#6 Developing organisational structures

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Organisational Design

There is no ideal design for an organisation. Whether centralised, decentralised, organised by matrix, by product line, by region, hierarchical or without management. All forms of organisation have their advantages and disadvantages. It is important that you choose a form that not only helps your organisation today, but also makes it more sustainable in the future.

Here are a few tips:

1. Align the design with strategy
2. Articulate clear design objectives for example:
   • “The new organisation is designed to increase productivity by x percent over x period of time.” (Productivity)
   • The new organisation is designed to allow decisions to be made twice as quickly and to promote entrepreneurship and innovation.” (Agility)
   • ”The new organisation is designed to reflect and support our strong human values of equality, respect, self-esteem, and teamwork.”  (Humanity)
   • Combined with the strategy, these design objectives serve as an orientation for design decisions. What were the design objectives of your last restructuring?
3. Work on relationship and power issues before you make important decisions about the organisational structure. It’s not an easy task, but you’ll be surprised how different the organisational design discussion is if you’re not at odds.  A strong team tackles this issue.
4. Make sure you have the necessary information about current operational processes. Involve your employees in the preliminary considerations.
5. Don’t micro-manage: as much as necessary, as little as possible!
6. Give your employees space and the freedom to continue working on the design and to help shape operational subtleties. Your employees know better than you how operational processes work. Use their intelligence and experience!
7. Conduct individual discussions after the restructuring, and after giving your employees time to get used to the new organisation. Keep calm and work, keep the spirit.
8. Re-evaluate the design after six months and make adjustments where necessary

Golden Management Rule

A clearly defined purpose and a strong case for support are necessary when introducing a new organisational structure. What sounds simple in technical literature, in reality, is often complex. Specific interests, egos, and power considerations play a role that should not be underestimated, and it is not uncommon for the criteria for introducing a particular organisational structure to be political rather than purely commercial. This is human and understandable, but it can lead to unrest and will not, ultimately,  have the desired effect. Try to eliminate the negative effects of “politics” wherever possible, so that energy is freed up in your organisation for constructive and efficient cooperation.

Find out more about Organisational Design in the next article!

You find more advice in my Corporate Coaching!