Kerry Jarred, co-founder and partner at Ignium, the leadership development and change experts, outlines five key principles to keep in mind when evolving organisational design to deliver the desired business shift or growth.
Glassdoor recently published the “2019 Best Places to Work – Employees’ Choice” and a quick scan of reviews by employees shows just how much a positive work culture matters. In fact, last year’s “The Culture Economy” report found that a third of British employees quit their jobs due to a bad workplace culture. And Deloitte’s 2012 “Culture in the Workplace” found that 94% of executives and 88% of employees believed a distinct workplace culture was important to business success. 83% of executives and 84% of those employees ranked having engaged and motivated employees as the top factor that substantially contributed to a company’s success.
A business with a happy and engaged workforce that feels valued by their employers will succeed. The Glassdoor research last year also reported that poor company culture is costing the UK economy £23.6 billion a year. As change and uncertainty is an accepted norm, leaders within businesses continue to endeavour to stay ahead. Whether a CEO, Managing Partner, Founder or Functional Director, business leaders will continually be checking whether the organisational design in place is fit for purpose, for now, but more importantly, for the future. Or at least, they should be if they want to cultivate the right work culture and retain, as well as attract key employees.
Put simply, organisational design is the process, structure, and hierarchy business leaders need to put into place to create their desired culture into practice. It’s how things are done that matters.
Typically this includes how the business communicates, how it develops its people, how it assesses performance, how people work together, how roles and responsibilities are structured, how reporting lines work, how work is allocated and flows through to completion, even how people schedule and run meetings.
If carefully developed, a company culture will enable everyone in the business to do his or her job more effectively. A business culture will be significantly enhanced if the organisational design clarifies authority, responsibility, and accountability, and is aligned with the business strategy, and reinforces the values that are important to the organisation’s success.
To avoid becoming a depressing statistic and change the workplace culture business leaders will need to look at modifying their organisational design in a way which is as effective and painless as possible. It, of course, needs to invigorate employees, build distinctive new capabilities, and attract and retain clients.
The Past is not the Future
Keeping the future state in mind is critical when looking to make changes. Reflect upon, and respect what has gone before, but don’t cling on to it as it may not be what the business needs going forward. Focus on the way forward, instead of blaming or attempting to justify the design in place at present or the designs of the past.
A good first step in any redesign is to reassess the business’ sense of purpose, how it makes a difference to clients, employees and investors, and how it can grow and develop over the next two to five years. The company’s culture, values and purpose should run through the core of any new organisational design as they will help to keep the goals of the new design and strategy in sight.
Plan with limitations in mind
This may sound negative, but taking into account the likely issues, limitations, and scarcities will help business leaders to create a more sustainable organisation design. Leaders and managers need to be realistic and recognise the constraints that are beyond the company’s control. Focus on what can be controlled and can be changed.
An organisation redesign isn’t about setting up a new structure in one go. It is a sequence of interventions which will lead a company from the past to the future. Keep in mind that too many changes that occur simultaneously can cause negative side effects – instead, pick three to four changes to deliver more positive initial results.
Often organisational design specialists start with the ‘Organisational Chart’ as it is tangible – but try to resist the temptation! It may be the case that the change will require some movement of roles, responsibilities, reduction in headcount etc. but what should drive this is the desired strategy and what skills, capabilities and mind sets are required to achieve this.
Structure needs to be the last part of that sequence, otherwise the change won’t sustain itself.
Ensure an optimal span of control for senior positions and focus on people’s strengths. Consider which skills (technical, managerial, leadership) and behaviours are key and make sure the company’s leaders are fully equipped and enabled to drive and manage the change effectively.
Empowering others, giving them accountability and encouraging a collaborative spirit within teams forms the bedrock of a successful re-design process. Accountability and enablement need to be continually nurtured and promoted, even once it becomes part of the company’s culture.
By focusing on strengths, whether formal or informal, leaders and managers will be better able to address the critical areas that have been prioritised. Involve others. Talk about the problem areas and reinforce the strengths with a rewards system. This will help to develop a positive atmosphere within the business.
Don’t lose sight of the informal
Formal elements of organisational redesign, such as structure and information flow are attractive to companies because they’re tangible and can be easily defined and measured. Many companies redesign their organisation charts, change their workflows or set up new knowledge-sharing systems without seeing the expected results. This can be down to the fact that they have missed the informal elements, the less tangible, ‘unsaid’ elements of their business. The ‘ways things are done around here’: The mind-sets, values, norms, behaviours, networks and commitments which might not be as obvious but are of equal importance. They represent and influence the ways in which people think, feel, communicate and behave. When the intangibles are in sync with the tangible building blocks, the business is likely to optimise its potential for success.