through it.

Processing the Mail is the Same as Processing Your In-Box

OK, here we go. First, I’d normally actually just put it in my in-box, since it’s the middle of the afternoon, and process it the next time I process my in-box. And that’s the first point: The mail is just another form of input to be processed along with every other form of input you get. So in one sense I could stop this post right now, because getting the mail really reduces to processing your in-box. But, I will continue.

The Three Rules of Processing Stuff

Second, I go through the items one by one (very quickly). Looks like I have about 15 items. David Allen gives the three cardinal rules of processing, which apply here:

  1. Process the top item first
  2. Process one item at a time
  3. Never put anything back into in

The Two Questions when Processing Anything

Third, with each item I ask myself two questions: What is this? and What’s the next action? This is because before you can know what to do with something, you need to know what it is. Once you know what it is, you can determine how to handle it (that is, define the next action).

When No Action is Required

With most stuff, this is easy and takes about 0.25 seconds. Some things have no actions required. For example, an item of junk mail gets trashed.

Handling Quick Actions: The Two Minute Rule

Some things involve very quick actions. With these I apply David Allen’s “two minute rule”: if you can do it in two minutes or less, do it right away. So a newsletter or such from an organization I give to gets a quick look, for example, and then I toss it (or determine the larger action required by it and process it accordingly).

Handling Longer than Two Minute Actions

Then there are some things that involve more than 2 minutes of action. I have something in this category before me right now: the statement for my money market account. I have actually noticed that 90% of my 2-minute plus actions that come up fall into 1 of 6 categories. I’ve set up a group of pending files for these: bills to pay, notes to process, receipts to enter, other financial to enter, to read, and to file. This one falls into the “other financial to enter” category—I need to reconcile this with my Quicken–, so I put it in that file. (I go through those files every Saturday, by the way—I wouldn’t put anything in an action file without a regularly scheduled task to actual dispense of those actions. I put these regularly scheduled actions on my “action calendar,” which I’ll talk about down the road)

Now I have before me two post cards that the grandparents sent to our kids (ages 5 and 3) while they were on their trip to DC. I put these to my right in a temporary “out” pile, which is where I put stuff that I need to give to my wife or kids or take somewhere else in the house.

The next item is my 2009 vehicle tabs. Here I have two things to do: The stickers themselves go in my “out” box, and I will put them on my car when I take that stuff to where it goes. But I also want to keep the registration card that came with them, so I put that in my “to file” pile.

The next item is something from Dish Network saying I have to upgrade my DVR with these new smart cards they’ve sent, or it will stop working in two weeks. Good grief. This is why life is so complicated and we need productivity systems in the first place.

Now I have my IRA statement. There is a newsletter with an article on “what you need to know about bear markets,” which I’ll give 10 seconds to. There is also an update to the “custodial agreement” (whatever that is). In previous years I probably would have filed that with my IRA stuff, but I’m getting tired of the information glut, so I’m just going to throw that away. I put the actual statement into my “other financial to enter” file.

Now I have my mortgage statement. We’re not on automatic withdrawal because we plan on moving soon and I wanted to save the time of setting that up. Not sure if that actually saved me time, but oh well. I put the bottom portion in my “bills to pay” file and the actual statement in my “to file” pile.

There are a few magazines that I put in my “to read file,” and now I’m done. Now what I’m going to do is quickly take my “out” stuff where it goes (put the post cards for our kids in my wife’s in box, the tabs on the car, and that smart card in my DVR), file my “to file” stuff, and get on with my day. On Saturday morning I’ll clear out the two minute plus actions that I put into my “other financial to enter” and “bills to pay” files.

Nothing this time involved a project (a more-than-two-action outcome) or had to go on my next action list. Down the road I’ll be posting some about those lists and how to use them effectively.

Filed Under: Workflow

Forward-Thinking Leadership

October 15, 2008 by Matt Perman

I was at the Catalyst 2008 conference at the end of last week. The speakers included some top-notch business thinkers, including Jim Collins, Seth Godin, and Tim Sanders. Andy Stanley gave a very useful talk based around five really intriguing quotes. Here are a few of them:

“What do I believe is impossible to do in my field…but if it could be done would fundamentally change my business?”

“If we got kicked out and the board brought in a new CEO, what would he do? Why shouldn’t we walk out the door, come back in, and do it ourselves?”

“When your memories exceed your dreams, the end is near.”

Here’s what I like about these quotes: They focus not only on doing existing things better, but on doing new things altogether. We need more people thinking along these lines.

Filed Under: 3 - Leadership

What This Blog is About, Part 2

October 15, 2008 by Matt Perman

There are a lot of blogs on productivity. So why start another one?

This comes down to the question of the angle this blog will take. There are a lot of great productivity blogs out there. Lifehacker hits productivity from the technological angle, Merlin Mann at 43 Folders writes about how to find the time and attention to do your best creative work, and Timothy Ferris writes about experiments in lifestyle design. So what’s my angle?

The most basic answer is that I am looking at productivity through the lens of decision-making. Being productive and effective is about making good decisions. Your calendar and projects list, if you have them, are ultimately decision-making tools.

The angle of this blog is also unique in the way it will try to tie together some divergent themes that nonetheless need to go together. Here are the things I want to tie together in this blog:

  1. Personal productivity and organizational productivity.
  2. The runway and the 50,000 foot level.
  3. Sound thinking and helpful action.
  4. The past and the future.

Tying Together Personal Productivity and Organizational Productivity

This is what I talked about in part 1 of this article and in my post “Broadening the Concept of Productivity.” In sum, I think productivity is not just about making ourselves more effective, but about knowing what will make our organizations and communities and society more effective. So I’m going to talk about not only how we can be more productive as individuals, but also how our organizations and communities can be more effective as well.

Tying Together the Runway and the 50,000 Foot Level

Here’s my productivity journey in a nutshell: David Allen’s Getting Things Done opens up a whole new world. Yet there are a few “snags” that I think the system has (which can be overcome). One of the snags is that GTD is great at the runway and 10,000 foot level (projects), but is less developed at the 20,000 foot and above level (roles, goals, and mission).

Stephen Covey’s books The 7 Habits of Highly Effective People and First Things First, on the other hand, are superb at the 20,000 foot and above level. Yet they are weak in laying out a workable system for translating those plans into action at the project and next action levels.

What is needed is a productivity approach that synthesizes the best of Allen and Covey. I think I’ve done this for my own productivity system that I’ve built for managing my own life, and will be blogging a lot on how these two perspectives fit together. The result is a system of thinking that successfully ties the big picture (20,000 foot and above) to the every day (the runway of next actions and 10,000 foot level of projects).

Tying Together Sound Thinking and Helpful Action

In one sense it’s a bit odd that I’ve named this blog What’s Best Next, because that sounds almost like all I care about is what we do, when in reality I am a firmly believer of the primacy of thought. Not as a replacement for action, but as the director and leader of what we actually do. I think we make the best decisions on what to do when we understand the guiding principles of an area.

This is in now way, in no way, to say that thought alone is sufficient. It is to say that the most effective actions stem ultimately from the way we think, and if you approach anything piecemeal, you are unlikely to get good results. I love this quote from Roger Martin’s book The Opposable Mind: “Instead of attempting to learn from observing the actions of leaders, I prefer to swim upstream to the antecedent of doing: thinking. My critical question is not what various leaders did, but how their cognitive processes produced their actions” (The Opposable Mind, p. 19). Great thinking is the seedbed of great actions. This blog is about what’s best next, not just what’s next.

Tying Together the Past and the Future

And of course this blog is not only about what’s best next, but also what’s best next. We are looking ahead—both far off to what are the most productive actions for the long-term, as well as how to make the best decision about what to literally do next.

I love how Jim Collins relates that when he would ask Peter Drucker what the favorite book he wrote was, Drucker would always say “the next one.” That’s how I think: the best things are always to come. And knowing what’s best next requires knowing what came before. We have a ton to learn from the past. I want to think of what’s best, next, in the context of the whole.

Filed Under: 1 - Productivity

Broadening the Concept of Productivity

October 15, 2008 by Matt Perman

A lot of the advice I read on starting a blog said to narrow your topic as much as possible. That is good advice. But in one sense I’ve chosen to do the reverse.

