Organization Design: What can leaders do to ensure success in a reorganization?
Undertaking a reorganization comes with a degree of risk. Once you have decided it is time to look at a new organization design there are several steps you can take as leader to improve the likelihood of a successful outcome.
Know what you want to accomplish
For the organization
Be clear on what you want to achieve for you and your organization. For many leaders there is a frustration with the organization’s ability to execute the business plan and operate at a level that will propel the organization forward. Identify the issues that are interfering with performance and what success will look like in undertaking a reorganization. From alignment to strategy, faster execution, reducing the cost structure to preparing future leaders, there are numerous goals that reorganization could deliver – be clear on what you’re looking to accomplish.
For you personally
One of the key frustrations of many leaders is being pulled into problem-solving or decision-making that should happened lower in the organization. Leaders often identify the desire to change how they work by pulling their roles up through work redesign and improved delegation. Having a clear picture in your mind of how you can personally benefit in your role will help keep you focused on the journey and the outcomes you desire.
Be seen as leading the initiative
As the accountable leader (CEO, President, etc.), organization design is a key lever you have at your disposal to enable delivery of the strategy, shape the culture, and create reliable performance in the organization. To ensure success as you undertake a reorganization it is important to be seen actively leading and participating in this initiative. While much of the day-to-day work can be delegated, a successful reorganization requires you to actively participate in establishing the project, communicating to your team, and making timely decisions at critical points throughout the process, so that your senior leadership team sees that the reorganization is a priority to you and the organization. Being visible throughout this process signals to the organization that this work is a priority for you and the organization and that you are committed to a successful outcome. Team members are always watching to see if actions are aligned with words. Your active commitment will ensure your management team is appropriately engaged in the process.
Apply organization design principles to improve outcomes and reduce risk
Organization design has a significant impact on performance, effectiveness, and efficiency of the organization. It is a key driver of employee engagement, and it is foundational to effective talent management and succession planning. Good organization design supports value creation–poor organization design can result in the destruction of value. Applying basic organization design principles enables the leader to take the guess work out of organization design and establishes the conditions for highly reliable performance within their organization.
Treat the reorganization as a change project
Unless you are starting from a clean sheet of paper (establishing a new organization with new people) in all likelihood there are a number of employees who must transition to a new way of operating. You likely have a picture in your mind of what the outcome should be—but what is clear in your mind is unknown to most employees. You are (most likely) undertaking a major shift from what exists today to implement a new way of thinking about work and structure for the business. A key challenge is bringing your employees on that journey so that they can engage with you in bringing your vision to life. When people are not clear on what needs to change, the pace of organizational transformation slows down. A solid case for change provides managerial leaders with the context necessary to embrace and support organizational change.
Engage the team
How you engage the team is different for every situation and can range from high involvement of the entire management team to only involving those who must be in the know. Factors include scope of the change required, confidence in the current team members’ ability to make a shift to a new mode of operating, understanding of root cause issues, and how quickly the reorganization needs to be completed. The bottom line is the better informed those who are involved are the more successful the initiative will be.
Be willing to make the tough decisions
One of the challenges for any leader is to make tough decisions affecting their organizations and to be seen as taking necessary action. No one will fault a leader for making decisions necessary to move the organization ahead. Tough decisions will need to be made about people, sacred cows, things managerial leaders need to start doing, and things they need to stop doing. If you undertake the critical work of reorganizing, there will be an expectation among employees that you will deal with these issues that negatively impact performance as part of the reorganization. Remember leaders are closely watched. What you say and do is analyzed by team members across the organization. If a leader is willing to make the necessary hard decisions the reorganization will receive the support of the management team. Failure to address issues inhibiting performance will signal business as usual and the employee base will not make the transitions that are required of them in the reorganization.
Implement the new organization design
Once the design work is complete implement the new organization structure. Implementation takes the organization design and brings it to life by ensuring the right people are established in the right roles, fully equipped to do the right work. These activities are critical in establishing a clear understanding of work and roles for the people who will fill/occupy and rapidly launch the new organization. Your decision to implement the new organization structure will set the foundation for establishing accountability and authority across the entire management team and developing the foundation for the establishment of a trust enhancing accountability culture.
Undertaking an implementation process will eliminate months of spinning, trial and error, and conflict. Individuals do not have to learn on their own how the organization is designed to work, or who they would need to partner with to accomplish their goals. To focus the entire organization on the work necessary to deliver the strategy, accelerates execution of the strategy and engages all employees by understanding how their efforts contribute to the goals of the organization.
By taking an active lead in the reorganization you will be able to look at the organization structure and people occupying roles and be confident that this team will deliver the strategy.
This blog is part of our ongoing series Organizations that Work. To see all of the blogs in the series that have been posted so far, click here.
Every Tuesday over the next few months, we will be posting blogs that take you from the pain of poor organization design, to identifying the root causes, to the benefits of undertaking strategic organization review. We will discuss the steps needed to effectively align your structure and work with your strategy, and we’ll discuss the processes that take out the guess work and help you to get it done. Through it all we will discuss how to lead the change from start to finish.
If you’d like to speak with us about how we can help you on your journey to an organization that works, please follow us on LinkedIn or book a call directly with one of our partners.
Our approach draws on several bodies of work including Stratified Systems Theory, the work of Dr. Elliott Jaques. For more on Dr. Jaques and his work visit the Requisite Organization International Institute at ROII Requisite – ROII Requisite.