Effective Organizational Design: Following the Process vs. Expediting the Execution

Transformation

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November 6, 2018

We often hear clients say, “we need you to help us redesign our organization/function.” While this sounds simple, organizational redesign requires rigor to achieve the desired results. Organizational design aligns structure, processes, rewards, metrics, and most importantly people with the strategy of the business, unit or function. Completing a full organizational design requires a series of progressive steps to achieve the desired outcome: 1) Operating model; 2) Organizational architecture and structure; 3) Competency model; 4) Job design; 5) People enablement; and 6) People transition and change management.

Some organizations may want to skip steps in order to expedite the process to save money in the short term, and the results may end up costing more money in the long-term due to resulting inefficiencies and rework. Other reasons organizations may want to expedite the process include:

  • An underlying assumption that everyone understands the process.
  • No desire to improve the current state of the organization/function/people.
  • The process work is too complex and time consuming.

Organizations must understand that completing the full organizational design process is crucial to achieving their goals. For example, in a retail organization, we completed the full organizational design for two business critical functions; our next wave of work was to complete the same full process for two additional functions. However, as the team developed operating models, we received the news of cost cutting. The result was an expedited organizational design, without key components, for the two additional functions.

This expedited design was a rapidly developed organizational structure with job descriptions and career paths to follow. With cost cutting as the main goal, the organizational structure was determined to move forward without leadership team collaboration or SME expertise incorporation. The result was a structure based off the current associates and structure.

Which two critical components were left out in this all too common scenario?

1) The workload capacity analysis to gain a true understanding of the roles, activities, and tasks for each function. Without this crucial process step, there were multiple inefficiencies impacting the people including shadow roles, overlapping work, and non-industry standard roles.

2) The organizational architecture to bridge the gap between operating model and structure, aligning capabilities and processes. Without including this they lost understanding of processes and how works gets done.

Lessons learned from our experience expediting organizational design included:

  • Subject matter expertise and collaboration are essential to create the organizational structure; if not incorporated, benefits may not be realized and issues may arise (inaccurate headcount, wide/narrow spans of control, lack of progressing levels, etc.).
  • Working through difficulty in implementation, associates were given new titles but did not change their ways of working.
  • The functions were not aligned, resulting in a lack of collaboration and inefficiencies across and within functions.
  • Due to lack of context and alignment on key information, the job design process was not set up for optimal success, resulting in unclear roles and responsibilities and ultimately overlapping work.

We should be focused on redesigning an organization to achieve the desired outcomes and goals; this is attained through the full organizational design process. When the organizational design, including structures, systems, and processes, is aligned with the business strategy, the people are better prepared to adopt the new culture and behaviors.

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