How Does It Support a Digital Strategy and Change Management Plan?

Organizational Design is a core component of Organizational Change

Management.

As well as Organizational Design is a core component of any sort of Transformation.

What exactly is Organizational Design?

Why is it so important to Transformation?

We will undertake a short journey to explore it in this article.

My name is P. K. Saxena.

I am CTO of Sofcon Systems India Pvt. Ltd.

Sofcon Systems India is having 27+ years of experience in the field of Automation Solutions.

Also now it has started helping their clients in their migration path to Industry 4.0.

My guide for this journey is Eric Kimberling.

He is the CEO of Third Stage Consulting which is an independent consulting firm.

That helps clients throughout the world with their Digital Transformation journeys.

One of the services they provide to their clients is Organizational Change Management.

At the same time one of the core components of Organizational Change Management is Organizational Design.

Many times people do not understand what Organizational Design is.

In the same way they do not understand why it is so important.

They do not necessarily understand how to pursue

and how to execute on Organizational Design.

Hence I will dwell upon few salient issues in this article such as-

• How to address Organizational Design as part of any sort of transformation initiative?
• Whether Organizational Design is a business transformation?
• Whether Organizational Design is a digital transformation?
• Else whether Organizational Design is a merger?
• Whether Organizational Design is an acquisition integration?
• Or whether Organizational Design is  any sort of change initiative?

In fact Organizational Design can be a very important enabler for above mentioned changes.

In short I will discuss about what Organizational Design is

and how you can deploy it throughout your organization in next few paragraphs.

Inputs into Organizational Design

In the first place it is important to first dwell upon

what are the inputs?

Or what are the prerequisites to Organizational Design?

In particular Organizational Design is something

that is predicated on

your overall business strategy,

as well as on your transformation strategy.

Whatever you are trying to change as an organization,

as well as you are trying to change your future state business processes

and also your future state technologies.

 

All of these things are going to ultimately influence

• how you redesign your organization,
• how you structure your organization,
• and how your overall Organizational Design looks.

On the contrary in order to be effective in Organizational Design,it is important

for you to have a clear vision of what you want to be.

Similarly you should have clear vision of what you want to be

when you grow up in terms of the strategy,

or in terms of the processes,

and also in terms of the technologies.

Once you have this clarity around

that future state of your strategy,

or your processes,

and your technologies,

then you can start thinking about

what exactly is your Organizational Design will look like?

How are we going to structure ourselves organizationally?

How can we build the organizational capabilities?

That we ultimately need

and that is what I will discuss here in this article.

Organizational Structure

 

The foundation of Organizational Design is really the Organizational Structure.

As well as how the organization is going to look like in the future.

One way to think about this is to look at the Organization Chart.

When you think about an Organization Chart

and look at all the boxes

that need to be filled in an Organization Chart

then that is in essence

what the core foundation of Organizational Design is.

For example it is defining

what all the different roles and responsibilities are within the organization.

Reporting Relationships

What are the reporting relationships?

How do people cross-collaborate across the organization,

across their peers,

and across their subordinates?

How job roles and responsibilities are going to align in that future state?

As well as to fit in that future state?

Before we proceed further,

it is really important to focus on that future state

and also to understand

what the Organizational Design is for the future

and not necessarily the way things are today.

The important thing to remember is the current state.

It is important in terms of understanding

how people are going to transition

from the current state to that future state

or design from the current state to that future state.

The first step in Organizational Design is really defining

what is the organizational structure?

What are those reporting relationships?

Further what are the job roles

and responsibilities

that we need to support for our future state

as well as answering other questions around?

What sort of span of control might we have within the organization?

In other words how many direct reports should a manager have?

This is an example of an Organizational Design type of decision that needs to be taken.

Few more questions we should seek answers for are as follows:

What are people’s jobs?

What are they responsible for?

Who is going to do what? Etc.

That is the essence in the foundational blueprint for work design of Organizational Design.

Measurement

The next part of Organizational Design is to look at the measurements.

How do we measure different roles

and responsibilities within the organization?

I had already described

how an organizational chart is really the foundation

and the blueprint for

what the Organizational Design is going to be in the future.

Then the next step is to define not only

who fits into each of those boxes in the Organizational Chart,

but also to look at

what skill sets are required for each of those boxes in the Organizational Chart.  

As well as to look at how we are going to measure each of those people?  

How are we going to measure their performance?

How do we measure success for that specific role?

Or how do we measure that specific box in the Organizational Chart?

Indeed these metrics should then be translated into compensation for the people.

How will we pay people?

For this reason it is one thing to measure people

but then the other thing is

how do we tie those measures of performance to overall compensation?

Finally we also have few questions about

how much are we willing to pay people for certain roles?

And how much are we willing to pay people for certain spots in the Organizational Chart?

To summarize the above examples of things are

what we want to cover in this article.

In this case one of the things,

that we want to make sure is given below.

