What does organisation design set out to achieve?

Mar 01st

How to judge an organisation design: Part 1

“Welcome to the team. I’d appreciate your views on something straight away. Can you look over this org design? I’ve been thinking about if for some months. Let me know what you think and let’s talk about the questions you have. I’d like to take this to the management team in a couple of weeks”

Your boss/key internal client, accountable for an area of several hundred employees gives you a deck for an org design. Maybe it has introductory slides, an organisation design logic, a business case and an implementation pathway, maybe it’s just some org charts.

How do you start making sense of it? What questions can you ask of what you have been given and what questions, of the many you will have, are going to be most important in your next meeting?

Organisation design aims to increase flow – of work, of information, of decisions – and to increase responsiveness. Organisation design has to take account of space (from the local i.e. sites and branches and how they work, to the international) and, critically, of time (from day to day operations to multiyear strategic decisions).

First up start with the strategic questions about the reorganisation and its context.

What is the organisation design trying to achieve? What big questions is this organisation design the answer to? Is there a clear rationale and an explanation of what is different between this org design and what is currently in place?

Maybe there is an operating model behind the design. It might be informal or fully documented and signed off – but does it make sense? If there isn’t an operating model behind the design then ask the questions to build up a story of how work is done, how key organisational boundaries and relationships interface with this part of the business, how the area delivers and drives its performance.

What organisation design principles have been applied? If they aren’t articulated, you need to draw them out in a conversation so that you can begin to confirm the rationale and logic of the choices that have been made in the design. Some principles may derive directly from the operating model, some may come from the wider organisation context and some may be more like rules of good design that have been applied.

What you want get at is an understanding of what is really driving the design and any choices or trade-offs that have been made. While people may list 20 design principles, in practice it is only feasible to drive a design from a handful of those, ones that derive from the business strategy. The rest of the principles may be hygiene factors, desirable features or rules. They don’t drive the design but how many are satisfied may be what helps frame or select options.

Step back from the design and use some common-sense questioning. If a key driver is, say, closeness to the customer, where does that show up in the design? And how does it show up differently from how things are now? If the strategy says drive for efficiency of execution, where do you see that in the changes to the design?

You are now closer to understanding if the design at the highest level hangs together and has been thought through – you can see how it makes sense, but does it stand up to some rigorous probing…we’ll come to that in Part 2 coming up soon.

JBJ