Org design is super important for business leaders if you want your company to do well, in this article we talk about unlocking the secrets of strategic org design and share them with you. It’s all about making sure your structure, processes, systems, and culture all work together to help you achieve your goals.
Nowadays, companies that innovate do well, and businesses need to be able to keep up.
To do that, you need to have a good plan for your organisational design that fits with what you’re trying to do and what the competition is up to.
By learning about the best ways to design your organisation, you can make smart choices that will help you succeed and make everyone happy.
In this piece, we’ll talk about the most important things you need to know to design your organisation well, and give you loads of tips and ideas to help you get it right.
If you’re a CEO, HR person, or consultant, or someone looking to develop in the Org Design space this should be for you!
What is Organisational Design
Organisational design refers to the process of structuring an organisation’s systems, processes, roles, and responsibilities to achieve its goals and objectives effectively. It involves analysing an organisation’s current structure, identifying any gaps or inefficiencies, and developing a new structure or plan to optimise performance.
Organisational design typically includes determining the organisation’s hierarchy, identifying reporting relationships, defining roles and responsibilities, establishing communication and decision-making processes, and aligning resources and systems to support the organisation’s objectives. The goal is to create a structure that supports the organisation’s strategy and enables it to achieve its goals efficiently and effectively. Organisational design is often an iterative process that involves ongoing evaluation and adjustment to ensure that the organisation remains aligned with its objectives and adapts to changes in the environment.
How is org design related to organisational development?
Organisational design and organisational development are closely related concepts, as both aim to improve the performance of an organisation. However, they differ in their approach and focus.
Organisational design focuses on the structural aspects of an organisation, such as its hierarchy, roles, and reporting relationships. Its goal is to create a structure that supports the organisation’s strategy and enables it to achieve its objectives efficiently and effectively.
On the other hand, organisational development (OD) focuses on the people and culture of an organisation. OD aims to improve the effectiveness of the organisation by enhancing its culture, leadership, communication, and collaboration. It involves interventions that target the human side of the organisation to improve performance.
Organisational design and organisational development often go hand-in-hand. For example, if an organisation is implementing a new strategy, it may need to restructure its hierarchy and roles to align with the new direction.
At the same time, it may also need to work on improving its culture and leadership to ensure that the new structure is effective. Therefore, organisational design and organisational development are often used together to create a holistic approach to improving an organisation’s performance.
How can org design fit in to an overall hr transformation programme?
Organisational design can play a crucial role in an overall HR transformation program. HR transformation typically involves changing the way an organisation manages its human resources to improve its performance and create value.
Organisational design is an essential component of this process, as it can help align the organisation’s structure, roles, and processes with its HR strategy.
Here are some ways that organisational design can fit into an overall HR transformation program:
- Aligning structure with strategy: Organisational design can help align the structure of the organisation with its HR strategy. For example, if the organisation’s strategy is to focus on innovation, the structure should be designed to facilitate collaboration and knowledge sharing.
- Streamlining processes: Organisational design can help streamline HR processes, such as recruitment, performance management, and talent development. By designing efficient processes that eliminate redundancies and improve communication, HR can be more effective in achieving its objectives.
- Redefining roles and responsibilities: Organisational design can help redefine roles and responsibilities to align with the organisation’s HR strategy. This can include creating new roles, eliminating redundant roles, or merging roles to create more efficient and effective HR functions.
- Implementing new HR technologies: Organisational design can also help facilitate the implementation of new HR technologies, such as HR information systems, talent management software, and e-learning platforms. By designing a structure that supports the use of these technologies, HR can more effectively leverage them to achieve its objectives.
Here are some of the challenges organisations face with regards to poor organisational design:
- Overlapping roles and responsibilities: When there are multiple individuals or departments responsible for the same function or task, it can lead to confusion, duplication of efforts, and inefficiencies.
- Hierarchies that are too complex: When an organisation has too many layers of management or too many reporting lines, decision-making can become slow and bureaucratic. This can lead to delays, missed opportunities, and a lack of agility.