I think we need to broaden the concept of productivity. Instead of thinking mainly in terms of making ourselves productive, we also need to think in terms of making our organizations and society more effective. This is really one of the ultimate goals, and most exciting things. The goal of personal productivity does not terminate on yourself, but is a means to being a useful person who makes the world a better place.

Hence, I define productivity as not only making yourself more effective, but making others more effective—our organizations, our communities, and our society.

Filed Under: 1 - Productivity

What This Blog is About, Part 1

October 14, 2008 by Matt Perman

This blog is about two things: (1) how to best manage our lives and work and (2) how to best think about the way that the businesses and non-profits that we work for should be run. I guess we can call these two things “personal productivity” and “organizational productivity.”

Personal Productivity

Originally I wanted to start this blog 4 years ago and focus on personal productivity. I had read David Allen’s Getting Things Done and put together a planning system to help me keep on top of my goals, projects, and next actions, and wanted to blog about that. I also found that the concepts for organizing time and tasks easily expanded into best practices for managing space, such as your desk or garage or kitchen. I thought that it would be pretty fun and helpful to blog on how to manage your time, projects, and space—basically, your life. But of course…I never had the time.

Organizational Productivity

Now it’s 4 years later and I’ve been doing a lot of reading on and gaining experience about managing organizations. I read about 50-100 books a year, and for the last couple of years business and management (“organizational productivity”) have been my major focus. I think Peter Drucker is right that the greatest challenge of this century is to make knowledge work productive. Most of us are knowledge workers these days, yet most organizations are not managing knowledge workers effectively. They are using practices from the industrial economy to manage the knowledge economy. The result is incredible loss of potential (the authors of Mobilizing Minds estimate this in the hundreds of billions of dollars) and, worse, the quiet desperation of our workforce. A massive number of people feel that their work lacks significance, and slog through their day just to make a living. But there is a better way.

Broadening the Concept of Productivity

So the question I asked myself was: Should I blog on how to manage our lives better or what it would look like for the organizations we work for to be managed more effectively? And, of course, my answer was: “both.”

For these are really two sides of the same coin. Those who lead organizations cannot be effective if they do not know how to manage themselves and all the input that we all face every day. Likewise, if we are effective in managing ourselves, that is not the whole picture. The point of personal productivity is to be a useful person—and this implies that we all have an interest in understanding what makes organizations effective and how we can bring the businesses and non-profits that we work for farther along that path.

So the meaning of productivity is much more broad than just making ourselves more effective. It includes what we do with that–how we can make our organizations and society more effective.

This is Exciting

I think this is exciting. We have a chance to not only become more effective in our own lives, but to help our organizations and, ultimately, society become more effective and useful. I asked my wife if she would rather read a blog about personal productivity or doing things better in business and management. She is a nurse who currently stays home with our kids, so she doesn’t deal with the whole organizational management side of things. Yet she said, “Both. It’s all relevant to me when you talk about it, because I see how the organizational side of things affects me and the people who work in organizations.” I hope that you all have the same experience reading this blog, whether you lead an organization, work in middle management, are just starting out, or are even a stay-at-home mom.

Filed Under: 1 - Productivity

Guiding Principles for Organizational Design

August 11, 2008 by Matt Perman

The Basics of Organizational Design

The Nature of Organizational Design

General Principles

  1. Ultimate principle: Make it easy and motivating for people to collaborate, innovate, and achieve.
  2. “Organizational design is the means for creating a community of collective effort that yields more than the sum of each individual’s efforts and results. Organizational structures, processes, and practices channel and shape people’s behavior and energy. As a leader, you have the opportunity and responsibility to structure these relationships so that people find it easy to collaborate, innovate, and achieve” (Designing Dynamic Organizations).
  3. Organizational design is “the deliberate process of configuring structures, processes, reward systems, and people practices to create an effective organization capable of achieving the business strategy” (Designing Your Organization). It is to harness the efforts of individuals, although often it has been a barrier to them. One of its core purposes is to align individual interests with organizational interests, making it easy for employees to make the decisions that advance the organizational purpose.
  4. Organizational design is a competitive strategy and a hard-to-copy, and thus sustainable, source of competitive advantage.
  5. The six shapers of today’s and tomorrow’s organizations are: Buyer power, variety and solutions, the Internet, multiple dimensions, change, and speed.
  6. The business strategy should set the criteria necessary for determining the priority task to accomplish, and the organization should then be designed to meet those criteria. “Match what is required by the strategy to what is done best by the various structures to optimize the decision” (Designing Organizations).
  7. Every design has strengths and weaknesses. The weaknesses can be made up for through the proper implementation of lateral processes.
  8. Organizational design is more than organizational structure. There are five components: strategy, structure, processes, rewards, people. This enables you to overcome the negatives of any structure, because you can use the other components of the model to counter the negatives while achieving the positives.
  9. Consequences of a non-aligned organization (from Designing Dynamic Organizations):
    1. If strategy missing or unclear, confusion. People pulling in different directions, no criteria for decision making
    2. If structure not aligned to strategy, friction. Inability to mobilize resources.
    3. If processes and lateral capability is left to chance, gridlock. Lack of collaboration across boundaries, long decision and innovation cycle times.
    4. If the metrics and rewards don’t support the goals, internal competition. Wrong results, diffused energy, low standards, frustration and turnover.
    5. If people aren’t enabled and empowered, low performance. Effort without results, and low employee satisfaction.

Reconfigurable Design

  1. The organizational design needs to facilitate variety, change, speed, and integration.
  2. The environment changes rapidly and is turbulent. The company must be able to change as rapidly as the environment does. Therefore, “an organization must be designed from the outset to be more easily changeable” (Designing Organizations).
  3. Aligning with strategy can make an organization vulnerable, because the advantages of a specific strategy are often short lived as the competitors quickly copy it. But the problem is not alignment, but aligning around a nonsustainable advantage. Misalignment will cause conflict, friction, units working at cross-purposes, lack of clarity, and thus dissipation of organizational energy.
  4. What is needed is a new type of aligned organizational design: “structures and processes that are easily reconfigured and realigned with a constantly changing strategy” (Designing Organizations). This is the reconfigurable organization.
  5. The reconfigurable organization can these three capabilities:
    1. Formation of teams and networks across departments
    2. Use of internal prices and markets to coordinate the complexity of multiple teams
    3. Formation of partnerships to secure capabilities that it does not have.
  6. A dynamic organization: An organization that can be easily and proactively reconfigured to take advantage of market opportunities and that views organizational design as a competitive advantage. It can quickly combine and recombine skills, competencies, and resources across the enterprise to respond to changes in the environment. It is characterized by active leadership, knowledge management, learning, flexibility, integration, employee commitment, and change readiness.
  7. “A well-thought-out organization design empowers and enables employees to work in the highly interdependent, team-oriented environments that typify today’s business landscape. And the clearer the rationale for the design, the more quickly design decisions can be reassessed and modified to respond to external forces” (Designing Dynamic Organizations).

The Process of Organizational Design

  1. Organizational design is a continuous process, not a single event, because it is more than structure (and structure should be adjusted as needed as well). “Successful companies are continually evaluating and adjusting their organizations.”
  2. You need to follow a design process that builds commitment, because it takes both fit and commitment for a design to be effective.
  3. We often use our experience to design our organization. But this experience is limited and we can enhance it by blending it with the science of organizational design.
  4. In other words, many leaders make their organizational design decisions on the basis of their own experience and observation. But making sound decisions requires a framework that gives credence to one choice over another.
  5. Benefits of a framework are that you have a common language for articulating why one choice is better than another in objective terms, you are forced to make decisions on the basis of longer-term strategy rather than more immediate demands, you have a clear rationale for the choices considered, and you can more effectively evaluate outcomes, understand root causes, and make adjustments during implementation.
  6. When to redesign:
    1. You are starting up a new company or division
    2. You are planning to grow. Of 1999’s list of Fortune’s 100 fastest growing companies, about a fifth lost 60-90% of their value the next year, and almost half lost at least some value. Most suffered from not having the right infrastructure or people to support continued growth.
    3. You have just assumed a more senior position.
    4. Your strategy has changed.
    5. The organization has changed.
    6. There has been a major change in the external environment.
    7. Your organization isn’t delivering the performance expected.
  7. “Organizational design has to be rounded in an ‘ideal organization,’ that is, a conceptual framework. There has to be careful work on defining and delineating the structural principles. this work, in turn, must be grounded in the mission and purpose of the business, its objectives, its strategies, its priorities, its key activities.” (Peter Drucker, The Practice of Management, 599).

