In times of economic uncertainty, becoming leaner seems like the most logical thing to do. If you can cut the excess fat from your organizational structure, then the savings should follow. But it’s not as easy as that.
Needing to save 10% is likely not as simple as cutting your workforce by 10% while delivering on other company objectives. Likewise, if you need to increase production, adding bodies to deal with demand is often not the first thing you should do.
To make sure that your organization is running as efficiently and effectively as possible requires more forethought. You need to be able to clearly understand the short and long-term needs of the business, and then take a holistic view at the necessary components required to meet those needs.
The right view is one that looks at the structure of your organization, roles, and responsibilities and organizes and aligns them in the most efficient and effective structure. Focusing on scalability will enable you to develop a structure with long-term sustainability.
Where Senior Leaders Go Wrong
Implementing a dramatic shift like restructuring company roles and responsibilities is more than just moving a few boxes around a diagram and handing it off to HR to execute. You cannot design an organizational structure in a vacuum, without considering how it will impact the whole organization.
When organizational design is handled in this manner, what you often see is a breakdown between the strategic vision and its tactical execution. To get results and see value from organizational changes, there needs to be rigor around the process.
Building the Right Organizational Structure
Creating the right organizational structure is a disciplined exercise that requires a robust process and methodology to ensure its success. With the appropriate infrastructure in place, matching the right people to the right roles becomes a lot easier. However, it’s important to note that developing your organizational structure is not a “set it and forget it” task that can be passed off to someone else to manage.
As a senior leader, you need to take ownership of the process to oversee the successful adoption of the new structure. Ultimately, this requires consistent communication, training, and feedback to ensure that the organization aligns with the company’s strategic vision and delivers the intended results. To that end, here are the components needed to achieve success:
- Understand the strategic outcomes the organization is trying to achieve
- Identify the capabilities, skillsets, roles, and capacity, needed to obtain strategic outcomes
- Apply a disciplined approach to develop the right structure
- Map current roles to the new structure to identify gaps
- Collaborate with HR to fill those gaps
- Proactively identify potential barriers and risks to effective implementation
- Develop a communication and transition plan that holds leaders at all levels accountable for the adoption of the new organizational structure
- Obtain feedback to make iterative changes to the structure
By taking a process-driven approach to the organization’s design, companies are better able to have an organization that scales for good times and lean times. It’s not just about efficiency but effectiveness and sustainability.
However, building a scalable, nimble organization does not end with the right structure. It must be properly communicated to your people, so they have a clear understanding of what is expected of them. It’s senior leadership’s responsibility to tie the overall company objectives to each department’s goals and individual responsibilities. In this manner, your people can see the value in the work they do, and that is how you make real change happen.
This is often the point of failure for successful organizational change. Without effective communication and accountability, people are left wondering what is expected of them. They are unable to tell the difference between the current state and the intended future state. Since no one knows what is happening and why, they fall back to doing what they are most comfortable doing. Not only does this cause frustration, but it holds companies back from gaining the intended outcome from the new structure.
Adopting the Right Mindset
The bottom line? There is value in the time and effort it takes to impactfully design an organization that can scale up or down depending on company needs. But this can only be accomplished if it’s treated like a discipline and not an exercise of moving boxes around an org chart. At the end of the day, it’s your organization, and you need to ensure that it’s designed in the way that is going to best accomplish the company’s goals. After all, your success is dependent on your organization firing on all cylinders.
Interested in learning more? Explore the possibilities with Myrtle Consulting Group’s approach to organizational design and implementation.
Sharlene Evans has over 20 years of experience in consulting, having served as a Practice Leader with expertise in Organization Strategy and Design, Change Management, Leadership Development, Performance Management, and Process and Operational Improvement. Sharlene has worked with clients across multiple industries to identify and address people and organization levers to support the achievement of business objectives, often through supporting the execution of large-scale improvement projects across complex, multi-site organizations. Immediately prior to joining Myrtle,Sharlene was Vice-President, People and Organization, at SSA& Company. Her consulting experience also includes Hitachi Consulting, Celerant Consulting, and Ernst & Young Consulting.