- Siloed departments: When departments or teams work in isolation, it can result in poor communication, lack of collaboration, and a lack of knowledge-sharing. This can lead to missed opportunities and hinder innovation.
- Lack of alignment with strategy: When an organisation’s structure, roles, and processes are not aligned with its strategic objectives, it can lead to confusion and a lack of focus. This can make it difficult to achieve the organisation’s goals and objectives.
- Inefficient workflows: When workflows are poorly designed or not optimised, it can lead to bottlenecks, delays, and missed deadlines. This can negatively impact the organisation’s performance and lead to frustration among employees.
- Poor communication: When communication channels are unclear or ineffective, it can lead to misunderstandings, missed deadlines, and a lack of coordination. This can negatively impact productivity and the quality of work.
Which companies have suffered from poor strategic org design?
- Enron: Enron was an energy company that collapsed in 2001 due to a range of factors, including poor organisational design. The company had a complex structure with multiple subsidiaries, which made it difficult to understand the company’s finances. Additionally, the company had a culture of excessive risk-taking and unethical behaviour, which ultimately led to its downfall.
- Blockbuster: Blockbuster was a video rental company that was once a dominant player in the industry. However, the company failed to adapt to changing consumer behaviour, such as the rise of streaming services like Netflix. Blockbuster’s organisational design was slow to respond to changes in the industry, which ultimately led to its decline.
- Kodak: Kodak was a leader in the photography industry for many years, but the company struggled to adapt to the rise of digital photography. Kodak’s organisational design was slow to respond to changes in the industry, which ultimately led to its decline.
How can a company think strategically about org design?
The first step is to define the company’s strategy, which should include the mission, vision, values, and goals. As well as the competitive landscape and market trends.
The strategy should be communicated throughout the organisation, so that everyone understands the direction in which the company is headed.
To think strategically about organisational design, a company can take the following steps:
- Analyse the current organisational structure: The next step is to analyse the company’s current organisational structure, including roles and responsibilities, reporting lines, and decision-making processes. This analysis can help identify areas of inefficiency, duplication of effort, or misalignment with the business strategy.
- Define the desired outcomes: Based on the analysis, the company can define the desired outcomes of the organisational design process. This includes identifying the key objectives, such as improving efficiency, increasing agility, or enhancing collaboration.
- Develop a plan: With the desired outcomes in mind, the company can develop a plan for the organisational design process. This includes defining the new structure, roles, and responsibilities, as well as the process for implementing the changes.
- Communicate the changes: It is important to communicate the changes to all stakeholders, including employees, customers, and partners. This can help ensure that everyone understands the rationale for the changes and is aligned with the new organisational structure.
- Monitor and adjust: Finally, the company should monitor the effectiveness of the new organisational design and make adjustments as needed. This includes tracking key performance metrics, soliciting feedback from employees and customers, and making changes to the structure or processes as needed.
How can I develop my career in to specialising in org design?
Developing a career in organisational design can be a rewarding and challenging path. Here are some steps you can take to specialise in organisational design:
- Gain education and training: Pursuing a degree in organisational design, organisational development, or a related field can provide you with a solid foundation of knowledge and skills.
- Get hands-on experience: Seek out opportunities to gain practical experience in organisational design. This can include internships, volunteer work, or positions in HR, consulting, or related fields.
- Build a network: Networking is an essential component of any career. Attend industry events, join professional organisations, and connect with experts in the field to build relationships and gain insights.
- Develop key skills: Successful organisational designers typically have a combination of skills, including strategic thinking, problem-solving, communication, and project management. Continuously developing and honing these skills can help you succeed in this field.
- Stay up-to-date: Organisational design is a constantly evolving field, and it is essential to stay up-to-date on the latest trends and best practices. Read industry publications, attend conferences and webinars, and participate in professional development opportunities.