Design Principles

  1. Alignment is fundamental .“The more the structure, processes, rewards, and people practices reinforce the desired actions and behaviors, the better able the organization should be to achieve its goals. Just as important as initial alignment is the ability to realign as circumstances change” (Designing Your Organization).
  2. Keep the organization as clear and simple as possible.
  3. Bias toward centralizing support functions
  4. Similar roles should be standardized enterprise-wide.
  5. Organizing structure should parallel across the enterprise, as much as possible.
  6. Requisite complexity. Cannot avoid complexity, but can intelligently design and manage it.
  7. Complementary sets of choices. There are many choices, but once a strategic path is set the number of suitable choices for each point is reduced.
  8. Coherence, not uniformity.
  9. Active leadership. Leaders must clearly and continually communicate strategy and create the decision frameworks in which employees operate.
  10. Start with the lightest coordinating mechanism. “Always use the lightest touch when selecting what lateral form to use, choosing the least costly and least difficult process to meet the required objectives.”
  11. Make interfaces clear.
  12. “The basic rule in placing an activity within the organization is to impose on it the smallest number of relationships. At the same time, it should be so placed that the crucial relations, that is, the relationship on which depend its success and the effectiveness of its contribution, should be easy, accessible, and central to the unit. The rule is to keep relationships to a minimum but make each count” (Drucker, The Practice of Management, 545).
  13. Clarity: Each individual and manager needs to know where he belongs. Needs to have a clear home base.
  14. Economy: The minimum effort should be needed to manage and supervise and motivate. Organization structure should encourage self-motivation. The smallest number of people should have to devote time and energy to keeping the machinery going.
  15. Direction of vision: Organization structure should direct he vision of individuals and of managerial units toward performance rather than efforts. And thus toward results—the performance of the entire enterprise. “Performance is the end which all activities serve” (Drucker, The Practice of Management, 554).
  16. Understanding ones own task and the common task: Should enable each individual to understand his own task, and the task of the entire organization. And what each implies for the other.
  17. Decision-making. Needs to strengthen, not impede, the decision-making process.
  18. Stability and adaptability. The individual needs a home; no one gets much work done as a transiet in a railroad station waiting room. Stability is not rigidity—needs to be a high degree of adaptability. A totally rigid structure is not stable; it is brittle.
  19. Perpetuation and renewal.

The Power of Organizational Design to Mobilize Minds

  1. Companies have been constrained, unnecessarily, by the unproductive complexity of working in their own organizations. The massive opportunity is in the freeing of talented people from unproductive complexity, enabling them to use both hierarchy and collaboration more effectively. Large-scale collaboration, across the entire enterprise and enabled by digital technology, is the new element that opens the 21st century corporation to a greater potential to create wealth.
  2. Great financial impact can come from making organizational design the centerpiece of corporate strategy because most companies were designed for the 20th century manufacturing model which focused on tangible assets, where as today the greatest value comes from intangibles. “By remaking them to mobilize the mind power of the 21st century workforce, these companies will tap into presently underutilized talents, knowledge, relationships, and skills of their employees. This will open them up to new opportunities and vast sources of wealth.” (Mobilizing Minds)
  3. Companies need to mobilize mind power as well as capital, which comes from removing unproductive complexity while simultaneously stimulating the effective and efficient creation and exchange of intangibles.
  4. Intangibles are assets like brands, intellectual property, and proprietary networks that are unique to individual firms. With intangibles, you want to capture economies of scope. For ex, if investments in a brand can be shared across multiple products, you have economies of scope.
  5. Increase the number of productive interactions among your workers while reducing the number of unproductive interactions.
  6. Ideas for organizing in the digital age from Mobilizing Minds: Backbone line structure, one company governance and culture through partnership at the top, dynamic management (portfolio of initiatives separate from ongoing operational activities), formal networks, talent marketplaces, knowledge marketplaces, new financial measures (profit per employee becoming the primary metric for profitability, as it puts greater weight on returns on talent than returns on capital), role-specific performance management, and organizational design as strategy.
  7. The real engines of wealth creation in the 21st century are knowledge, relationships, reputations, and other intangibles created by talented people. Companies create wealth by converting raw intangibles into the institutional skills, patents, brands, software, customer bases, intellectual capital, and networks that increase profits per employee and returns on invested capital. These intangibles are true capital in the sense that they can produce real cash returns. A hindrance to this is that our financial performance measurements are geared to the industrial age, not the digital age. So in order to create wealth, companies first need to change their financial performance metrics so that they focus on returns on talent and not only returns on capital.

Our Situation

Organizational Capabilities

  1. Strengths-based organization
  2. Organizational health
  3. Synchronization with the New Marketing: Leverage scarce attention and create interactions among communities with similar interests. Every transaction is a form of media. Tell stories that spread because people want to share them, create remarkable products, gain permission to deliver messages directly to interested people. Ideas that spread through groups of people are far more powerful than ideas delivered at an individual.
  4. Optimization for industry collaboration and partnership
  5. Optimization for large-scale collaboration of constituents. Treat people with respect and connect them with one another.
  6. Big Think
  7. ROWE
  8. Deeds of mercy to illustrate and manifest what we proclaim
  9. Maximize our competence in Management as ministry.

Environmental Factors

  1. Google and the dicing of everything
  2. The long tail
  3. The need for an authentic story
  4. Direct communication between producers and consumers and consumers and consumers
  5. Infinite channels of communication
  6. The infinite shelf space of the web
  7. The triumph of big ideas
  8. The shifts in scarcity and abundance
  9. Shocks are the system –> change and speed
  10. The falling of interaction costs to almost zero through digital technologies that make large-scale collaboration possible

The Components of Organizational Design

Organizational design is more than organizational structure. There are five components: strategy, structure, processes, rewards, people. This enables you to overcome the negatives of any structure, because you can use the other components of the model to counter the negatives while achieving the positives.

Every design has strengths and weaknesses. The weaknesses can be made up for through the proper implementation of lateral processes.

Strategy

  1. Strategy is your high-level plan for success. It determines the direction of your company, and includes your mission, vision, long-term goals and short-term goals.
  2. Strategy is the cornerstone of the process. It “establishes the criteria for choosing among alternative organizational forms. Each form enables some activities to be performed well while hindering others. Strategy dictates which activities are most necessary, thereby providing the basis for making the best trade-offs in the organizational design” (Designing Organizations).
  3. Is based in part on organizational capabilities, which are the unique combination of skills, processes, technologies, and human abilities that differentiate the company.
  4. The business model is the “internal logic of a company’s method of doing business.” It includes the value proposition, target customers, distribution channels, revenue model, etc.
  5. The business portfolio sit he “set of product lines or business units that a firm manages.”
  6. The first step in connecting strategy to the design is to identify the most important organizational capabilities.

Structure

General Principles

  1. Structure is the way that authority is organized.
  2. There are four areas of structure:
    1. Specialization: The type and numbers of job specialties.
    2. Shape: The number of people in the departments (span of control).
    3. Distribution of power: Centralization and decentralization.
    4. Departmentalization: The formation of departments at each level.
  3. There are six principles of organization that can be used: functional, product, customer, geographic, work flow process, and front-back hybrid.

Structural Dimensions

Functional

  1. Functional structures organize around activity groups (functions).
  2. This structure is best for: Companies with a single line of business, are small, don’t have a diverse line of products, don’t compete based on speed of product development cycle times.
  3. Advantages of this structure are: Allows greater level of specialization, reduces duplication, higher economies of scale, higher standardization, allows people of one specialty to transfer ideas, knowledge, and contacts more easily.
  4. Disadvantages of this structure are: Can’t handle diversification and can create barriers between functions.

Product

  1. Product structures organize into divisions around products and/or product lines.
  2. This structure is best for: Companies that produce multiple products for separate market segments.
  3. Advantages of this structure are: Scales with diversification of product line, compresses development cycle, simple, broad operating freedom.
  4. Disadvantages of this structure are: Can result in duplication of resources and missed opportunities for sharing, with each division reinventing the wheel. This can be overcome by supplementing this structure with lateral processes. Economies of scale can be lost. Can overcome this by centralizing and sharing the functions that cannot be separated into the product units without a scale loss. Can create multiple points of contact for customer.

