This spring, a couple of my clients have been working to implement new strategic plans, both involving big changes (improvements) to their organization structure. Working with these leaders has reminded me (yet again) of both the challenge and simplicity of organization design. Some highlights:
1) Strategy before Structure – Though it always makes conceptual sense that strategy should come first, in practice it’s tempting to reach for reorganization as the prescription for change per se. Resist this urge always! Instead, use strategy – the “Big S,” overarching, enterprise-scale strategy which defines the firm’s primary focus – to decide how best to organize. There are no perfect structures; the one you want is the one that helps most in achieving the strategic intent of the company.
2) Boxes before Names – All change involving people is challenging and difficult. And too often leaders began organization redesign by focusing on finding a home for existing staff. This thinking is backwards – for at least two reasons. First, it’s important to first determine the key roles (boxes on the organization chart) before deciding who should fill those positions (names in the boxes). Second, filling boxes with names first implies that the firm already has all of (the best of) the leaders it needs for key positions. Instead, leaders should start by asking whether or not there might be better performers currently outside. Then, the company should hold all existing staff to a more objective, less relative (this is the best that Bill can do) standard. Significant organization change and growth will never come simply through moving chairs around, and then filling those chairs with the same individuals.
3) Process, not Event – If you follow my writing, you’ve heard me say this before. All meaningful and successful change is achieved through ongoing process, rather than once and done event. So leaders shouldn’t expect that drawing up a new organization chart will itself do the trick. The chart is nothing more than a depiction of how the organization works (or is supposed to). The real success of change management comes behind this – through the ongoing training, mentoring, and job experiences, along with committed, aggressive, day-to-day management of a defined business improvement action plan.
4) Simple, not Complex – Another common theme of mine, leaders often mistake the opposite of simple, searching instead for a complex solution – to match the complexity they experience in their organizations, markets, and business. But this is wrong. In the business context, the more appropriate opposite of simple here is ‘hard.’ The real challenge of strategy implementation and organization design is the difficulty of achieving it. Elegance comes through simplicity, and leaders should always strive to reduce the complexity of their strategies and structures.
There are many reasons why firms change their structures – to better align with business strategies. Companies may desire to increase speed, be more nimble, or perhaps more innovative. Others focus on improving operational efficiency, internal profitability, and return on business investment. Still others want to be more client focused, customer intimate, or market specialist. Different focuses, but with a similar objective – to improve business performance. This objective is always best accomplished through a straightforward approach, one that involves setting strategy first and organization structure second, and through an ongoing process, with elegant simplicity.
That’s what I think. What say you?