Organization Design

Organizations are complex social systems. Redesign requires significant changes to structure, decision-making processes and senior roles.

But this work can get messy—fast. It needs to be rigorous and disciplined.

Who does a design? The CEO is responsible. But, with boundary conditions, you can minimize politics and reduce staff anxiety by involving senior leaders.

The Promise of Redesign

CEOs and their executive teams turn to organization redesign when their strategies require new levels of performance, such as:

  • Expanding into global markets
  • Scaling up to grow rapidly
  • Integrating significant acquisitions
  • Consolidating to improve profitability

These changes are often transformational, involving more than simply changing boxes and lines.

Successful organizational redesign requires recasting the way people interact with each other within groups and aligning those groups together. It involves building new organizational capabilities, developing new skills and instilling a new culture.

This is why we call it organization “redesign” and not just “restructuring.” Design goes beyond structure, positively altering all aspects of performance.

The Odds are Against Success

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of change management initiatives met initial objectives, and only 25% yielded gains that were sustained over time.

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of the time back-office costs are back to prior levels 4 years after a cost-cutting program.

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of respondents state that not enough focus is placed on managing change in critical projects.

Common Pitfalls and How to Avoid Them

Avoid “Ready, Fire, Aim” – Diagnose First

  • Resist the temptation to use a “back of the napkin” approach to creating new structures.
  • Determine root causes through a structured organizational diagnosis that involves leaders.

Let Strategy Drive Structure, then Staff to Win

  • Use strategy to determine organizational groups, not just cost efficiencies.
  • Identify the “golden boxes” – critical roles that must be staffed most carefully.
  • Avoid creating new roles just to retain talent.

Don’t Go it Alone – Engage Your Leaders

  • In design teams, use a combination of trusted senior executives and high-potential, growth-minded leaders.
  • Communicate constantly – avoid radio silence, which fuels rumors.

Don’t “Wing It” – Use Proven Tools

  • Apply a structured design methodology and train your leaders how to make design decisions.
  • Conduct an impact assessment to predict implementation issues and plan accordingly.

Must Haves: Tools and Methods That Work

Organization Design Process

We use a structured process for a design team(s) to take the results of an organization diagnostic and reconfigure the basic structure. It involves considering functional, market, geographic and business unit configurations and deciding which methods best support the strategic direction. It also involves designing the right processes and methods for linking parts of the organization together, beyond simply instituting a matrix structure.

Operating Governance Design

This process designs the right grouping of leadership teams needed to execute management processes (strategy development, operational reviews, talent reviews, budgeting, etc.). The result is an integrated governance model composed of distinct leadership teams that get work done effectively and efficiently.

Executive Role Redesign

With a new structure and operating governance system there is often need for one or more newly designed leadership roles, for example Chief Operating Officer, Chief Administrative Officer, Chief Innovation Officer, etc. This requires carefully configuring roles with the right responsibilities, accountabilities and appropriate scope. The result is clear job descriptions at the executive level that clearly enable clear decision making and collaboration among executives.

The River Strength Meter: Organization Design

Back of the Napkin Amateur Hour Engagement 101 Change Leadership Strategy Driven Design Strategy, Structure and Talent