Customer

  1. Customer structures organize around customer segments, such as client groups, industries, or population groups.
  2. This structure is best for: Environments where buyers have strength and influence over the market, competition is based on rapid customer service and product cycle times, and the organization is large enough to achieve the scale required to duplicate functions.
  3. Advantages of this structure are: Customization, relationships, solutions.
  4. Disadvantages of this structure are: Divergence, duplication, scale.

Geographic

  1. Geographic structures are organized around physical location.
  2. This structure is best for: companies with a high cost of transportation for their products, who deliver services on-site, need to create perception that company is local, need to be close to customers for delivery and support.
  3. Advantages of this structure are: Local focus, possibly lower transportation costs.
  4. Disadvantages of this structure are: Mobilizing and sharing resources. When a customer needs a “global” solution requiring talent from multiple regions, slow response time. Cumbersome.

Front-Back Hybrid

  1. Front-back hybrid structures have the front-end organized by customer and the back-end by product. Gives customer one point of contact, while allowing for product excellence.
  2. This structure is best for: Companies that need to maximize both customer and product excellence and have managers skilled in managing complexity.
  3. Advantages: Single point of interface for customers, cross-selling, value-added systems and solutions.
  4. Disadvantages: Contention over resources, complex.

Workflow

These are not very interesting and don’t sound promising.

Choosing Structures

  1. The choice of structure must be based upon the company strategy. “Match what is required by the strategy to what is done best by the various structures to optimize the decisions” (Designing Organizations).
  2. The strategies best executed by each structure are (from Designing Organizations):
    1. Functional: Small size, single product line, undifferentiated market, scale or expertise within the function, long product development and life cycles, common standards.
    2. Product: Organization has a product focus, multiple products, short product development life cycle.
    3. Market: Important market segments, product or service unique to segment, buyer strength, customer has a knowledge advantage, rapid customer service and product cycles.
    4. Geographical: Cheaper transport costs, service is delivered on-site, need closeness to customers, need perception of the organization as local.
    5. Process: Alternative to functional.

Centralization vs. Decentralization

  1. Start with the premise of decentralization
  2. Then pull out compliance activities and centralize them
  3. Then pull out shared service opportunities and centralize them
  4. Identify the business performance improvement roles that might be played by the center (Designing Your Organization).
  5. “A decision should always be made at the lowest possible level and as close to the scene of action as possible. However, a decision should always be made at a level insuring that all activities and objectives affected are fully considered. The first rule tells us how far down a decision should be made. The second how far down it can be made” (Drucker, The Practice of Management, 545).

Organizational Roles

  1. An organizational role is a distinct organizational component defined by a unique outcome and set of responsibilities. may be a business unit, function, or type of job.
  2. Probably the most important design activity.
  3. Not simply a matter of defining the roles. Three steps: role definition, interface definition, boundary clarification.
  4. For role definition, define expected outcome and responsibilities for each role. Outcome is intended state to be achieved; responsibility is the tasks required to close that gap.
  5. Interface creation is defining the mutual expectations between roles that are interdependent and have a point of interface (handing off work, receiving work, providing a service, collaboration).
  6. Boundary clarification is identifying the boundaries between roles for decision-making and responsibility. Use a responsibility assignment matrix.

Leadership Roles

  1. Current trend is to delayer and flatten. Less layers of management can bring decisions and communication closer to customers, develop more autonomy and accountability lower in the org, and decrease costs.
  2. Conversely, more management positions gives people the opportunity to develop supervisory skills, provides for closer coordination of work output, and frees managers in levels above to concentrate on more strategic priorities.
  3. Rule is to develop the least possible number of management levels and forge the shortest possible chain of command.
  4. Workable executive teams are typically 5-10 people.

Core Business Activities

These are the core activities of any business. In a functional organization, these become the departments. In the other arrangements, these are sub-units within the departments (except for those functions which are shared).

  1. Finance: Controls the money. Makes sure company has the money it needs to operate. Helps departments do their budgets and consolidates them into one company budget. Works with senior management to set sales and profit goals for year and designs controls to keep finances in order.
  2. Accounting: Counts the money. Tracks the flow of money the company generates. Accounts receivable, accounts payable, and payroll al may be distinct sub-departments. Also credit and tax departments.
  3. Operations: Makes what the company sells. In manufacturing company, includes factory. Also includes departments such as shipping and receiving, purchasing, and back-office functions (such as check-processing at a bank). Often called the production Directly responsible for employee productivity, cost control, and quality.
  4. Marketing: Sells to groups. May also include market research, product development, public relations.
  5. Sales: Sells to individuals. May include customer service.
  6. Information systems: Runs the computer systems. Purchase, programming, maintenance, and security of the company’s computers, as well as using information for competitive advantage.
  7. Support functions: Do the rest. Human resources, legal, investor relations, facilities management.
  8. Each division is run by managers, who in turn report to vice presidents, who in turn report to the president and chief operating officer.

Lateral Processes

  1. All structures create silos, because every logic that can be used to group people has trade-offs.
  2. Lateral processes break down silos and coordinate activities across departments. They are information and decision processes that spread across units, enabling the decentralization of general management decisions and proper communication across departments.
  3. Lateral processes allow work to get done at the level it occurs, as people interact directly without having to go up the hierarchy and through their managers, and brings together the relevant players with the right perspectives to solve problems, make decisions, and coordinate work.
  4. Vertical processes concern whole-organization activities, such as strategic planning, budgeting, standards development, capacity management, etc.).
  5. Horizontal processes concern the workflow. Examples are new product development or the fulfillment of a customer order. These are becoming a primary vehicle for managing.
  6. Lateral processes are essential for being responsive on multiple dimensions. They are also the key to the reconfigurable organization. As strategy or the environment shifts, you don’t need to restructure; you just adapt your lateral processes. This is much quicker and more agile. In other words, the lateral structure is “more flexible and easily changed than the vertical. So a focus on its design will allow the company to respond quickly to shifts in strategy without having to restructure the entire organization” (Designing Your Organization).
  7. Lateral capability is the ability to bring the right people together quickly around risks or opportunities, and is the most powerful means of changing direction. It is the ability to build, manage, and reconfigure the various coordinating mechanisms to achieve strategic goals.
  8. You match the type and amount of lateral processes with the level of cross-functional coordination required by the business strategy.
  9. Six types of lateral processes are: networks, teams, lateral activities, integrating roles, and matrix organizations.
  10. The lateral capability is cumulative—you can’t have effective teams or integrating roles, let alone matrix structures, if you don’t have strong networks and well designed lateral processes beneath them.
  11. Lateral capability results in better return on management time, greater speed, higher flexibility, and employees thinking more broadly to understand other perspectives.

Networks

  1. Networks are voluntary processes. They occur spontaneously and thus are the least expensive and easiest to form and use. Organizational design can improve the frequency and effectiveness of them.
  2. People cooperate voluntarily when they have relationships with people in other departments and are comfortable working with them.
  3. Ways to enable the creation and flourishing of voluntary processes: define the key cross-departmental interfaces in each person’s role, interdepartmental events, co-location, communities of practice, annual meetings and retreats, rotational assignments, technology and e-coordination, mirror image departments, consistent reward and measurement systems.
  4. Training courses and conferences can be integral: “Voluntary processes also result from events such as training courses and conferences. Indeed, training budgets are as justified by their networking effects as by their developmental effects” (Designing Organizations, 49).
  5. Note that Steve Jobs found that creativity and collaboration suffered when people weren’t able to work in the same physical space. So he consolidated Pixar into one building in 2000, whereas before it was scattered among four sites.
  6. Principles for designing space to encourage interaction are: Provide communal space, create natural interaction hubs, and base design on function, not privilege. Note: Current trend to switch to totally open floor plans is less than optimally functional.

Teams

  1. Team, task force, or council. More costly than voluntary groups because they do not create naturally but are the creation of management.
  2. Can have different levels of formality, including creation of charters and goals. The charter defines the scope, mission, and authority of the group.
  3. Issue teams: Put together to solve a short-term specific problem.
  4. Work groups: Clusters of employees in same unit who do similar work and must coordinate their efforts.
  5. Cross-business teams: True integrative mechanisms. Pull together people across the departments.
  6. Manger’s role evolving: manager, team leader, facilitator, adviser.
  7. Conditions for successful teams include: Common purpose, team members influencing goals, clear priorities, right skill level and mix, team accountability, clear criteria for leadership positions, decision norms, information, performance measures and rewards.

