Organizational

Design
DR. PRATIBHA
 When to change the Organizational Design?

To reinforce the positive outcomes To resolve negative issues

• Inefficient workflows and redundant
 Faster execution of your strategy
processes
 Better customer service
• Lack of customer focus
 Increased profitability and reduced
• Lack of system, process, or outcome
operating costs
ownership
 Greater agility
• Delayed or ineffective decision making
 Greater efficiency and faster outputs
• Poorly defined or misattributed KPIs and
 A culture of committed and engaged
incentives
employees
• Mistrust between colleagues, teams, and
 Lower turnover and absenteeism
leaders
 A clear management and growth strategy
• Lack of effective problem solving
Principles of Organizational Design

There is no “best Start with a clearly The design answer is Organizational fit and
practice” defined strategy in the room integrity matter

Include both Technical and Social systems while working on

redesign
Approaches To Organizational Design which Should be Avoided
 nearly 60% of respondents in a recent study said they experienced a reorg in the last 2 years
 44% of them burning out before they’ve accomplished their objective.
 There may be plenty ways it can go wrong

1. Focusing only on the org chart

2. Relying on benchmarks or templates
It’s tempting to begin a design initiative by
focusing on technical systems
Each business must find its own path - one
by rearranging the org chart.
that is not KPI- centered alone, but that is also
Technical & Social both comprise the “work”
committed to focusing on every aspect
being organized.
growing.
Consider both
 Approaches To Organizational Design which Should be Avoided
3. Delegating the work
Leaders must be involved actively, it’s among
the most important work. The leadership
approach can make or break it’s success.
To create a cohesive, holistic design and
collaborative organization that’s geared
towards its overarching strategy, use a holistic
and collaborative approach to design it.
Leaders’ attitude and commitment is critical
to make it a reality.
4. Looking for the ‘smart’ answer
Smart answers are always tempting, but they
are rarely effective. While they look good on
paper, they don’t stand up to real-world
challenges.
Organizational design is about making tough
trade-offs and aligning leaders behind those
decisions.
Decisions shall be taken with full knowledge
of the consequences, and put measures in
place to limit downsides.
 Approaches To Organizational Design which Should be Avoided

5. Working in the wrong direction. 6. Not being willing to ‘pay now’

Business change comes in two flavors: pay-
Org charts should always be informed by
now or pay-later. By investing time, energy,
need, not the other way around. Designing an
and resources in design upfront, you’ll reap
organization to succeed always starts with the
significant dividends later through the change
desired end result — effectively delivering on
management and organization design
a strategy.
implementation process.
Instead of starting from where you are and
Visible, unified direction from leaders will
‘tweaking’ broken spots, evaluate how to
influence employee commitment and build
best serve your market and work backward
momentum toward a full and successful
from there
transition.
The Organization Design Process

• Design context and diagnosis

Step 1

• Strategic mandate
Step 2

• Strategic organization design

Step 3

• Operational + functional organizational design

Step 4

• Implementation and change management plan

Step 5
Step 1 - Design context and diagnosis

 Assess the business’ external environment.

 Includes any changes in customer needs, the regulatory landscape, competitor analysis,
etc.

 Assess and diagnose the business’ internal environment.

 Highlight areas where people, systems, or processes are not in line with the strategy and
identify the source of any issues.

 Establish leadership buy-in and direction.

 Leaders are best placed to diagnose, design, and orchestrate change. Without full, explicit
leadership buy-in, no change initiative can succeed.
Step 2 - Design context and diagnosis

 Set strategic priorities.

 How to achieve its mission and Vision
 Set operational priorities.
 The internal landscape of a business, and how it will support the overarching
strategy.
After it the design team shall be included and set program criteria and constraints.
Step 3 - Strategic organization design

 Current state alignment.

 Determine how the current internal landscape needs to change to meet step 2

 Develop and explore alternative models.

 Work with internal resources to find opportunities for improvement and test options.

 Locate work and categorize resource implications.

 Identify regulatory needs. Identify the organization roles and resources needed to complete each
work item.

 Evaluate and select the best-fit model.

 Explore candidate designs in-depth and identify the model that best fits the business’ objectives and
needs.
Step 4 - Operational + functional organizational design

 Develop groupings and linkages.

 Group roles into teams and departments and identify linkages needed to ensure all
necessary information- and workflows are present.
 Translate grouping to top-level org charts.
 Once the basic organizational design and structure is in place, groupings can be used to
produce a top-level org chart.
 Design a detailed governance framework.
 Structure and delineate management and leadership roles throughout the business,
including direct report responsibilities.
Step 5 - Implementation and change management plan

 Readiness and risk assessment.

 Change can be a painful and emotional process. Preparation thoroughly and identify
possible barriers.
 Build an implementation / transition plan.
 Once the team has identified all hurdles, it produces a holistic plan to move the business
from its current reality to the newly agreed design.
 Develop a communications strategy.
 People often feel threatened by change. A comprehensive communications strategy is
essential to get people on board and ensure a smooth transition
Preparing people to change

New
Hidden Occasional Quest for Holistic
Denial effective
Rejection leap of faith confidence Awareness
design
Preparing people to change
 A strong and inspiring vision
 Team-level involvement from day one
 Measurable quick wins
 Recognition that some aspects of the existing culture are worth saving
Who shall be involved in the process?

?
Review & Monitoring
 Prepare a schedule activity wise
 Include the expected gains/visible benefits
 Prepare plan B, run a pilot project
 Assign one PMO
 Share the benefits in larger forums
 Give confidence to teams
 Decide the review and monitoring duration and frequency
Thank you
QUESTIONS?