Simplify The Science: Removing The Complications Behind Org. Design

It’s hard to find anyone who hasn’t had the wind knocked out of them by it: the ‘ole reengineering, right sizing, restructuring, downsizing, reorganization or transformation. I could hold a contest for the best name for it, but HR/OD folks know it as organization restructuring. In itself, there’s nothing wrong with it. Organizations outlive their structure when the business strategy changes and the structure doesn’t support the new strategy, creating the need for a change. Problems that arise usually stem from how the new structure is determined and implemented. Many companies I work with are still picking up the pieces of failed restructurings, some years later. Surprisingly, these have one thing in common, and I’m betting a lot can be learned from that. Organizational design is one of those areas with a lot of confusion swirling around it. The psychology folks say it’s a science, but I have a hard time articulating exactly what that science is. They just want to be involved. Human resource leaders wish their generalists were good at it and often end up pulling rank and getting involved at the last minute. Generalists try to figure it out on the fly when their clients need it. To add to the confusion are a multitude of books describing various structures and volumes of proverbial science on how to organize boxes on a chart. In the end, it’s seldom done well and often done by a couple of HR folks behind a closed door with the leader of the organization being redesigned.

When the structure is built, the small group attempts to sell it to the organization. But sold or not, their structure gets implemented and the organization is left to figure out how to make it work (or not work). That’s what the companies still picking up pieces have in common – a great example of what not to do. In the best case, a really strong culture (and I’m talking about the kind with cheers and cool-aid) will cause employees to rally around it, create work-arounds and work long hours to make broken processes work. In the worst case, it just doesn’t…and in a few months, they reorganize again when a new leader is brought in. Bad organizational design isn’t good for leaders at all.

For organizational design to work, science or not, a few things must happen. It’s not voodoo magic – it’s simple common sense. The goal of any organization’s restructuring needs to be to create a framework that is implementable, efficient and sustainable over time as the business evolves. Organizational structure change is hard – doing it often is reckless because it tends to wreak havoc on productivity, even when done smoothly. Here are a few guidelines that will increase the odds of your organizational designs being implemented smoothly and sustaining themselves longer:

• Organizational design is a collaborative process. Involve as many stakeholders as you can. A group of 10-15 key leaders is ideal for a group session, but be sure to include input from customers, team members, suppliers, and employees at all levels. This will require an element of transparency.
• Start with the customer. Understand who that is, what they need from the organization, and how they want to interface with you for them to be most effective. This may determine whether you are designed by product, solution, verticals, line of business, etc. Think hard about how complicated (or simple) you are to do business with. Doing this as a group is incredibly eye-opening and will result in alignment and learning for all involved. I promise!
• Focus on the work. Get clear and granular about the work the organization performs and the processes it takes to perform that work. Take people out of this discussion and think about tasks, buckets of work and try to anticipate what will likely be required in the future. Consider where key business processes begin and end to ensure that interfaces with other departments work.
• Align with your business strategy and any anticipated business changes or drivers.
• Gather and create guidelines by which you will measure proposed structures. This should be done during the above conversations as you identify things the organization ‘must have’ or can’t live with.
• Only after there is shared understanding of the above, design proposed structures.

What are the biggest obstacles you’ve faced when working on your organization’s restructuring?

These are the concepts LeaderShift Authentic Insights, Inc. has built into our RapidOD process. For more information or to schedule an organizational design session or workshop for your generalists, please contact us.