7 Components for Successfully Designing Your Organization
“8 Habits of Highly Successful Entrepreneurs”
April 29, 2016
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There comes a time in the lifespan of every organization when the price to stay the same outweighs the price to change; when the old ways of working are no longer sufficient or get in the way of growth. It is at this time that organizations, no matter their size, must examine the best organizational design for continued success. Moving from startup to established business, pursuing new markets, or assimilating a newly acquired company all represent an opportunity and a challenge for leaders.
When organization design is mentioned to many leaders, minds quickly jump to the organization chart — the “boxes and wires” of an organization. While this is one of the more tangible, visible parts of organization design, the process is about so much more than moving lines on paper, as simply changing reporting relationships rarely has a lasting impact on the way a company functions. In fact, you should leave the organization chart until the end of the design process.
Good organization design establishes new ways of operating, of relating to one another, of getting work done; it is fundamentally about using the architecture of the organization to translate business strategy into operational reality. And while this can feel daunting, creating a strong organization design does not require an army of consultants. An advisor with skills in this area can be useful, but is not required if leaders understand the basic components of organization design. Those components include:
Strategy — What is the business strategy you are trying to achieve? What are the main drivers for your company’s success?
Design criteria — What should the new operating model be capable of delivering? What criteria are needed to deliver on the strategy (capabilities, culture, etc.)? Finish the sentence: “The new operating model should…”
Current state — Define the “as-is” state of the company’s current customer experience, processes, decision-making flow, cost structure, state of technology, culture of the organization, structure of the organization, relationships among departments, current employee experience, existing strengths/skill gaps and behaviors being rewarded. One note: while the current state must always be a consideration when designing an organization, in some cases it is useful to approach the process as a “blank page” exercise, leaving the current state until the very end, as a starting point for design implementation.