3 secrets of successful organizational design
We asked Campbell Macpherson, international business advisor and keynote speaker, to discuss the problem of the UK’s flatlining productivity with some of our customers at a recent breakfast briefing in London. In this article, he shares some revealing insights on how business leaders can design future-ready organizations.
Published by Concentra
The vast majority of organizational design initiatives simply don’t work. Bain & Co put the figure as high as 88%: 7 out of 8 change initiatives fail to deliver what they set out to achieve. In my decades of helping and teaching companies to design organizations that work, I’ve compiled the following secrets to successful organizational design. It’s my privilege to share them with you.
There are three key ingredients that organizations need today to weather disruption and build resilience to change, beginning with:
Having clarity of purpose
Clarity of strategy
The first step to success for any new strategy is clarity, which is especially true when it comes to organizational design (OD). You must be crystal clear precisely what you’re trying to achieve – and just as importantly, why:
- What does the end result look like in terms of numbers (size/costs) and ‘narrative’, meaning how the company looks, feels, and acts. Success demands that you clarify both of these. Your organization must be the right size and must have the right culture if it is to succeed.
- Why are you reorganizing the company and why does this reorganization need to happen now? Your people need to know why the change is necessary or your OD initiative is doomed from the outset. We humans don’t change because we’re told to, we only change if we want to. As a leader, your job is to help your people to want to change. This starts with ‘why’.
The ultimate purpose of any OD program is to design an organization that’s capable of delivering the strategy, so the strategy has to be clear – not just to the leaders but to everyone.
Clarity of data
Successful organizational design requires accurate data on which to base decisions. Otherwise, it’s just guesswork. Finding people data that’s accurate, relevant, and timely has been a perennial challenge for OD practitioners.
What impressed me about OrgVue is that it can clean analyze data incredibly quickly. ‘What-if’ analysis can be done in seconds rather than waiting hours or days as your people struggle with endless spreadsheets to find the answers you need – as I’ve experienced many times in my career.
Clarity of execution plan
A strategy that can’t be implemented is an utter waste of time. Success requires a clear action plan, clear accountabilities, clear responsibilities, and intelligent governance that ensures delivery.
Engage through genuine dialogue
Communicate early and often
The best OD initiatives are those where people have been engaged in discussing the strategy and its implications long before the subject of structure and capabilities are even raised.
Listen and engage
Most people listen to reply. Leaders need to listen to understand. Genuine communication is not a one-way broadcast. Engage your people in understanding the implications of your new strategy as early as possible, including capability gaps and structure options.
Your people are not only knowledgeable, but they’re your primary source of competitive advantage. Consult with them genuinely; don’t just conduct a bare-minimum ‘consultation process’ to appease the employment lawyers.
Empathetic and united leadership
The approach and behavior of the leadership team is the critical success factor. If leaders treat OD as a numbers game, as a spreadsheet exercise, it will fail.
Leaders must be empathetic
And they must be fully cognizant of what their people are thinking and feeling. They need to treat people in the same way they’d like to be treated themselves. They need to realize, and publicly acknowledge, that no structure is perfect.
In fact, the entire leadership team must work together to articulate the pros and cons of a number of structure options, before selecting the most appropriate and working on ways to offset the identified imperfections. The realization that no structure is perfect is arguably the most important advice in this whole article. Leaders need a strong, collective desire to make any structure work.
Leaders must be united
The slightest perception of differences of opinion among the top team will hamper the project so significantly that it may never recover. The leadership team needs to act like a team and adhere to the concept of cabinet responsibility. Debate and differences of opinions behind closed doors must lead to a solution and approach that is adopted completely by 100% of the leaders.
Leaders must put the best interests of the company ahead of their own personal agenda – not always easy but critical to the future success of the organization. They need to trust one another and show that.
The way to successful organizational design
The most common mistake most leaders make is to start with structure.The second most common mistake is that the CEO develops his or her structure in a vacuum. But with these secrets, your next organizational design initiative can be the one in eight that succeeds.
Campbell Macpherson is the author of the 2018 Business Book of the Year, ‘The Change Catalyst’.
He is a sought-after keynote speaker on leadership and change, and an Executive Fellow of Henley Business School.
He also runs ‘Leading Change’ workshops for leaders, ‘Embracing Change’ workshops for employees and ‘Organisation Design’ workshops for leaders and HR professionals.You can subscribe to his newsletter ‘The Change Catalyst’ by clicking here.