In the current business environment, organisations are faced with new challenges, new innovations, and uncertainty on a constant basis making their adaptability and effectiveness ever more important. Organisational Design can contribute to this by unleashing the organisation’s potential and ensuring that the structure and people are fully equipped to keep up with the pace of change.
A business’ Organisational Design should be aligned to its business strategy and the wider operating environment. Therefore it is not static, but rather it is in constant flux as the business adapts to new challenges and implements new business models. It is in a continuous process of strategic nipping and tucking to ensure organisational resources are allocated most appropriately and most effectively.
Organisational Design is not simply about revising an organisational chart, moving reporting lines, adjusting spans of controls or announcing a new business unit. It is a comprehensive exercise that when carried out effectively, enables organisations to leverage their strengths in terms of its capabilities, structure, processes and talent.
We find that business leaders often wish to carry this out so as to satisfy specific business objectives such as:
Supporting Strategic Requirements
A drive for Organisational Design can be caused by a fundamental shift in business strategy, change in value proposition or product positioning, new markets, new customers, or as a result of a merger or acquisition.
Achieving Performance Improvement
This could be a result of process re-engineering or redesign, ERP implementation, performance or supply change management, strategic technology implementation, organisational performance, or a drive to make processes more lean.
Reaching Cost Reduction Targets
An organisation may be motivated to undergo an Organisation Design review because of required cost reduction exercises such as downsizing, rightsizing, streamlining or outsourcing.
Through our experience supporting clients through every step of this process, we have identified a number of principles to follow when undergoing an Organisation Design review;
Organisational Design should be aligned to enable your organisation’s strategy.
Key decisions to be taken relate to the level of specialisation in the division of jobs, departmentalisation of jobs into groups, the target spans of control and the level of delegation of authority in terms of the extent of centralisation and decentralisation.
Opt to assess the full organisation as a comprehensive project and make sure you can have a steady commitment in terms of time and resources for the entirety of the project. Understanding the level of commitment before the project is key for its overall success.
Take a methodical approach, instead of relying on intuition. When this is undertaken, a flexible operating model is established with a unique mix of strategy, people, and other assets within the company.
Don’t allow the past successes or failures to guide you, instead anticipate tomorrow.
Focus on what you can control and don’t get stuck trying to create a perfect and permanent Organisational Design - this does not exist.
Make the most of top talent and promote accountability. Design positions to make the most of people’s strengths and design to allow people to be accountable for their part of the work without being micromanaged.
Don’t assume that what works for another organisation will work for yours. No single organisational form will work for all businesses. Look to build on your strengths, existing processes, practices, structure and culture.
Don’t be afraid to shake things up. By definition Organisation Design exercises are meant to shake things up.
Organisational Design activities can lead to restructuring, new business units being formed and impacts on roles and responsibilities. This therefore highlights the importance of Change Management activities being developed to effectively manage possible significant changes with minimal resistance or disruption to the organisation.
We can help
Should you require any assistance in ensuring that your organisational structure, capabilities and reporting relationships enable growth, please contact us to discuss how we can help.
