Organisation Design : Our 10 top tips

organisation design consultancy planning

In the first of our 2022 blogs we are sharing our knowledge and experience on the do’s and don’ts of organisation design. Our insight will help you to avoid the common pitfalls and maximise the benefits that organisation design can have, such as faster decision making, improved efficiency, enhanced employee performance and better communication.

organisation design consultancy planning

What is Organisation Design and what drives the need to look at it?

‘Organisation design is the review of what an organisation wants and needs, an analysis of the gap between its current state and where it wants to be in future, and the design of organisational practices that will bridge that gap’ (CIPD).

Reasons why Organisation Design is more important than ever

The past 2 years have highlighted just how volatile the external environment can be and of the consequences for businesses and individuals right across the globe. Whilst shifts such as the pandemic, Brexit and focus on the climate have heightened impacts, working with uncertainty and complexity is nothing new.

The acronym VUCA (which stands for Volatility, Uncertainty, Complexity and Ambiguity), describes a scenario where constant, unpredictable change is the new norm.
Rather than VUCA only applying to certain industries, it is now relevant to all businesses due to the challenges that are being faced into as a result of the global pandemic, Brexit and other significant influences. As a business leader this means you may need to re-assess how you are set-up, when and how you make decisions and your approach to day to day working. Your organisation design is a key element of this.

vuca

Why now is the time to shore up your Organisation Design

As we transition into 2022, your business is likely to have been positively or negatively impacted during the past 2 years and you may be reflecting on how to reset and plan for the future.  In the face of so much uncertainty, you may be wondering how you can use organisation design, as part of a more holistic response, to build an organisation with the resilience it now needs. 

There could be many reasons why now is the time to shore up your organisation design, such as:

  • Reducing Coordination Load – Handling the coordination load could be very significant for all employees, especially leaders, particularly with more people now working remotely.  Simplifying your structure to reduce the coordination load and handoffs will increase the time available for task-based activity and delivery.
  • Resetting your strategy – if you have had to diversify or quickly change direction to respond to changing demand, now might be the time to take a step back and review your wider business strategy and ensure that your organisation design supports this.
  • Right-sizing – Should a recession follow the pandemic and your organisation is impacted, you may need to right-size.  While a shrinkage of up to 15% may only require minimal changes to a structure, beyond this there would be more fundamental impacts requiring a more holistic review of your organisation design.
  • Building Resilience – Duration of the pandemic and unpredictability associated with this demonstrates that building resilience into your organisation design is vital.  If your structure has tight interdependencies between processes or teams a disruption in one area could ripple through the entire business.

Drawing on over 40 years business experience, we are sharing our top 10 tips for organisation design to demystify the process and support your thinking if this is the right option for your business.

Tip 1: Future proof your design

Any organisation change activity should be in pursuit of your vision and strategy.  To future proof your organisation design, consider not just what you need to achieve now but also the direction your business is heading (or could head) in the future and ensure you plan for that 

You need to have a full awareness of what is in place today, what is working well and not so well, but your thinking on what is required for the future should not be constrained by this. 

In thinking about the future, it is important to have clarity on what outcomes you are setting out to achieve whether that be in the short, medium or long-term.  Putting in place clear outcomes and their associated measures will help you to track progress. 

Finally, setting some good practice design principles, such as process handoffs or spans and layers, sets a framework to guide decisions as you are progressing through the design process.

Tip 2: Go broad, not narrow

In addition to being clear on what you’re trying to achieve from the outset, it’s important to consider the wider design and how your structure fits within that.  It would be unusual for a particular part of an organisation to sit in isolation, since processes, systems and work will generally flow between teams. 

Taking a more holistic approach and finding out what other change or organisation design projects are underway across the organisation will enable you to identify synergies and opportunities to de-duplicate, thereby creating an optimised design.

Finally, in a world where change is constant, keep one eye on the external environment and design in agility with consideration of where decisions are made about organising the work and people to best achieve your goals.

Tip 3: Don’t just focus on cost

Organisations that restructure as a result of a reduced budget may focus on structure and headcount changes only, however there may be alternative interventions that could achieve a similar result with less upheaval and risk.  

To be successful you need to consider the performance, reward and cultural changes required to embed the new ways of working resulting from the restructure.  Failing to do so could lead to you needing further re-design activity, which could mean more cost, disengaged employees and reputational damage. 

In addition, consider your current workforce profile against the skills and capabilities that you think you will need in the future and build an action plan to address any gaps.

