As I have worked on organization design projects over the years, a few trends have emerged. It’s a very tricky subject, so don’t enter into it lightly.
Not by consensus
Identify a select few to make decisions. You will never achieve consensus on a new organization design by the entire organization, or even by an entire leadership team. You might gain alignment on the new direction and/or the new strategy, but choose your organization design project team very carefully. The sweet spot is an odd number to avoid a tie – five.
In that same vein, objectivity is paramount. This is where involving an external consultant can be most helpful. You need a blend of those who understand the nuances of the business, along with someone who can provide independent recommendations.
It may go without saying, but avoid involving the individuals who actively try to hoard resources or give away problem team members. You need leaders working for the betterment of the entire organization based on business strategy. Who can see that big picture?
Every executive has some trigger which causes them to initiate an organization design project. It could be a merger, acquisition, organic company growth, response to a competitor or in reaction to contractions in the economy.
Whatever your trigger, take action sooner, rather than later. It probably will not be easy to make the changes. However, the longer you wait, the more painful the process will be. All parts of the organization may not feel the same amount of pain, but be a courageous leader and get in front of it as much as possible!
Communicate about it in as transparent a way as possible. Everyone will hear about it one way or the other. Feed the grapevine facts instead of letting rumors run rampant.
Follow the process
It’s human nature. People always want to jump straight to putting names in boxes on an organization chart. However, that should come much, much later in an organization design process.
Step one should be to understand the business processes. The role designs and organization design need to support the business. They should NOT be based on who the individuals are and what skills they have – or don’t have.
The gold standard for organization design is to follow the STAR model by Jay Galbraith. Most stakeholders often do not have the patience for this much discipline. Even if you accelerate some of the steps, you need to at least think through each one.
Prepare to iterate
No organization design is perfect on the first try. Set and manage expectations that when it goes live, you will expect it to evolve over time.
You may need to add headcount in one department or reduce staffing in another department. Forecasts may not be accurate for a variety of reasons. The individuals impacted, as well as the customers they serve need to be prepared for these adjustments.
As the executive of the department reorganizing, prepare to evaluate your new organization design after 30 days, 60 days, 90 days and 180 days. Then adjust as needed. Tell your stakeholders this is your plan and then actually follow through.
These types of change projects can be difficult for all involved. When you embark upon them knowing to expect some of these common pitfalls, it helps make them a little less complicated. It also helps you grow as an executive.