Organisation Design

Organisational design structures an organisation’s resources, processes and systems, enabling the organisation to achieve its goals. It involves designing a company’s organisational hierarchy, governance principles, roles and responsibilities, processes and culture to align with its mission, vision, values and overall strategy.

Organisational design’s purpose is to create a coherent, integrated system that ensures the right people are in the right roles and that the company follows effective decision-making processes. Its goal is to ensure that an organisation’s structure facilitates communication and collaboration.

The activities involved in organisational design vary. They may include assessing an organisation’s current structure and identifying areas for improvement, defining roles and responsibilities, developing governance mechanisms, designing processes and systems and creating a culture that supports the organisation’s objectives.

In the long run, an effective organisational design can allow a business to adapt to changing circumstances, respond to new opportunities and achieve its goals.

Organisational design touches a number of areas of an organisation to ensure they work together to attain the organisation’s purpose. Key organisational design principles include the following:

• Strategy: Organisational design considers a company’s vision, mission and goals. It also explores the strategies and tactics the company uses to achieve its goals.
• Structure: Organisational design consulting examines a company’s formal arrangement of roles, responsibilities and reporting relationships. Specifically, org design looks at how many levels exist in an organisational hierarchy, how large the span of control is for company leaders and what functional areas or departments exist in the company.
• Processes: Part of organisational design evaluates the formal and informal procedures and workflows that people use to accomplish organisational goals. For example, consultants may review the company’s decision-making, communication, collaboration and performance management processes.
• Culture: Organisational design includes a review of what makes up a company’s culture, including its shared values, beliefs, assumptions and norms. Consultants assess what elements shape how individuals in the organisation behave, interact and make decisions.
• People: People are at the heart of organisational design. Organisational design principles suggest the review of an organisation’s human resources, including the skills, knowledge, experience and diversity of its employees. Org design also considers talent-related practices, including recruitment, retention, and development.
• Technology: Consultants also look at what tools, systems and infrastructure support the organisational structure and design. They consider access to tools and resources, including information technology, manufacturing equipment and more.
• Environment: Finally, organisational design consulting assesses the external factors that impact an organisation, such as market conditions, regulations, competitors and social trends.

The steps involved in organisational design consulting vary from project to project and from organisation to organisation. The proper steps may depend on why the organisation is rethinking its design, whether in response to changes in the market, the launch of a new business strategy or the fact that the current organisational design is no longer fit for purpose.

Common steps involved in organisational design consulting are as follows:

• Diagnosis: Organisational design consultants begin by understanding the organisation’s current structure, culture, processes and performance. They also consider any external factors shaping a company’s environment. They gather data through methods such as employee interviews, surveys and focus groups.
• Analysis: After diagnosing any issues, org design consultants analyse the data to identify strengths, weaknesses, opportunities and threats related to the organisational design. This process may include tools such as SWOT analysis, stakeholder mapping and process mapping, among others.
• Design: Organisational design consultants work with an organisation’s leaders to develop a new organisational design that resolves any issues and aligns with the organisation's goals and strategy. This step may involve creating a new organisational chart, defining roles and responsibilities, designing processes and workflows and developing a new culture.
• Implementation: Org design consultants with the organisation to implement the design. Implementing the change likely involves drafting a change management plan, building and executing a strategy to communicate the change to employees, training employees on new processes and roles and monitoring the progress of the transformation.
• Evaluation: Organisational design consultants assess the effectiveness of the new design. Using key performance metrics and feedback from stakeholders, consultants identify and prioritise opportunities for improvement and refine the organisational design.

Organisational structure and design are critical elements in ensuring an organisation is set up to thrive. A poor organisational structure can cause a host of problems, including low employee morale, high staff turnover, poor work quality, lack of coordination between business units, wasted time and ineffective problem-solving. In turn, these problems can lead to missed business targets and overall lackluster performance.

But when organisations get their structure and design right, they can improve their efficiency, streamline decision-making and strengthen their culture.

A sound organisational structure aligns a company’s resources, roles and processes with the business strategy. It clarifies employees’ roles and responsibilities, so they’re more likely to perform better. And it encourages organisations to respond better to shifting market conditions and emerging threats. In turn, the organisation can become more adaptable and innovative. As a result, the organisation is more likely to earn higher profits and improve the quality of its goods and services. It’s also likely to have a more motivated workforce and be better prepared to weather disruption.