When faced with myriad and entrenched challenges, redesigning a business or function is often a necessary step for many companies. Understanding when to commence this process and how to go about it is even more crucial, because according to a 2016 Robert Half Management Resources survey, 46% of redesigns fail during the execution phase.
Here's the good news: Implementation errors are often just a matter of leaders not knowing what options are available to them.
Sidestepping struggles: When a propensity to act and operational thinking become inhibitors to effective prganization design
Right out of the gate, a massive inhibitor to effective organization design work is taking a hyperfocused view or falling back to “operational thinking.” C-suite executives tend to compartmentalize their company's divisions and think of patches of work: strategic business unit, marketing, supply chain, etc. They often lose the plot and focus instead on customers and what truly adds value, leaving human resources to worry about people and culture. The consequence of this is more fragmentation.
Another error is thinking that organization redesign is the same as changing reporting relationships and organization charts -- or confusing it with levels and spans of control. As today's businesses thrive on integrated value streams and communities, businesses must be realistic about the scope of a redesign and the effort it takes to implement it. While those comparatively cosmetic changes may result in cost reduction and be quicker to enact, they do little to change the comprehensive structure of a company.
An organization redesign is one of largest business transformations a leader could implement, so it’s important to remember that a good redesign is a process. It must be managed step-by-step — from the initial planning all the way through implementation and the critical stabilization period that follows.
For example, OTM has completed redesigns in as fast as 32 days for a global business function, but it was the single priority of the executive team, staff and business. OTM also redesigned a 5,000-person business spread across three countries and 12 sites in four months. An executive stated that together we made more progress in one month than the company had in the previous two years.
Lastly, companies often make a final error by not engaging their people in every phase. Staff and leadership must share one outlook, and not collaborating with employees appropriately — and, more importantly, not including them in the design process — can result in failure.
Avoiding these mistakes is a priority. But what should you be doing?
- Refrain from overdesigning. Organization redesign works best when a leader leaves some "white space" where employees can inject their own expertise into the blueprints. A good rule of thumb is to design only about 75% of the plan. Overly detailed plans are, in practice, brittle and difficult to implement. Instead, white space allows for flexibility and adaptability.
- Ensure your team members are an integral part of the process. Your employees' opinions matter, and by including their perspectives, you leverage one of your greatest resources: the "wisdom of the crowd." An inclusive process encourages retention, productivity and, hopefully, enthusiastic acceptance of the new design, because when those who have to implement the solution own it, that leads to a collective commitment to its success.
- Ensure adjustments are holistic. Management mechanisms should match any organization redesign. Managers in all areas of the business, from HR to manufacturing, must be clear that a change in one part of the organization can have a significant impact elsewhere. A key aspect of redesigns is “work transfer” — i.e., carefully orchestrating new roles and duties — and having clear mechanisms for smooth work transfer makes all of the difference in effective redesign.
Redesign is often vital to thriving in a continually evolving marketplace. But it's helpful only when it's done well. Fortunately, it's entirely possible to steer clear of a narrowly focused, unrealistic, and overly top-down approach. By building ample flexibility, inclusiveness, and the right management mechanisms into your plan, you will launch a successful redesign that will benefit everyone.
Mark LaScola is founder and managing principal of ON THE MARK. In business for 27 years, OTM is a global leader in collaborative organization design and business transformation. LaScola’s passion for collaborative business transformation sits at the heart of OTM, supported by pragmatism, systems thinking, and belief in people. Find him on Twitter and LinkedIn.