An effective organization design can make or break your ability to achieve your business strategy. This is particularly true in today’s ever-changing environment.
As a result, Plus Delta has seen a growing need for our clients to redesign their organizations to better align them with their marketplaces. So we thought it would be helpful for us to share some of our observations and experiences about planning and implementing organizational redesigns with you along with some important tips to consider throughout the process.
As we look at the landscape of our clients, we see several trends emerging. Larger organizations focused on market demand and market opportunity are designing their strategies to give them better market share and increased growth. At the same time, many mid-sized companies are trying to build new business functions that they know are needed to respond to specific opportunities, but they often don’t know how to implement them on their own. And smaller high-growth organizations are moving from their original founder/single-owner structure to the next level and need to instill new leadership and infrastructure to make that next step.
No matter what their size or reason, leaders want to achieve greater success and provide enhanced value to their customers and key stakeholders. So when it comes to creating a new organization design, the development of the organization’s strategy must start with these very customers and stakeholders.
A successful business strategy is created by comparing current business results with the customers’ or stakeholders’ future needs. Once we define the proper strategy, we can then use it to design an effective organization structure that will enable the strategy’s achievement in a way that is still aligned with the organization’s culture.
When performing an organization redesign, we always establish a “Design Team” who can help conduct the needs assessment, develop a draft of the future-state design, and ultimately drive the implementation process. When considering the composition of the Design Team, we often include two or three members of the senior leadership team as well as one or two of the most important mid-level managers who are well-experienced in the business. This team also needs an Executive Champion to sponsor the effort. The champion’s role is to keep the team on course to achieve the organization’s objectives. It helps to have an external facilitator and change advisor involved who is familiar with the design process as well. When we play this part, Plus Delta’s responsibility is to provide our unique perspectives as outsiders because we can more easily remain unbiased to the organizational culture and politics and therefore can provide better “out of the box” thinking on various design options.
To avoid creating the design in a vacuum, we typically use an iterative, dynamic process to help the Design Team conduct their work over a series of sessions. The process starts with an assessment of the organization’s current capabilities. This includes everything from work processes to business systems to the individual people and their skills – anything that can provide a competitive advantage. The following are just some of the questions the Design Team needs to ask themselves and others across the organization as part of the assessment process.
- Is our current organization structure aligned with our stated business strategy? Is it focused on meeting our customers’ needs?
- Do we have any process steps that no longer add value to the organization given our emerging business strategy?
- Are there redundancies or gaps in our current processes and/or procedures that may provide opportunities for improvement?
- Does our organization have the ability to innovate? Can we adapt to changing market conditions?
Once this assessment is complete, we then consider various design options for the organization’s structure. The important thing to keep in mind during this process is that no one organization design works for every organization. We also review the assessment results and balance the execution of the strategy and its related tasks with the potential impact on the people and culture within the organization. Our goal here is to align the structure with the related work processes so they support each other and help the organization achieve its intended results.
When the design is “complete,” the Design Team needs to shop it around with a number of senior leaders and other key stakeholders across the organization. The next step in the redesign process is going to be implementation, so it is critical to gain everyone’s buy-in early on rather than wait until later in the process. Once the early drafts of the design have been reviewed, refined, and validated, it’s time to implement. And this is the most critical step in the redesign process because we now need to create a transition strategy that helps employees understand the new organization and potentially new ways of working. At the same time, we also want to make sure our customers and key stakeholders understand our reasons and expected outcomes for the new design.
Within the organization, our transition strategy starts with gaining executive support for the new design and making sure that senior leadership fully understands the structure and the reasons for the change. Next, we engage employees in the process by communicating the expected changes to them as well as the reasons for them. We need to help anyone who may be resistant to the change too by guiding and supporting them through the change process in order to create long-lasting, sustainable change.
Finally, we work with our clients to put measurements into place to evaluate the effectiveness of the new design over time and make any necessary improvements. A continuous improvement plan such as this is critical to the long-term success of our redesign efforts. Remember, organizations need to be built to change, not built to remain the same.
Can Plus Delta help you design a more effective organization to enhance your future business results? To learn more about our methodology and approach in this area, please call us at +1 (310) 589-4600 or send an email to [email protected]. You can also visit the Organization Design page of our website for more information.
Note: This feature was originally published and distributed in Plus Delta Consulting’s e-newsletter in July 2008.