Lateral Activities

  1. Typically 3-5 that are critical. Might include new product development, innovation management, and market research.

Integrative Roles

  1. These are formally created roles but without formal authority to coordinate work across units. Product managers, project managers, coordinator.

Rewards

General Principles

  1. People need to have a clear view of what success means. Reward systems define the expected behaviors and influence the likelihood that people will demonstrate them. They align the goals of the employee with the aims of the organization.
  2. The most important challenge is how to create incentives for collaborative behavior.
  3. Four components: Metrics, desired values and behaviors, compensation, reward and recognition (the nonmonetary component).
  4. Design of sound metrics rests on six principles:
    1. Bread: Not just financial.
    2. Criticality: Only what’s important. Too many overwhelm the system.
    3. Time orientation: Both lagging and leading. Leading to predict future trends, lagging to test accuracy. Measuring only lagging indicators is like trying to steer a boat only by its wake.
    4. Consequences: Beware of unintended consequences.
    5. Alignment: Avoid conflicting measures.
    6. Targets: Make challenging but not impossible.
  5. Balanced scorecard measures are: Financial, customer, internal business process, innovation and learning.
  6. Four dimensions of recognition: goals and results, values and behaviors, special achievement and effort, overall contribution. Shouldn’t reward one to exclusion of others. For example, reward only goals and results, and people can tend to focus on the end over the means. Reward only values and behaviors, and people can lose site of business results.

Compensation

  1. On compensation: “The trend in reward and compensation systems is to value people for their skills and knowledge they bring to the organization and how they use them rather than for their particular position they are currently filling. This shift from job focus to person focus helps build a reconfigurable organization. It changes the definition of success from moving up a job ladder to increasing skills and developing additional capabilities that are of value to the organization.” (Designing Your Organization, 191)
  2. Trends are:
    1. From a focus on salary to total compensation philosophy
    2. Predictable merit increases to variable compensation. Performance-based rewards that have to be re-earned each year and don’t permanently increase base salaries. Allows for differentiation in performance and yet holds down costs.
    3. Paying for time to paying for performance
    4. Valuing the position to valuing skills and knowledge
    5. Rewarding individuals to rewarding teams and business units
  3. “Traditional compensation methods value a job, regardless of who is in it. When jobs are well defined, stable, and provide little opportunity for development within the job boundaries, this system works well. What many companies have found is that it doesn’t work well in environments characterized by: integration of activities across many individuals, fluid tasks and responsibility definitions, high dependence on exchange of knowledge, interactions among multidisciplinary people.” (Designing Dynamic Organizations, 207)
  4. Do person-based, rather than job-based, pay. “Financial status and rewards in most organizations are based on the types of jobs people do. This approach is based on the assumption that job worth can be determined and that the person doing the job is worth only as much as the job itself is worth…. It is not clear that the worth of people can be equated with the worth of their job. This approach clearly does not fit with a company that depends on people for its competitive advantage. The alternative that is being increasingly adopted is person-based pay. It bases pay on each individual’s skills and competencies.” (Treat People Right) The benefit of person-based pay is in the kind of culture and motivate the system produces. Instead of being rewarded for moving up the hierarchy, people are rewarded for increasing their skills and developing themselves. This creates a learning culture in which personal growth and development are prized. So learning culture correlates with person-based pay.

People Practices

  1. People consists of the HR policies, including recruiting, selection, rotation, training, and development. These are the “collective human resource practices that create organizational capability from the many individual abilities resident in the organization” (Designing Dynamic Organizations).
  2. The purpose of HR policies is to “produce the talent required by the strategy and structure of the organization, generating the skills and mind-sets necessary to implement its chosen direction” (Designing Organizations).
  3. Dynamic, reconfigurable organizations are characterized by people practices that support learning and the development of strategically important capabilities. “Learning and development are key enablers for the organization.” (Designing Your Organization)

Other Structural Issues

Corporate Center

  1. The corporate center consists of the staff and activities that take place outside the operating units. The operating units are the profit centers, where the primary business activities take place.
  2. Corporate center activities general report to the CEO and provide support for all business units and the overall enterprise.
  3. Examples of activities are: enterprise-level management (CEO/COO), legal, financial reporting, payroll, HR, training, public relations, government relations, strategy, marketing, sales, distribution, IT, supply chain.
  4. Three primary roles: business performance improvement (creation and sharing of capabilities), shared services, and compliance.
  5. Typically organized into functions.

Management Levels

  1. Head of product divisions are general managers. (Product divisions develop well-rounded executive talent with the experience of running an end-to-end business.)
  2. Frontline drives performance, senior leadership drives strategic initiatives and cross-firm collaboration, and top management determines long-term health of the enterprise.
  3. Top management: The people held accountable by the board of directors for the performance of the entire firm.
  4. Senior management: Direct reports of top management, and is usually responsible solely for the business arenas and support functions it leads.

International Strategy

  1. Five types: export, partner, geographic (add units), multidimensional network (the geographic dimensions share power), transnational (all the firm’s units around the world play both leading and contributing roles in creating organizational capabilities).
  2. Adding geographic units and then collecting them into an “international division” reporting to the CEO is the most common way to move across borders.

Specific Cases

  1. Internet activities: Should be centralized in a single department because of the specific expertise needed.
  2. Knowledge management boundary-spanning integrative roles have come up recently. In this category are chief knowledge officer, chief learning officer, and chief innovation officer. Knowledge officers identify opportunities for knowledge creation that will create value for the company and coordinate knowledge sharing. See themselves as change agents, charged with overseeing the development of knowledge management systems and creating environment and culture that will stimulate knowledge sharing.
  3. “Social networks increase the opportunities for collaboration, as well as the effectiveness and value of that collaboration, by connecting parties with related knowledge and interests while reducing the search and coordination costs of both parties. They enable individuals and teams to mobilize knowledge and talent.” (Mobilizing Minds)

Implementation

  1. You have to build a process for building commitment into the design. For the success of the design depends not only on fit, but also on And if people do not feel that they were a part of the process, they will not be committed to it and you will have passive resistance.
  2. Part of this is interviewing employees in the planning stage. Another is testing alternatives in interviews with people. In these interviews, if someone dislikes an alternative, they need to propose a counter solution as well.

Related Business Concepts

Growth and Innovation

  1. An organization can grow in three ways: acquisition, organic sustained growth, organic breakthrough growth.
  2. Acquisition: Purchase another company.
  3. Sustained growth: Extend the core business through product improvements, extending product line, creating new generation of products.
  4. Breakthrough growth: A “more radical departure from the core business in which wholly new products are launched into new markets.” Organization must acquire the new capabilities while continuing to maximize its existing business.
  5. Both types of organic growth depend upon innovation: turning novel ideas into commercially viable products and services.
  6. Types of innovation, moving from sustaining innovations to breakthrough innovations: product improvement, line extension, next generation, new product, new technology, new business.
  7. “Breakthrough strategies require a higher degree of separation from the core business both during the development and the commercialization and launch phase” (Designing Your Organization).
  8. The degrees of separation, moving from integrated to separate, are: existing product unit, lightweight product team, heavyweight product team, separate unit.
  9. Err on the side of separation rather than having a new business housed within an existing business unit. If launch is successful, can integrate it back in, or if the business model is different, put it into its own division. Or form a joint venture, sell it, spin it off as separate, or shut it down.
  10. Instead of separating out new ventures ad hoc, can set up separate divisions to house and nurture the new products and opportunities. Called accelerators. Nokia has a ventures organization in addition to its handset and network businesses that does this. Tests and develops ideas that are beyond the scope of Nokia’s current businesses but within the overall company vision. After the new venture is established, it is integrated back into the core business, it becomes a new business unit, or it is sold.
  11. The unit ought to report directly to the executive level, regardless of its size, because otherwise it can be hampered by lack of attention and resources.
  12. Four general strategies for growth: sell more to the same base of carefully selected customers, systematically cook up new products or services, establish control of a market such that you grow as it grows, or grow by rethinking how you get your service or product to customers.

