Five ways to win at organisational development and designby
Organisation design is rarely straightforward, says Garin Rouch and Dani Bacon from Distinction Business Consulting. But these five steps should give you a good chance of clearing the hurdles your first organisation design task is likely to encounter.
Organisation design is the Heptathlon of HR disciplines. You need to be able to build trust easily and be credible and comfortable in ambiguity and complexity. It’s essential that you’re strategic while simultaneously able to understand operational realities.
You need to analyse and interpret data but also engage people to help them conceptualise alternative realities. You also need to anticipate and manage the emotional fallout that comes from change.
An architect wouldn’t even consider drawing your new house without knowing more about you and your lifestyle
Build organisational development skills and skip the stress
Before you hit the panic button, there are some great resources and research to support you as well as a generous design community who are happy to share their hard-won experiences with you. Like any skill, the more you do organisation design, the less stressful it becomes. You develop your own unique approach and strengthen your relationships and social and political capital leading to people being more receptive to your proposed changes.
To accelerate your development, we’ve combined our experience along with academic research to give you five essential steps to follow that stack the odds in your favour when it comes to your first organisation design.
1. Have you agreed the OD design criteria with the senior leadership group?
Design criteria are like the instructions you give to an architect. An architect wouldn’t even consider drawing your new house without knowing more about you and your lifestyle. Likewise, leadership teams need to be clear on the capabilities they want the design to achieve.
This needs them to agree on the strategic priorities or the problems the design needs to support or solve. We’re constantly surprised by the lack of clarity in many organisation strategies. It is impossible to effectively design something if you don’t know what it’s for.
This process can be challenging for leaders. There will be differences amongst the leadership group, so it’s essential that you surface this through robust discussion at the outset.
2. Are you testing your assumptions throughout the process?
Making assumptions is a necessary part of creating a new organisation design. But what if our assumptions are wrong? What if we’re tackling a symptom rather than a problem? Or our bias is distorting our interpretation? Even though you’ll be under pressure to make progress, it’s vital that you take time to understand the system before making any significant changes.
Things are the way they are for a reason and they’re often not what we initially think. Organisations love scapegoats. We might hear 'We’d increase our sales if only the risk team weren’t so slow'. But before you go in and reconfigure the Risk department spend time on the floor observing, interviewing and mapping processes to really understand what’s happening. It often turns out a restrictive policy or process, or a system working on inaccurate data is the root cause rather than the team itself.
Organisation design needs to create an environment and a structure that allows people to form optimal working relationships and encourage the flow of information
3. Have you been realistic about the time and resources required to deliver the design?
Many new organisational designs fail to fully realise their benefits. People run out of steam following the excitement of the launch. The daily grind becomes even harder as the changes impact how work is done, and the inevitable snagging list emerges. It’s important you are clear upfront with your leaders that they will need to allocate enough time and resources for the implementation and embedding the design.
An organisational design project is complex and unpredictable. We’re prone to faulty thinking like the overconfidence bias and planning fallacy. We underestimate how difficult the project will be and overestimate our ability to overcome the challenges.
We advise drawing on the expertise of organisation designers that have delivered similar projects to see how long it took it them and the challenges they faced. There are good networking groups like the European Organisation Design Forum or Organisation Design Forum to support this.
4. Have you understood how people collaborate and information is shared?
Organisation design needs to create an environment and a structure that allows people to form optimal working relationships and encourage the flow of information. To be confident that your design does this surfaces how informal power networks work, and where the interdependencies and key handoffs are. You also need to identify the tensions between business areas so that you can put measures in place to encourage more effective collaboration.
This type of data collection can be time-consuming and won’t be apparent just by looking at the organisation chart. An extensive study by Worren (2019) found that 50% of design practitioners find it a challenge to understand how people collaborate and exchange information across the organisation.
A good way to do this is to draw an organisation model laying out how the business actually works. With the input of people in each of the business areas, you’ll soon start to identify the key relationships and areas you need to pay attention to.
5. Have you worked out how you’re going to measure the effectiveness of your design?
Organisations are complex adaptive systems. No matter how much design you do you can’t predict how people will perform in it. When it comes to organisation design, data is your friend. You need to ensure that you’re monitoring for early warning signs the design isn’t delivering on its objectives. Be mindful to not only select lag indicators. Metrics like employee engagement, sales and employee turnover only measure an effect after the event has happened.
Before you know it, you’ll be streaming down the finishing straight with the end in sight
By the time you see it, it’s too late or will require significantly more remedial work. An early sign of decreasing employee engagement is lower productivity or social interaction, so you speak to your IT team to find ways for your internal platforms can isolate data that indicates a change in behaviour worthy of further investigation.
Enjoy the success
Organisation design is rarely straightforward but if you follow these five steps, they should give you a good chance of successfully clearing the hurdles your first organisation design task is likely to encounter. And before you know it, you’ll be streaming down the finishing straight with the end in sight. The crowd may even be cheering for you.
Interested in this topic? Read HR's biggest organisational design problem.
Garin is an award-winning Organisation Development and Design consultant with over 17 years’ experience. He has supported leading organisations in London, Shanghai and Sydney in achieving their strategic objectives. He has experience working with companies of all different sizes and sectors including Legal & General, BNP Paribas, TP ICAP...