What is an organizational structure design? An organizational structure design or redesign is a comprehensive and evaluative process that occurs within the context of the culture, environment, business model, strategy, services, organizational goals and systems. It is led by dialogue and support for interventions that will take the team where they need to go to achieve improved and/or streamlined efficiencies, productivity, effectiveness, quality and services.
Want to Modify Your Organizational Structure?
If you are considering this initiative, you should understand that doing so requires way more than simply shaping or changing a bunch of boxes, lines and charts (by way of just moving people around and adjusting staffing lines on an organizational chart). The most effective organizational leaders and senior human resources executives know this.
The effort and process require committed leadership who demonstrate an inclination for systems and strategic thinking. It involves an integrated and comprehensive process which is summarized below.
Want to Proceed with a Reorganization or Redesign?
To start, when an organizational structure, restructure or redesign process begins, it is not simply a question of which structure you should design (matrix, functional, process, network, customer-centric or divisional). It should be a question of which structure will actually support the organization’s size, strategy and systems within the context of its environment, technologies, culture and people. The solutions and processes should be designed to help executives and leaders prepare for and respond to dynamic and fluid environments and technologies.
First, diagnose and analyze the current structure to determine whether it or another design best positions the organization to compete and provide streamlined services for both internal and external stakeholders, support continual growth, and realize the mission.
Eight (8) Core Elements of a Thorough Organizational Structure Design or Redesign Process:
1. Communicate across boundaries.
Complete a full-scale structure, efficiency, culture, situational, and environmental study and assessment. Don’t assume the current structure is not the appropriate one without delving into the catalyst for any proposed change. Effectiveness is achieved when leaders promote dialogue and collaboration across units, departments, and divisions that leads to real understanding of how value is created and where inefficiencies exist.
2. Solidify your competitive advantage.
Determine what factors impede or advance your competitive or differentiated advantage. When an organization is able to identify, understand, and integrate its competencies and resources and transform inputs into outputs and outcomes that its stakeholders or customers want, it is able to build a competitive advantage and differentiate its services so as to generate value.
3. Evaluate the strengths and weaknesses of options.
Review and differentiate between mechanistic and organic systems and apply the structure that helps to that best supports your organization, its culture, information sharing, workflow, interactions and social relations and application of core competencies. Will a simple, functional, divisional, team-based, matrix, or some other structural form work best and why?
4. Assess interconnections and linking mechanisms.
Once you have settled on a preferred structure, determine and evaluate the linking mechanisms, interdependencies, and transaction costs and distinguish them (symbiotic or competitive) to allocate resources appropriately.
5. Align business processes & effectively utilize technology.
Evaluate business systems and processes against performance objectives, goal achievement and time demands. If a performance management and measurement system has not already been devised, it would be best to establish at least the metrics for this initiative prior to any large-scale reorganization. If there is already an established performance system in place, be sure to integrate the metrics with desired outcomes of this effort.
6. Reduce and/or eliminate service duplication via a gap analysis.
This involves reconciling staffing workloads and analyzing competencies, tasks, and activities against services, technologies, and people to determine gaps, duplication of efforts, and alignment – determine what level people and departments should function as opposed to where they are functioning.
7. Establish decision protocols.
Develop a decision-priority matrix and measure it against strategic priorities, communication boundaries and service delivery. Will decision making be centralized or decentralized; should it be organic or mechanistic?
Whichever structure you settle on, be sure it supports and advances the type of decision making culture you’d like to establish.
8. Predict span of control and properly position talent, staffing and workforce planning.
Review management spans of control and whether they should be revised to support task complexity and functions. Be careful not to overextend a supervisor’s ability to lead an effective team by appropriating too much staff or inappropriate functions under his/her authority and responsibility.
- When should a reorganization or redesign be performed?
- Under which circumstances should one not enter into this process?
- What additional elements would you add to the list?
CEO, ARVis Institute
International Speaker | Strategist | Management Consultant | Educator | Author