Business Portfolio

  1. Differing degrees of diversity: single business, integrated business, related business, mixed portfolio, conglomerate/holding company.
  2. Integrated: Variety of products but seek to sell as a package.
  3. Related: Strong similarities among business units, but products not sold as integrated solutions. Technology, resources, knowledge shared across lines of business, which the center facilitates.
  4. Mixed: There is a common theme among the businesses, but they have very different underlying business models. Ex is Disney, having a movie studio, theme parks, publishing, television networks, retail stores, and music.

Partnerships

Types of Partnerships

  1. There are various types of relationships that can be formed with other organizations: markets, contracts, sourcing and alliance, equity, and ownership. Each form is progressively greater in its coordination and dependence.
  2. Markets is a spot contract for specific projects and activities as needed.
  3. Sourcing involves a contract as well, but is a closer and longer-term relationship. Parties reveal their long-term plans and participate jointly in development. Or, producer can give more customization to the other party, who in turn provides more security to the producer through making them a sole or preferred supplier.
  4. Equity relationships involve a transfer of equity. There are three types: the network integrator takes a minority shareholding the suppler, each member takes a small share in the others, or a joint venture.
  5. In a joint venture, a separate company is created with its own equity, which is usually split evenly.
  6. Ownership provides more security, as in the equity model the relationship can still fall apart. So if the vulnerability is too great for one partner, or the opportunity for profit is too large to share, they will purchase the other.
  7. Thus, companies are driven to more complex forms of relationships because of coordination, vulnerability, and value capture.
  8. The first priority in selecting a partner is to understand their strategic intentions.

Partnership Structures

  1. For any of these, there are three types of partnership structure: operator model, shared model, and joint ventures where the joint venture is autonomous.
  2. Operator model: one partner takes the management responsibility for the joint activity.
  3. Shared model: management responsibility is shared between the two partners.
  4. Joint venture: the venture is autonomous, with its own board and decision-making.

Bibliography

Designing Organizations: An Executive Guide to Strategy, Structure, and Process, Jay Galbraith.

Desiring Your Organization: Using the Store Model to Solve 5 Critical Design Challenges, Amy Kates and Jay Galbraith

Designing Dynamic Organizations: A Hands-On Guide for Leaders at All Levels, Jay Galbraith, Diane Downey, and Amy Kates.

Organizational Design: A Step-by-Step Approach, Richard M Burton, Gerardine DeSanctis, and Borge Obel.

Mobilizing Minds: Creating Wealth from Talent in the 21st-Century Organization, Lowell Bryan and Claudia Joyce.

The Practice of Management, Peter Drucker.

The Ten Day MBA, Steven Silbiger

The Complete Idiot’s Guide to MBA Basics, Tom Gorman.

Meatball Sundae, Set Godin.

Managing Performance to Maximize Results, Harvard Business School Press.

Executing Strategy for Business Results, Harvard Business School Press.

 

Filed Under: 4 - Management, d Alignment

Objections to Making it Free

October 30, 2007 by Matt Perman

There has been a good discussion on my article “Make It Free” over at Joshua Blankenship’s blog. It inspired me to address some of the main objections I often hear against my perspective that media ministries should post everything online, for free, without requiring registration, in a maximally usable interface.

Objection 1: People value what they pay for. Therefore, if you make all of your online sermon audio and other online content free, people won’t value it.

Response: This is the least powerful objection for a media ministry, in my opinion, simply because the gospel is free. Does that lead us to not value the gospel? Of course, some people will want to say, “Yes! Look around!” But surely God does not think so, because he is the one who made the gospel free. (As an aside, I would argue that when we don’t value the gospel properly, it’s because we’ve failed to recognize the depth of is freeness and have actually fallen into the mentality that we need to earn it “just a little bit.” When we truly begin to recognize that justification is completely apart from our works, that’s when we really begin to see the surpassing value of the gospel.)

Theological arguments aside, observation shows the premise to be false that “if it’s free, people won’t value it.” My favorite TV shows are 24 and Lost. They are all “free” to me—I watch them without paying a cent, and even skip the commercials. Yet I do not value them any less than if I had to pay for them. In fact, I have paid for episodes before on iTunes, and I didn’t value those any more than the ones that were free. Many other things in life are free and yet very valued.

The value that you place on something is often a reflection of the intrinsic worth of something or the cost someone else paid for it, rather than its cost to you. Further, in regard to resources like a sermon especially, the response we have to it may be costly to us in our actions. We may realize we need to start living this way or that, or do this or not to do that; or we may just be encouraged to stay a difficult course. Sermons bring this incredible after-the-fact cost; let’s not hinder that from happening by imposing a before-the-fact cost.

Objection 2: It dishonors the staff and volunteer hours and other work that went into producing the media, and the pastor’s time in preparing and preaching the sermon.

Response: You have the wrong people on your media team, and the wrong pastor in your pulpit.

Bottom line: When it comes to resources for edifying the church, the aim is not to preserve honor for the work in this way. The aim of the sermon is to edify and serve the church and the world. Christ calls us to sacrifice good things—in this case, the honor that comes from financial recompense for the work—for the sake of greater things. I wouldn’t deny that financial return for a resource bestows an honor on the work of all involved. But that’s not why they are doing the work; this is a good thing to sacrifice for the much greater goal of the work itself, which is to serve and spread. I would argue that, ironically, sermons and the creative efforts surrounding them are most honored when they are set free to spread and serve, without hindrance. This honors them most because it is most aligned with the purpose and nature of the sermons in the first place, which is to spread truth.

Objection 3: Do you think that making a profit is antithetical to serving others?

Absolutely not. Milton Friedman, the great Nobel Prize winning economist who brought capitalism back to life among academics in the latter part of the 20th century, is one of my heroes. I am fully on board with free market capitalism, for example, which has as one of its main implications that serving others in your work and making a profit are not at odds, but are ultimately the same pursuit. Further, I recognize that ministries that do charge are not doing so to make a profit per se, but to earn more money in order to produce more resources.

What I’m saying is that ministry work is in a different realm. While it is acceptable to charge for ministry resources, this also brings with it significant trade-offs that do not exist in the for-profit world. For example, it can create the appearance of peddling the word of God. It demonstrates God’s grace and generosity less fully, in exactly the realm where demonstrating generosity should be the fundamental guiding principle. And, as I argue in the original article, charging for online resources short-circuits the effectiveness of the work by creating a barrier to spreading.

The production of Christian resources is unique in that it is not mainly an artistic endeavor or profit-making service; it is a service per se, done for the good of others, at cost to oneself. The core of our message is that Christ gave of himself that through his sacrifice we might become rich; in ministry we imitate that best when we are willing to pursue the good of others at cost to ourselves—in this case, without receiving rightful remuneration.

But most vividly, this thinking cuts off creative thinking. The desire for security—often cloaked unintentionally in the mindset that “we have to charge so that we can keep making more resources”—covers up the flame of great thinking with the doldrums of boring, easy business models. As ministries, we are non-profit, and I think we mean that for real—it is not just a tax status to us. So let’s take advantage of that. Let’s do radical, risk-taking, great endeavors that simply could not be possible if we had to focus first on survival and the bottom line. If we go broke, fine. What a way to go out. Survival is not enough, anyway.

Objection 4: Do you disagree that ministries should be financially healthy?

Again, no. Usually. There are cases where we must sacrifice to our harm when there is a compelling reason of service that cannot be accomplished any other way. But as a usual course, it is best for ministries to be financially healthy. One of the things I’m saying is that charging online for resources is not very effective at doing this, and that if you make them free you spread your message further and will likely see more funding.

Also, keep in mind that I am speaking very specifically about the resource side of things, and in particular online resources. There are missions organizations, for example, that consist of running full-fledged businesses that sell commercial goods. Those ministries should not sacrifice financial strength in those areas. I am talking about the very specific matter of Christian resources, which are a unique case because of their unique nature and aim.

Objection 5: Most ministries don’t have the financial backing to offer things for free.

Offering things for free is a great place to start when seeking financial backing. It gives donors a compelling vision to give to. In other words, I think this objection has the order wrong. Second, this objection seems to assume that a ministry would make decent money from selling content online. I have my doubts that this will ever happen, although I grant that I could be wrong. The biggest obstacle, then, is finding the money to post the content. For that, see the first sentence of this paragraph.

Objection 6: Are you saying that charging is sinful?