Tip 4: Build the right implementation team

It’s important to have a combination of design, development and change capability in your implementation team.  Without this, organisation change activity may stall if local teams are not equipped to deliver the changes due to a lack of expertise or operational requirements taking priority.  

Our unique blend of skills and experience enables us to partner with you to create an optimised design with consideration of how people and processes will work across your structures and systems.  We can also help you plan and deliver the changes needed ensuring change-readiness, particularly for your leaders, who are key to ensuring your people are supported and set up for success.  

Tip 5: Adopt a collaborative approach

Whilst we have already noted the importance of a skilled implementation team, it is equally important for this team to not hide in a darkened room and then reveal their plans with a fanfare.  

Involving those affected from the outset can help you to co-design a fit for purpose organisation.  Bringing everyone with you through the change takes planning, and adopting an approach that will work in your business.  

Engaging key stakeholders such as Trade Union representatives or employee representative groups from the outset, or creating change advocates from your talent pool, will help to drive the changes you want to see in the organisation. 

Tip 6: Don’t be tempted to cut corners to speed things up

We recognise that organisations need to constantly adapt in order to survive and flourish and while change, if done well, can feel energising and productive; done badly, it can feel confrontational and difficult.  

Building good practice consultation in from the outset will not only ensure that you meet your legal obligations, it will provide healthy debate to challenge and influence your thinking as well as demonstrating to your people (irrespective of whether they are impacted or not) that the process is fair and transparent.

In the long run, cutting corners is an ill-advised false economy with inherent risk, including breaching your legal obligations, creating the wrong impression to Trade Unions and employees; costing you time and money and with the potential to negatively impact your brand and reputation.

Tip 7: Authentic Leadership is critical

The role of leaders is critical in any successful change delivery, so you need to avoid them feeling like the change is being done to them.  

Leaders need to be bought into the rationale for the change and authentic through their informal dialogue and change communications to be able to inspire people and mitigate the consequences of their resistance to change.

By talking about the change in their everyday messages and building it into everything they do, from the way they manage their department to the way they set their strategic ambitions for the future, they will take their teams with them.  Remember, people follow leaders more than strategy. 

As experienced leaders ourselves, we’ll work in partnership with you to equip you to manage your change with confidence.

Tip 8: Communicate, Communicate, Communicate

Communication will help people make sense of what is going on and minimise employee resistance.  It is vital to take your people on the journey with you by being honest about what you are doing and why.  If your employees understand and buy into the rationale for the change, you will minimise the cost associated with change delivery and maximise the effectiveness of the change effort. 

Manage internal communications with empathy.  Put simply, imagine yourself in your employees’ shoes.  Tailoring engagement to teams about the nature of the change and the rationale supporting the proposal is key to minimising negative employee reactions and maximising employee excitement and advocacy of the vision.  

With the pandemic came the benefit for many of working remotely, however a downside of this is the more often employees work remotely the more likely they are to miss out on informal communications, which means employee groups could form different understanding or meaning regarding company decisions and communications.  Leaders need to work together to form a helicopter view of what is happening and address this by using a variety of communication approaches, not just top-down cascades. This approach also gives your people the opportunity to ask questions, engage and possibly shape the change.

Tip 9: Remember a change is not just for Christmas

The impact and value of the change needs to be monitored to understand whether the goals and benefits envisaged at the start of the change process have been achieved.  

Just because you have ended any formal change process, it does not mean the change is done and behind you; what has been delivered are the foundations that should enable you to build for the future. Too many times, we have witnessed organisations delivering a change and then 1, 2 or 3 years later being back to square one! 

In order to gauge the success of your change, you may need to put in place new measures to track progress in the short and longer term such as customer satisfaction, employee engagement or process completion times. 

Also remember, in today’s dynamic world it would be unrealistic to expect that a design is implemented exactly as it was intended.  It may need iterating and tweaking as (internal and external) factors change and as you learn about what works…..and what doesn’t!

Tip 10: Make the change stick

Leaders and change advocates play one of the most critical roles to drive lasting change.  As a leader you need to gauge how your people are responding and support them in letting go of the old world and being confident in the new ways of working.  

Change activity shouldn’t just stop when the change goes live.  The changes you would like to see need to be translated into frameworks, systems and processes at an individual level across the organisation to drive and embed new behaviours.

Change takes time.  In the early days post go-live, identifying and celebrating quick wins will maintain momentum.  Sharing stories of how the new ways of working have positively impacted different groups, such as customers, suppliers and internal teams will drive up employee advocacy of the change.  

How we can support you

We hope that sharing this blog has helped to inform your thinking.  If you’d like to find out more or have an initial discussion on how we might be able to support you, please get in touch.

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