Organisation design isn’t the only driver of organisational effectiveness, but when it’s done well it can make a significant contribution to your organisation. Is it time to review your organisation?
There’s no one right answer when it comes to organisation design. It’s about making the right trade offs at the big picture level to optimise for your strategy and context, rediscussing the future operating model and then implementing well at the detailed level of processes, roles and reporting – which means both good decisions and careful implementation and engagement.
For example, we see many Executive Teams discussing the business strategy and getting straight into the ‘sticks and names in boxes’ conversation – from our experience, if you gather together 9 Executives in a room to discuss the future organisation chart, they will (very) likely end up with, at least, 9 boxes.
The importance of having an interim discussion on the future operating model, which comes in between strategy and organisation chart conversation, is key. The operating model helps to ensure that the structure design reflects business strategy, value chain and design principles without the distractions that ‘names in boxes’ tend to create in the design phase.
Whether you are going through a M&A, implementing your digital strategy, changing the business model, evolving product portfolio, improving your customer experience, or want your organisation to work more efficiently, a review of your organisation design will help you achieve your goals. You can follow these two steps to determine if your organisation is in good shape
First – create a clear picture of your organisation
It is important to understand that good organisation design is not about optimizing through infinite complexity. Clarity is so important that it is worth trading some elements that might seem ‘ideal’ to have an organization that is simple. The key is to know what those trade-offs are and work to minimize the downsides. One simple test for a clear and streamlined organization is the whiteboard test.
- Can you draw a high-level diagram of the organization on a whiteboard in under a minute?
- Can you describe in just one or two sentences how the organisation is designed to deliver its strategy and serve customers and stakeholders?
If you answered no to either of these questions, you need to consider whether the complexity of the organisation is getting in the way of absolute clarity and a focus on work that connects to the strategy and drives value.
Next – Detailed checklist of your operating model
If you survive the whiteboard test, the next step is to deep dive into the specific detail of the different components of your organisation design:
- Strategy and alignment
The number one factor to drive individual high performance is to understand my contribution to achieve the overall business strategy. So, you will be asking questions about the company goals, roles and strategy. Does everyone understands what the organisation needs to do and their contribution in it? Accountabilities have to be sorted: no gaps, no overlaps, and there has to be lots of cultural commitment to being accountable.
- Operational efficiency
How can the workforce waste as little time and effort as possible to get the work done?
You will be asking questions about rules, systems and processes and whether the right level of control is in place:
- Does everyone follow the same set of formal and informal (cultural) rules?
- Do decisions get made by the right people, with the right level of control – not too much, not too little?
- Talent management and enablement
Talent management is a very broad term. Korn Ferry point of view on Talent Management encompasses a framework that covers how work (roles and jobs) is designed – in the context of the organisation’s strategy and business models – and how talent to fill those roles is identified, attracted, selected, developed, rewarded and retained.
You will be asking questions about your culture and talent management practices.
- Are your people are engaged and enabled to do their jobs effectively?
- What type of the climate do your leaders create?
You can access our check list here. The questions in the checklist will give you a good sense of whether you are on the right track at a more detailed operating level. For your organisation, some will be of higher priority than others – and you may also have specific drivers that you need to consider and respond to. If you need help answering these questions or to discuss your findings with our experts, get in touch. And congratulations in taking the first step towards getting your organisation into share in 2019.