No, I’m saying that it’s not a good idea for online media ministry resources. It undercuts effectiveness. This is not about right or wrong—do what you want. It’s about what will be most effective, what serves, and what is great.

Objection 7: But isn’t it good for the profits from one sermon to fund the cost of creating another resource?

I’m not against the concept of seeing content generate revenue so you can produce more content. I’m saying that there is a much better model for this than charging. Offering it free, no strings attached, will result in more funds if people that want to go deeper with the ministry are given the option to get involved. And it avoids the appearance of peddling the gospel and is an acted parable of the grace of God that is proclaimed in the sermons.

In the end, what I want to say is: “Who cares if we’re making money from sermons when such an intention seems by its very nature to reduce creativity and effectiveness?”

Filed Under: Web Strategy

Make it Free: Improving Online Effectiveness by Removing All Barriers to Accessing and Sharing Content

October 26, 2007 by Matt Perman

You can also read my follow-up article to this one where I answer objections.

If you are a Christian media ministry, I commend the following vision for maximizing your effectiveness online: Post all of your content online, for free, without requiring registration, in a maximally usable interface.

This basis for doing this follows from the purpose of ministry and the purpose of a ministry website. The purpose of any ministry is, at root, to spread the message of the good news of God’s grace. And the purpose of a ministry website is thus to serve as an avenue for spreading that message.

From this it follows that your site will be most effective if you maximize ease of access to your content. It’s simple: If your content is hard to access, or not accessible at all, then it can’t spread. People won’t find it on your site, and they won’t tell others. But if you remove all barriers to access, people will use it and tell others (assuming that it is good). Thus your message will spread and be of far more benefit to everyone in the world.

In other words, anything that hinders the ease with which your users can access and share your content imposes a “cost” on them. You maximize ease of access to your content (and thus the effectiveness of your site) by making it “free” in the fullest sense of the word–by offering it without financial charge and removing all barriers to accessing the content.

There are four things that create obstacles for accessing and sharing content:

  1. Not having very much content online
  2. Charging for content that is online
  3. Requiring registration to access content that you don’t charge for
  4. Having a hard-to-use website

Therefore, there are four things you need to do in order to maximize access to your content online and truly “make it free”:

  1. Post all of your content online
  2. Don’t charge for your online content
  3. Don’t make people register to access any of your content
  4. Make your site very easy to use

In other words: post everything online, for free, without requiring registration, in a maximally usable interface. In what follows, I will attempt to show that if your ministry does this, you will demonstrate God’s grace in a wonderful way, serve people more effectively, and build a larger audience. Further, if it feels dangerous to post everything online for free, I will discuss how this is actually not too different from what you already do if you have a traditional radio broadcast. I will then close by observing what a great testimony to God’s grace and service to the church and world that it would be if every ministry did this.

Post All of Your Content Online

By “everything” here, I really mean everything. For example, if you have been on the radio for 30 years, then I would say to post every single broadcast from the last thirty years. Every article that has been written, every seminar that has been given, every conference message that has been delivered–any media or written content that your ministry has produced during its entire existence should be posted online. And it should be posted in all formats in which you have it or can get it–audio, written, and video.

Why? First, as a ministry you probably have a large amount of helpful content in your archives, and if people can’t access it, they can’t benefit from it. The mere fact that some of it may be 25 or even 50 years old is irrelevant–when it comes to biblical truth, if it was helpful then, it’s helpful now. Even when some content is heavily tied to its time period, there is almost always something timeless in it that will benefit people. If you post everything, then you let your users be the judge of what is most useful to them–which is as it should be, because a fundamental principle of effective online strategy is that you need to allow the users to be in charge.

Second, when it comes to the Internet, more is better. Our disposition should always be towards offering more, not less. It is so easy to search and browse (if you make your site usable–see point four) that abundant content provides a rich arena for your users to explore, and a reason to come back frequently.

Third, you should post all of your content because doing so is remarkable. To do something remarkable means to do something that is “worth remarking on.” Being remarkable is foundational to how your message spreads, because it spreads most effectively through everyday people remarking on it to others. Your website users are thus the most effective (and least expensive) promotional avenue for your site. Further, the Internet provides them with a megaphone that amplifies their word of mouth so that instead of telling just a few people, they can tell hundreds.

But in order to tap into this, you need to give your users a reason to talk about your site. Telling them to talk about it won’t work. You need to do something that is distinctive and incredible enough that it naturally motivates them to remark on it. Posting a massive amount of content is one of the best ways to do this. Put yourself in the shoes of a user for a minute. Now, imagine coming to your website and finding a years worth of radio program archives. That’s nice, but nothing incredible. Now imagine that there are thirty years of programs and other content. That’s remarkable–that’s something to keep coming back to and to tell others about. By making your site “remarkable,” you tap into the most effective–and least costly–method of promotion for your ministry and its message: your site users.

Don’t Charge for Your Content

If you are going to have people talking about and emailing your content, you need to make sure that you remove all obstacles to this process. This means you shouldn’t charge for your online content–not for any of it. Charge for things you pack and ship to people, such as DVDs and physical books. But don’t charge for anything that is accessed online. The reason is that charging creates a barrier to access, and therefore directly opposes the purpose of your site–which is to spread your content. Spreading your content requires that you maximize access rather than restrict access. The bottom line is this: If you charge for your online sermons or radio programs or other content, people will use it far less and tell others about it far less. This is a non-negotiable fact.

The secular media has recognized this for years. For example, sites like ESPN and CNN and Fox News have had their content free for years (perhaps even from the start; I can’t remember). Even the New York Times, which has been charging for its content, is now removing that barrier because they recognize how detrimental it is to their web traffic. A recent article in the Times discusses some of their rationale: “…many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYTimes.com. These indirect readers, unable to get access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.”1

It could be pointed out that a site like the New York Times benefits from advertising revenue, but a ministry site does not have a revenue source like that. Hence, some ministries might be concerned that if they don’t charge for their content, it will threaten their ability to fund the ministry. We have not found this to be the case at Desiring God. Instead, what we find is incredible gratitude from our users that they can access 27 years of sermon audio and other content for free. Some are so enthusiastic about this vision that it leads them to give. And isn’t this exactly the kind of thing that people want to give to? By posting all of your content online, you provide your donors a compelling initiative to support and be a part of. Further, you bring much more traffic to your site, and thus more people who may chose to become donors. While we haven’t done a formal analysis, it appears to me that posting everything online resulted in more gift revenue than sales revenue we have lost.

But increased donations is not our motive for not charging. There are four much larger reasons for posting everything for free, and I commend them to your ministry as well.

First, it emphatically demonstrates God’s grace. Salvation is free and without charge. Paul and the other apostles proclaimed the gospel for free and without charge. To make all of your content available for free says something great about God–it is an acted parable illustrating his incredible generosity and grace.

Second, posting everything for free serves others most effectively. If you are a ministry, I would assume that after glorifying God, your next most fundamental purpose for existence is to serve others–to be a blessing to the church and the world, no strings attached. Making all of your content free so that people can access it without restriction fulfills this aim and demonstrates to the world that you are not in ministry for yourselves. This is a message the world needs to see today more than ever. It is not wrong to charge. But my exhortation is to do what is great, to do what most manifestly serves others, and to think about financial return second–or third.

Third, as already discussed, far more of your content will spread, and it will spread to far more people. Requiring people to pay inserts friction into the process of spreading your message. Friction slows things down and brings them to a halt. If you want your message to spread as far and as wide as possible, you should go to all lengths to remove all possible friction from the process. And note that the obstacle with charging is not simply the amount you charge, but also the mere fact that users have to go through a payment process to obtain the content. So you should not reason “Well, what’s $1.99 for a sermon?” Even if you only charge $0.10, the mere fact that people have to go through a series of steps to access the content will substantially reduce the number of people who access it.

Don’t Require Registration to Access Your Content

There are many who recognize the importance of making the content free but then, in my opinion, take back everything by requiring people to register in order to access it. Although no money is involved, registration is a cost to the user because it is a hassle. If you want to maximize access to your content, you need to “make it free” in all senses of the word–you need to eliminate all costs to the user, even the non-monetary ones, of which required registration is the most significant.

