How To Tell If Your Organization Structure Will Drive Transformation

Outdated Organizational StructureIs Your Organizational Structure A Relic?

Was your Organizational Structure designed strategically or was it bolted together by necessity? Was the last structure change done when an executive shifted roles or to give someone a ‘stretch assignment’? Do the roles make sense in terms of why people are doing them (maybe someone had extra capacity or needed to learn a skill), but create confusion when new people join the company? Is your structure a result of the elimination of work (downsizing due to automation), a merger, or outsourcing? Most importantly, does your structure advance or hinder your ability to drive your strategy.

There are many drivers of ‘organization design changes’, but precious few of them address the fact that the vast majority of organizations are still organized around traditional themes: functions (HR, Legal, IT, Finance), geographic, product, customer segment, the dreaded ‘matrix’, etc. These structures were developed in the 1950’s and, in many cases, are still how we manage our businesses today, despite the fact that things have changed. Shifting people around these types of structures (and bolting on extra responsibility to those who either need or can handle it) could actually be cramping your ability to drive a competitive advantage.

Organizational Structure is Strategic. Is Yours?

All around us, every facet of business continues to undergo massive and disruptive change. The vast majority of organizations are in the midst of multiple business and digital transformation projects that are changing the core of their business. Everything from new business models, profound shifts in customer and employee experiences, new disruptors entering the market (Amazon, Uber, etc.) and most importantly, changes in how business activities and processes must be conducted.

Organizational Structure Must Deliberately Keep Pace with Change

Yet, in many places, organizational structure is left out as changes are made. We drive intentional business change and leave our structures based on thinking from the last century. The results are questionable. A result Gartner recently reported that ‘nearly one-half of all strategic initiatives (44 percent) are reported as unsuccessful.’ This does not include investments that delivered but missed the mark. Frequently, it is an antiquated organizational structure that prevents the benefits of major change from being realized once they are made.

Organizational Structure Checklist

Here is a quick checklist to determine if your structure is inhibiting profitable growth, keeping you from realizing all the benefits of transformation initiatives, and contributing to employee turnover. A “YES,” to any of following indicates a gap in your ability to successfully transform your organization.

Does it feel like leaders have hidden and often competing agendas?Yes/No
Is there a lack of leadership and organizational alignment (where leaders are either not clear or not aligned to what needs to be done next to drive the strategy OR the employees are unclear as to their role in delivering strategy)?Yes/No
Is there obvious competition for internal resources outside of the annual planning process?Yes/No
Are there non-strategic leaders in critical roles or are decisions elevated up (above where the work gets done) for approval? Yes/No
Is it difficult for the organization to leverage synergies? Do functions struggle to collaborate well?Yes/No
Do business transformation efforts often not yield the anticipated benefit?Yes/No
Are employees (especially millennials) frustrated with silos and lack of opportunities?Yes/No
Do silos STILL dominate the landscape?Yes/No

Would you like to figure out how being intentional about organization design can improve the results of every existing change and transformation initiative and ensure that the investments you are ALREADY making drive your strategy? Call us. It’s what we do. And it takes weeks, not months.

LeaderShift Insights® aligns structure, people and investments to drive strategy.