Current global business environment is disruptive. There are constant changes in technology, related consumer behaviour and preferences, and employee preferences. The 20th Annual PWC survey for CEOs shows that 40% of the respondents believe that technology has altered their competition over the last five years. About 52% of the same respondents believe that technology will change their competition over the next five years. 93% of the respondents believe that a strong corporate purpose must be reflected through their values, organizational culture and behaviour.
With changes occurring at a rapid pace and 49% of the respondents being at least somewhat concerned and 34% being extremely concerned about the uncertainty of growth prospects, change in organizational design is an aspect that needs to be worked upon. In order to successfully redesign the organization, the changes must be brought about through a smooth transition and be as painless as possible. The organizational strategy must be adhered to and the employees must be charged up to adopt the change.
The average term of a CEO is five years and then he/she may not get a second chance to stay in the position. Hence, the re-organization of the company must be smoothly carried out within this period. There are certain principles which can help guide the leadership and strategic management teams overseeing the change in organization design as envisioned by the chief executive officer.
- Move-in the forward direction: Culling important learnings from the past is a great idea. But getting stuck in the past is not. Leaders have to be able to forge a forward path armed with the latest in technology, research and skills. There must be a clear vision of the future and where the organization is headed. Sticking to past achievements will act as an impediment in the growth and development prospects of the future.
- Have a clear redesign framework: Organization redesign is daunting, to say the least. It is more difficult because of the amount of change to be instituted and the restraint and backlash to be borne from the employees. Having a very clear redesign framework works like building blocks for the redesign. These building blocks must pertain to the tangible as well as intangible aspects of change. There are four complementary pairs of these aspects – decisions and norms, motivators and commitments, information and mindsets, and structure and networks. Picking and making comprehensive changes across each of these pairs will help integrate the organization while redesigning it. Changes must be made few at a time and then monitored for impact. Making a lot of changes in one go can be detrimental to the organization’s growth and stability.
- Define the structure in the end: The structure of the organization is something that is evolving during the redesign phase. It carries emotional weight due to the hierarchy relationships and reducing intermediate layers of management will affect cost. However, during this period, all changes made to the structure will at best be temporary and are likely to move back to their original position or change further later. Hence, all the necessary technical, process, systems and other changes must be made first and structure must be decided right at the end.
- Get the help of senior management: All positions in the organizational structure must be able to make optimal use of the strengths of the individuals occupying them. Senior management has a certain skill set and expertise, positions for them must be designed in a way to maximise utilization of their capabilities and foster an environment of collaboration to empower everyone within the team. Also, all senior positions must have an optimal span to ensure complete utilization of the individual’s capabilities.
- Concentrate on what can be controlled: The assessment of environment reveals the problems plaguing the organization and the potential threats which can reduce its productivity. With a real-world analysis of situations, it is possible to determine which of these problems can be controlled within the limitations of the organization. Those are the problems you must focus on solving first.
- Promote accountability: Leaders can demonstrate and foster the spirit of accountability among the employees. Strong leaders who are able to hold their own even in the face of adversity and hold themselves accountable for their actions publicly are highly revered by the employees. Moreover, their actions find many followers and are emulated. This will improve the level of responsibility, honesty and integrity and thus, improve the overall productivity of the organization.
- Avoid benchmarking: Benchmarking against your competitors may be a good strategy to discover your shortcomings and design loopholes. However, too much benchmarking must be avoided because each organization is unique in terms of its skills and capabilities. Also, selecting who to benchmark against is important because the value proposition must be similar to require similar capabilities and design.
- Discover the golden mean: Every company has its own golden mean of “lines and boxes.” Your golden mean would be the strategy that works best for you and it won’t be the same as the strategy that works for your competitor in the same industry. It will be determined by your unique capabilities and has to be specific to your organization.
- Focus on the informal: The other side of the coin of the formal structure and systems is the informal or intangible aspects including norms, commitments, mindsets and networks. These are equally important in defining the productivity of the company’s employees and their behaviours and attitudes towards work and their colleagues.
- Build on your capabilities: Your organization’s unique capabilities are its core strength. Focusing and building on these strengths will allow the organization to grow faster and innovate in that direction. Also, these strengths will be extremely helpful in solving critical problems which have been identified.
Using these principles, the complex task of organization redesign can be done in a streamlined way.