Customer expectations are not just changing; they are exceeding the ability of a business to deliver on time. They are looking for alternatives, with more emphasis on experience and convenience. To keep up, companies are evolving their offering to meet the changing needs of the market. The ability to deliver cutting-edge services to market is largely determined by your operating model (discussed in the previous article in this series) and your organisation design. When your services evolve, corresponding changes need to be reflected in your organisation design.
Change is happening rapidly; 80 percent of CEOs in a recent study claim to have transformations in place in their businesses, while 87 percent expect to see a change in their operating models within three years.
So, what is organisation design? It is the way organisations are structured and run the architecture of the organisation. Where are you going as an organisation, how are your processes set out, what does your operating model say, and how do you design the structures that will support this new operating model? It is essentially a ‘map of operations.’ It typically describes the location and/or configuration of all resources and capabilities in a business.
There are various organisational structures you can look at, however, choosing the best structure for your company, division, or team will depend on your strategy, business model and operating model. It is a lot like picking out a new car. At the most basic level, you are always looking for something road-worthy and something that can take you (and your passengers) from point A to point B without a hitch. But beyond that, there are a lot of options to consider. Automatic or manual? Four-wheel drive or two? Built-in GPS? Leather interior?
An organisational structure is a visual diagram of a company that describes what employees do, whom they report to, and how decisions are made across the business. Yet it is not simply drawing boxes and lines and matching people to those boxes – you need to design it and test it. It will take a few attempts to identify the right structure and it will never be done in isolation; involving leaders and human capital is crucial to ensure understanding and buy-in of the design.
Selecting the right structure is just the start of the architecture process. It is here where we determine the shape and size of the organisation, value of the jobs, grading frameworks and methodologies, career pathing and workforce planning. With the architecture in place, it is time to focus on the people and matching them back into the jobs and structures based on their capabilities, competencies, and knowledge. During this exercise, we reshuffle the organisation and ensure the right people are in the right jobs at the right time, and where individuals don’t fit, we explore opportunities to upskill or reskill in line with the new capabilities for the organisation.
A number of organisations are looking at redesigning or reshuffling after COVID; everything has a ripple effect, so even for those who aren’t undertaking major redesigns, they will inevitably still need to tweak their structure as so much has changed since the start of 2020.
With great organisational change comes great responsibility. Therefore, in order to create sustainable growth, companies need to manage the risks in restructuring. Be transparent and communicate openly, share what you can but also tell employees what you can’t share and the reasons behind the decision to withhold information.
As with all change, it is the uncertainly and lack of knowledge that creates anxiety and stress. The best way to encourage sustainable change will be to involve your employees in establishing the new organisation.