A motorbike and a bicycle have a lot in common but they both function in very different ways. So why is that? The simple answer is design.
Just as design dictates whether your two-wheeler is pedal-powered or requires fuel, the design of your company dictates how it operates on a daily basis. Organisational design is the way your organisation’s structure aligns with its objectives.
Digital disruption, employee expectations and an evolving workforce are all challenging companies to rethink their organisational design. Change is needed if they want to engage and retain talent, empower their employees, tackle leadership issues, and develop company culture.
Deloitte’s Global Human Capital 2016 report found that 92% of companies believe that organisational design is either very important or important. Almost half of the respondents told the survey that they have already restructured their organisation or are planning to do so.
So where does HR fit in? HR is well placed to offer organisational analysis and advice but perhaps its biggest role is in helping to implement any design changes.
Trends in organisational design
Companies are moving away from a traditional hierarchical structure in favour of a network of smaller teams that tackle particular missions or objectives. Employees are seen as a resource of the company rather than the resource of any one manager.
Teams are formed on the basis of expertise or skills for a specific project, customer or market. It’s a fluid, team-centric approach that harnesses an organisation’s talent in the most effective way. Smaller, more responsive teams can communicate better and decentralising authority helps to speed up decision-making.
Only 38% of companies are still functionally organised, the report from Deloitte found. Letting people move from team to team to handle different projects is an obvious way to get the most out of your pool of talent.
More than half the workforce are now Millennials. They want rewarding work, flexibility, development opportunities and to be engaged. So companies are being challenged to change. Leadership roles are evolving to accommodate Millennials but just 7% of companies believe they are “excellent” at developing Millennial leaders.
Established companies only need to look at the exponential growth of disruptive organisations to see the benefits of new design models. These “exponential companies” aren’t hampered by the legacy structures, culture or technology that hinder their old-school rivals. Instead, they’re rapidly evolving organisations that constantly adapt and develop as they grow.
How to avoid organisational design mistakes
“A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools,” said Douglas Adams. Sure, designing a foolproof redesign is difficult, but knowing the potential pitfalls can stack the odds in your favour.
One common problem is adopting a new design without the structures to support it. Imagine a shiny new surface design with the old engine underneath. Your organisation could tear itself apart from the inside. Employees can get confused about their roles or end up trying to satisfy two bosses, which leads to frustration on all sides.
Don’t underestimate company culture. Over half of the companies in the Deloitte survey are currently trying to change their culture, which shows how tricky it is to get right. If a redesign is resisted by traditionalists, it can cause a cultural divide.
There’s no point putting a new engine on your bike if the person riding it insists on using the pedals. Taking the time to convert doubters and clarify new expectations is one way to improve a redesign’s chances of success. Part of this process is explaining how the new structure will work and how they fit into it.
Don’t just change your design for the sake of change either. Think about what you want to achieve, plan accordingly and form a strategy based on your resources. Transforming your organisational design on a whim will rarely end well.
How can HR steer organisational redesign?
Design thinking transforms HR from a “process developer” to an “experience architect” and this makes it an important stakeholder in the process. HR professionals should work closely with management to identify an organisation’s problems and come up with design solutions. HR can also put the employee experience front and centre in any organisational transition.
Job titles and descriptions can become blurred in project-based organisations so employees require support and performance management from HR. Hiring policies and succession planning also need to be carried out with the new structures in mind, making HR vital to the success of any organisational design.
Think of a redesign as upgrading from a bicycle to a motorbike. HR’s role is to explain the operator manual, walk the employee through the mechanics, ensure everything’s working, and to teach them to ride it before they hit the road.
Smart HR technology helps you manage the entire employee journey, from hiring to retiring. It takes all the admin out of the transactional stuff which means you can focus on the design thinking that will help transform your organisation.
By Mark Sexton.
This article fist appeared on CoreHR.com.