Organizational Competencies

The next thing we need to take up,

once we have defined the Organizational Chart and the work structure,

then the next thing we need to take up is to define

the measures behind each of the boxes in that Organizational Structure.

Then we need to think about the competencies that are required to support that work structure.

Also we have to think about what are the skills we have today?

As well as we have to think  about what are the skills we are going to need for the future.

We need to understand the gap between the skills.

Also we need to understand people and the skills we have today

as well as we need to understand the people and the skills we need tomorrow.

That is going to lead us to some conclusions such as –

How do we get to that future state?

As well as how do we build the competencies we need to support that future state?

Action Examples

One example of action we might take would be 

to hire additional people with the right competencies

that further enable the future state.

Another action example would be learning and development opportunities for current staff.

How can we develop our current staff to have the skills they need for the future?

So that they have to do their jobs in the future 

not necessarily just what they have done in the past?

In brief these are couple of examples of decisions that need to be made as part of looking at-

What  is the delta between the current state and the future state competency?

As well as what is the delta between skill sets that you are going to need within the organization in the future?

Organizational Change Plan

 

Subsequently once we have defined all the different components of Organizational Design

then we have to figure out how do we get there?

Besides we also need to figure out what do we do to move from

where we are today.

As well as we have to assess what our organization looks like today

to what it is going to be in the future.

In fact this is needed to really support that future state Organizational Design.

In addition we need to incorporate some of these activities

into our overall Organizational Change strategy

as well as in our overall Organizational Change plan.

Moreover here is where we start to define specific activities

as well as work streams 

that will support our migration

from current state to future state Organizational Design.

Examples

Meanwhile some examples of how we might incorporate

few change activities to support Organizational Design

into our Organizational Change plan might be things like this up skill

that I discussed about before

where we develop our staff

or our employees to support the skills they need to support that future state.

It could also be that we need to rewrite job descriptions.

Else we need to change the way jobs are defined.

Or we need to change roles and responsibilities.

It could be that

we have to deploy new technologies

to help enable some of this future state Organizational Design.

There is a lot of human capital management technologies out there

or HR technologies

that can help support the migration from current state to future state.

As well as it can help in making sure that we have a clear 

and deliberate strategy for moving our workforce

to where they need to be to support our future state.

Hence these are just a few examples.

The key thing here is to recognize

that it is one thing to define what we want our future state to be.

However we have to track that back to where we are today.

and ultimately define what the plan is for us

to get from the current state to the future state

based on what that delta is

and what those exact gaps are between current and future state.

Benefits of Organizational Design

Why exactly do we go through this exercise of Organizational Design?

There is a number of business benefits that are enabled by Organizational Design.

First Benefit

The first benefit is that you have clarity of roles.

You have provided clarity to the organization

as well as to your team members.

You clearly define their future roles in the organization.

This act is very important

and it plays a big part in Organizational Design.

That is a main reason why so many transformation initiatives fails.

Because organizations often fail to clearly articulate

and communicate to their people

how jobs are changing

and what roles and responsibilities are going to look like in the future.

Hence Organizational Design enables clarity of job roles in the future.

Second Benefit

The second thing that is a benefit with Organizational Design is that

it enables change management

and it eases resistance to change.

Main reason why the people resist change is because of lack of clarity

that I just discussed about.

If they do not know what is going to happen to their job

then they are probably going to assume the worst.

Else if they do not know how their role is going to change

then they are probably going to assume that their job is somehow in jeopardy.

Hence having that clarity allows us to be better at managing change.

This is a second example of how Organizational Design adds to the business benefits of your transformation.

Third Benefit

The third business benefit of Organizational Design is that it enables the potential

business value of your transformation initiative.

Hence either you can have the best technology in the world

or you can have the best business process re-engineering design.

As well as you can have the best integration plan in the world.

But if you do not have a clear

or you do not have design strategy to enable that value

and unlock that potential value

then you are not going to get that value.

Consequently Organizational Design is really a way to realize measurable business

results as a result of your transformation initiative.

Finally Organizational Design is an opportunity to enable and support the type of

culture you are trying to create and oftentimes

when we are defining our current state versus our future state

we are not just looking at Organizational Design

as we have discussed about in this article 

we are also looking at other aspects of the organization like culture.

Likewise Culture is a big part which can enable a Business Transformation

or a Digital Transformation.

Organizational Design is a way

that we can reinforce

that culture

and really enable that type of culture

we are trying to create in our future state.

To summarize I hope this has given you some examples

and some ways of thinking

as it relates to Organizational Design.

I encourage you to check out Eric Kimberling’s guide to Organizational Change Management

which covers Organizational Design

as well as other aspects of Organizational Change Management

and the whole human aspect of any sort of transformation.

You can download that directly off website www.thirdstage-consulting.com .

 I hope you found this information useful.

                                             By Digital Prabhat

                                                                                       

Resource: Eric Kimberling-What is Organizational  

                   Intelligence? / Third Stage Consulting Group

                   www.thirdstage-consulting.com