- Consider certification: Earning a certification in organisational design or a related field can demonstrate your expertise and commitment to the profession. Examples include the Diploma in Organisational Development and the business schools such as Henley and Roffey Park both offer specific Org Design certifications.
What is the potential career path as an organisation design professional?
- Entry-level positions: Entry-level positions in organisational design may include roles such as organisational development coordinator or analyst. These positions typically involve supporting more senior team members in conducting research, analysing data, and developing recommendations for organisational design changes.
- Mid-level positions: Mid-level positions in organisational design may include roles such as organisational design manager or consultant. These positions typically involve leading projects to develop and implement new organisational structures, processes, and systems. Mid-level professionals may also be responsible for managing project teams and collaborating with other departments and stakeholders.
- Senior-level positions: Senior-level positions in organisational design may include roles such as chief organisational design officer or executive director of organisational effectiveness. These positions typically involve leading the design and implementation of organisational strategies, and providing guidance and support to other departments and leaders. Senior-level professionals may also be responsible for developing and managing budgets, overseeing multiple projects, and providing strategic advice to the executive team.
- Independent consultant: Experienced organisational design professionals may choose to work as independent consultants. This may involve working with multiple clients, developing customised solutions to meet their needs, and managing their own business operations.
Which consulting firms provide organisation design services?
- McKinsey & Company: McKinsey & Company is a global management consulting firm that offers organisational design services as part of its organisational and business model transformation practice.
- Bain & Company: Bain & Company is a global management consulting firm that offers organisational design services as part of its organisation practice.
- Boston Consulting Group (BCG): BCG is a global management consulting firm that offers organisational design services as part of its organisational transformation practice.
- Deloitte: Deloitte is a global consulting firm that offers organisational design services as part of its human capital practice.
- Korn Ferry: Korn Ferry is a global organisational consulting firm that offers organisational design services as part of its organisational strategy practice.
- PwC: PwC is a global professional services firm that offers organisational design services as part of its organisational effectiveness practice.
- Accenture: Accenture is a global consulting firm that offers organisational design services as part of its organisation and talent practice.
There are also many smaller specialist boutique consultancies based in the UK that offer organisational design services. Some examples include:
- Q5 is an organisational design consultancy. It is a global management consulting firm that specialises in organisational strategy, design, and transformation.
- LACE Partners: LACE Partners was founded by Aaron Alburey and Cathy Acratopulo, who wanted to create a business that could provide a full-service consultancy for HR professionals.
- On the Mark: OTM is a leader in collaborative organisation design and operating model modernisations.
- Chaucer: Chaucer is a London-based consultancy that specialises in organisational design, change management, and program management.
Here are some top tips to effectively land an organisational design project:
- Understand the client’s needs: Before pitching an org design project, it’s important to understand the client’s specific needs, goals, and challenges. Conduct research on the organisation, its industry, and its competitive landscape, and use this information to tailor your proposal to the client’s specific situation.
- Develop a clear value proposition: In your proposal, clearly articulate the value proposition of your organisational design services and explain how they will help the client achieve their objectives. Use case studies or examples of previous successful projects to illustrate the benefits of your approach.
- Demonstrate expertise and experience: To build credibility with the client, demonstrate your expertise and experience in organisational design. Highlight your qualifications, certifications, and relevant experience, and provide references from previous clients or colleagues who can attest to your skills and capabilities.
- Build a strong project team: Organisational design projects require a multidisciplinary team with expertise in areas such as change management, human resources, and technology. Assemble a strong project team with a range of skills and experiences, and clearly outline the roles and responsibilities of each team member in your proposal.
- Develop a detailed project plan: In your proposal, develop a detailed project plan that outlines the scope of the project, the timeline, and the deliverables. Be sure to include regular check-ins and progress reports to ensure that the project stays on track and that the client’s needs are met.
- Communicate regularly with the client: Throughout the project, maintain regular communication so they are updated on progress. Being responsive and proactive in your communication can help build trust and strengthen the client relationship.
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