Organisation design is not easy – and it is both a science and an art.
I’ve spent my career in organisational change, helping organisations, both large and small, design and implement new operating models and organisation structures.
In this blog I consider five common pitfalls I’ve encountered and share some ideas about how to avoid them.
1. Inadequate preparation
In most organisation design projects, there is an imperative for change and often at significant pace.
Whenever there is a ‘burning platform’, it’s tempting to jump into the design of a new structure without completing some important preparatory steps.
Most critically, these include:
- Ensuring absolute clarity about the driver for change
- Carefully identifying issues in the current state
- Envisioning the intended end state and underlying principles
Failing to lay these critical foundations will lead to a new organisation design that fails to address existing problems.
Implementing a change without a clear idea of what’s driving the need for it is pointless. Sometimes organisation design is only part of the solution. It may even be the wrong answer to the wrong question.
Following the steps above helps ensure the right solution is deployed.
To increase your chances of success:
- Complete all necessary pre-work and thinking
- Gain alignment on the case for change, current issues and future vision with critical stakeholders as they will have to lead the change
- Do not use OD to address problems such as poor performance that do not have their origin and solution in organisation design.
2. Lack of stakeholder buy-in
Failing to secure the buy-in of key stakeholders and employees as the design progresses is another common pitfall. It is not enough merely to communicate changes; for best success, people need to be actively engaged throughout the process.
Don’t mistake one good workshop for a job well done. Successful stakeholder management requires frequent, sometimes daily, effort from the change team.
Without active buy-in from the start, people will resist and object to the new design as soon as they begin to see its implementation. This will delay the delivery of the change and even compromise design, where senior stakeholders start to unpick earlier design decisions. This can happen as they realise the implications for their functions or cherished projects.
To avoid this problem:
- Secure senior sponsorship from the start. This requires regular involvement, recognising and encouraging progress and tackling resistance at the most senior levels head-on to maintain momentum
- Complete stakeholder impact analysis and engagement plans at a very early stage. This helps identify specific actions and accountabilities so nothing gets missed
- Set up two-way communication channels to encourage people at all levels to voice their opinions and get involved where possible.
3. Building the new structure around people that you like
This is a tricky one.
There is always a moment when the new theoretical model, carefully crafted according to consistent principles, meets the reality of the people and talent actually available in the organisation and wider market.
Managing this carefully is very important, and it may be legitimate to adjust the design to accommodate top talent at this point.
However, starting by designing roles and structures around the people you like (rather than strong performers with critical capabilities) usually means significant compromise against organisation design principles.
Such decisions cannot be easily justified and could mean:
- The organisation is left with legacy roles (and their associated costs) rather than making the tough decision to lose a redundant role occupied by a popular person
- Roles don’t align with strategy requirements
- Resentment is created as others notice this and feel it is not fair.
Avoid this trap by testing to ensure the design remains true to design principles, and that all roles have a clear line of sight to strategy execution requirements. Be prepared to make tough people decisions to achieve the change you want.
4. Forgetting about capabilities
Another common pitfall is insufficient thought given to current and future capabilities. Current employees may be incapable of adopting new roles, so the structures that have been designed cannot be realised.
It is rare that all the capabilities required for the future organisation already exist internally. Failing to plan for future talent needs can significantly slow down the pace of change.
To combat this:
- Don’t design roles that cannot realistically be filled; aim for desirable but achievable skill profiles
- Check externally to see if similar roles exist in other organisations. If not, can you be sure you will find a ready supply of suitable candidates?
- Conduct a capability assessment on current employees early in the design process
- Involve talent acquisition professionals early to fill critical positions where there are capability gaps.
5. Ignoring the bigger picture
An organisation is a highly complex system, of which structures and roles are just two elements. If insufficient attention is paid to the whole organisation system (including processes, programmes, policies, systems and technologies) needed to make the new design work, new structures and roles will fail to deliver benefits.
Recognising this is key to success in organisational change.
Carry out an impact assessment and ensure that transition plans consider new roles in a holistic way, rather than simply new reporting lines. What will be the impact on systems and processes? How will policies and practices need to change? Are objectives, reward and recognition aligned to new roles, structures, and desired outcomes?
Addressing these questions and others will help improve the transition to the new model.
There are many more challenges and potential pitfalls in delivering organisational change that need to be carefully navigated.
If you would like help, please get in touch.
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