There are several reasons to offer all of your content not only without cost, but also without requiring registration. First, as with charging money, requiring registration inserts friction into the process, thereby reducing the amount of content people access and spread. To see this clearly, think of your own behavior. Have you ever had a friend send you something interesting online–a link to a newspaper article or perhaps one of those personality tests that can figure you out in 5 minutes–but when you click through to get it, you find that they require your email address? If you’re anything like me you do one of two things when this happens. Either you hit the back button and forget about it, or, if you really want it, you give them your Hotmail address from 6 years ago that you never check. And these sites weren’t even trying to charge any money. Maybe you don’t think people should be this way, but we need to accept this is in fact how people are and structure our websites based on how people actually behave, rather than how we think they should behave. If you want your content to spread greatly, then do not require registration.

Second, if you require registration, most of the people that do register are not interested in hearing from you–they simply want to see the piece of content they are interested in, and then move on. So when they receive emails or bulk mailings from you, those communications will be thought of as spam–either going to an old Hotmail account they never check, or annoying them in their regular inbox. Either way, they will not be effective. As Seth Godin has said, “if someone signs up for a list they don’t want, in order to get something they do want, your emails to them are impersonal and irrelevant, and treated just like spam–and are just as irritating.” Far better to offer the option to subscribe to various email newsletters (and RSS feeds and podcasts), but not require it. Then, you will have a much higher quality email list. The people that sign up will be those who really want to be hearing from you–and thus your communications will be far more effective.

Third, if you require registration to access your content, then (in my opinion) it fails to clearly send the message that you are here first to serve, no strings attached. Instead, it sends the message of reciprocity–I’ll do something for you (let you access the content) if you do something for me (give me your contact information). This is not intrinsically bad, of course; but we are ministries. We have another aim. We are here to serve, period. Existence is not our first priority. Serving others for the glory of God is. Therefore, the message we need to make very clear is: “We are here to serve, no strings attached. Not serve you so that we can see a financial return, but just serve you because our joy and calling is to do good for your sake. If you do want to be more involved with the ministry, we would love it and would greatly benefit from your help, but regardless, our first aim is to be a blessing for you.” Let us as ministries send a message of service written in bold letters–we are not here for what we can get from people, but for how we can help and what we can give.

Make Your Site Very Easy to Use

Last of all, in order to see maximum spreading of your content, make your website easy to use. This again goes to the fact that user costs are not simply monetary; anything that creates an obstacle to accessing your content is a cost. A hard to use site is a cost to the user in that it hinders their ability to access (and share) the content and which thus must be removed.

There are a few key principles that can make a huge difference. First, and most important, make sure everyone who works with the web in your ministry reads Steve Krug’s book Don’t Make Me Think: A Common Sense Approach to Web Usability. This is by far the best book on the subject, and tells you almost everything you need to know about making your site easy to use. And the book is a quick read–just over a hundred pages, with many helpful illustrations and examples.

Second–and this is very basic yet will have the greatest impact–make sure that your site gives your users persistent secondary navigation throughout your site. Here is what I mean: Virtually every site has a global navigation bar which shows people the main sections of the site. This gives people the high-level layout of the site. But when you click into one of the sections, a lot of sites fail to give good sub-navigation that shows you where you are in that section and always stays with you so that you always know where you are. Without this, your users get lost. So an effective site needs to provide sub-navigation that is persistent–that is, that always stays with the user–and well organized. Krug’s book shows how to do this well. The result is good orientation for site users–the foundation to a usable site–so that they always know where they are and can easily get from one place to another.

Excurses: Comparing This Model to Radio

As an aside, it is worth noting here that the model I am proposing has certain key similarities to how traditional radio has been done. So if you have been doing traditional radio, the model that I am presenting doesn’t need to feel like such a risk. With traditional radio, ministries don’t charge people to listen to the program or require them to register. Access to the program is completely free. Those who listen and are interested in going further with the organization are then invited to contact the ministry, just like how with the Internet those who want to go further can sign up for a newsletter, sign up for a donor program, or purchase a product.

Requiring payment or registration to access or download ministry content is thus the opposite of what ministries have been doing with radio for decades. Offering content for free online, with the option to sign up for something if you want to go deeper, is actually more in line with the traditional radio model. And, it is far cheaper. For the cost of less than one station for a year, you can probably post all of your content online and cover several years of operating expenses for the site.

Alternatively, something that should not be preserved from the traditional radio model is being brought over–namely, the temporary duration of the archives. With radio, the program airs and it is gone. That is part of the nature of the medium. But with the Internet, there are no internal constraints, other than storage and bandwidth (which are very cheap, especially compared to radio), determining how long you can make a message available. The Internet allows you to keep the archives up permanently. Yet, many only keep their program archives up for a month or a year. I argue above, the best thing to do is to put all content online forever. This is a strength of the medium that needs to be utilized, and it will drive traffic.

What we see here, then, is the irony that, in general, we as ministries are often bringing over from radio strategies that we shouldn’t (namely, temporary access to the programs) while failing to bring over strategies that we should (namely, free access to the programs without requiring signing up with the ministry first).

In Conclusion: Everyone Should Do This

Here is what we have seen: Ministry websites exist to be a major avenue for spreading your message. Your website will do this most effectively if you “make it free”–that is, if you maximize ease of access to all of your content and remove all barriers that get in the way of using and sharing your content.

The way you do this is by posting everything online, for free, without requiring registration, and in a very easy-to-use interface. In turn, this emphasizes the grace of God and serves people most effectively. And the result will likely be that rather than seeing a threat to your financial survival, you will see a more enthusiastic donor base and a larger amount of web traffic that results in more interest, more spreading, and the financial provision you need.2

I would love to see every ministry website implement these four principles and make their content freely available in the fullest sense of the word. What an incredible testimony that would be to the grace of God and what an incredible service it would be to the church and the world.


1 “NY Times to Stop Charging for Parts of Its Website,” September 18, 2007. By the way, this is a good start, but they need to go further–apparently there will still be charging for access to some sections.
2 At Desiring God, after we redesigned our website on the basis of these principles, we saw these results within four months: Visits increased 99%, audio listens increased 352%, and page views increased 359%. One year later, traffic continues to increase at a significant rate.

Filed Under: Web Strategy

  • « Previous Page
  • 1
  • …
  • 152
  • 153
  • 154
  • 155
  • Next Page »

About

What’s Best Next exists to help you achieve greater impact with your time and energy — and in a gospel-centered way.

We help you do work that changes the world. We believe this is possible when you reflect the gospel in your work. So here you’ll find resources and training to help you lead, create, and get things done. To do work that matters, and do it better — for the glory of God and flourishing of society.

We call it gospel-driven productivity, and it’s the path to finding the deepest possible meaning in your work and the path to greatest effectiveness.

Learn More

About Matt Perman

Matt Perman started What’s Best Next in 2008 as a blog on God-centered productivity. It has now become an organization dedicated to helping you do work that matters.

Matt is the author of What’s Best Next: How the Gospel Transforms the Way You Get Things Done and a frequent speaker on leadership and productivity from a gospel-driven perspective. He has led the website teams at Desiring God and Made to Flourish, and is now director of career development at The King’s College NYC. He lives in Manhattan.

Learn more about Matt

Newsletter

Subscribe for exclusive updates, productivity tips, and free resources right in your inbox.

The Book


Get What’s Best Next
Browse the Free Toolkit
See the Reviews and Interviews

The Video Study and Online Course


Get the video study as a DVD from Amazon or take the online course through Zondervan.

The Study Guide


Get the Study Guide.

Other Books

Webinars

Follow

Follow What's Best next on Twitter or Facebook
Follow Matt on Twitter or Facebook

Foundational Posts

3 Questions on Productivity
How to Get Your Email Inbox to Zero Every Day
Productivity is Really About Good Works
Management in Light of the Supremacy of God
The Resolutions of Jonathan Edwards in Categories
Business: A Sequel to the Parable of the Good Samaritan
How Do You Love Your Neighbor at Work?

Recent Posts

  • How to Learn Anything…Fast
  • Job Searching During the Coronavirus Economy
  • Ministry Roundtable Discussion on the Pandemic with Challies, Heerema, Cosper, Thacker, and Schumacher
  • Is Calling Some Jobs Essential a Helpful Way of Speaking?
  • An Interview on Coronavirus and Productivity

Sponsors

Useful Group

Posts by Date

Posts by Topic

Search Whatsbestnext.com

Copyright © 2025 - What's Best Next. All Rights Reserved. Contact Us.