Organizations are complex dynamic systems. Their structure is influenced by the wider economy and their employees’ personalities. It is essential for an organization to be adaptable to change. A recent survey of chief executive officers by PwC revealed that many CEOs anticipated disruptions to their organizations in the next five years. To avoid being left behind, leaders need to take charge of the situation and steer their companies toward the future.
The impact of an organizational design on people’s lives can be positive or negative. If the latter is the case, it’s imperative that employees feel empowered and that their needs are met. Employees who feel disempowered tend to do less and less. This can translate to a less profitable business. However, if an organization is able to implement a robust org structure, it can help support increased innovation and resource allocation.
Using sophisticated software and data to determine the most efficient ways to operate, modern businesses have developed a range of organization design strategies. These strategies include the functional vs. nonfunctional aspects of an organization and the logical vs. illogical aspects of an organization.
Organizations come in all shapes and sizes. Small, ten-person start-ups have different organization design challenges than a 200,000-person company. Similarly, product and service based companies have different design challenges than externally focused firms.
For example, in a customer-centric organization, customer-facing project groups will be more prevalent than internal ones. On the other hand, a matrix organization will have a dual focus on both the business and the people that make it happen. In short, an organizational design can have a dramatic impact on the way a company works.
Designing an org is a multi-faceted process that requires a well-thought-out plan. It is important to know when the design is no longer viable and when to make a change. During the design process, it is helpful to consider the strengths of key individuals. Consider the technical skills, managerial acumen, and ability to foster a collaborative culture. Ideally, the people who will be responsible for leading the company should be involved in the design process from the get-go.
Organizational design is a crucial component in a rapidly changing environment. Organizations that are able to design their orgs in a holistic manner will be better positioned to meet the demands of their customers. As a result, happier, more productive employees are likely to flourish.
The org chart is a powerful communications vehicle. It helps to define the structure, reporting relationships, and tasks. But it is also a source of emotional weight. Consequently, leaders need to use it in the right way. An org chart is only a useful tool if it is used to communicate effectively. Getting an org chart wrong can be detrimental to an organization’s success.
The best organization designs have a clear vision. That vision is able to be shared across all levels of an organization. Specifically, it is a vision that can be easily understood and appreciated by everyone.