Article Revised: March 28, 2019
When business problems arise, most turn to process redesign as opposed to organizational redesign. Why? First, because process redesigns are poorly informed, poorly planned, and poorly performed. Second, because the accepted business tool set is geared toward process improvement. But that is not the only way: organizational performance depends integrally on organizational design. And your business can achieve this by following these four steps.
1. Solve a Problem
All too often, companies redesign just to do something different — to present an image of relevance. The idea is, if you are not sure what to do next, redesign! Instead, lean businesses reorganize when they have a clear objective that solves a specific problem.
2. Organize for Size
The debate rages on as to whether a business is better off building its strategy around the players, or has a set strategy and their people learn to fit in. The answer to this lies in your company’s size. A larger business generally has a higher turnover rate, meaning that designing a strategy around the people leads to confusion and failure. In a smaller business, the skills and roles that each person brings is the natural foundation for your strategy.
3. Prioritize Connections
Instead of organizing around activities to perform, focus on the interpersonal connections you want employees to make. When properly designed, a lean business promotes collaboration between peers as the heartbeat of the company. The next step furthers organizational structure based on the most important connections — the glue that holds the business together.
Experimentation, though temporarily inconvenient, saves you from the long-term disruption of an unsuitable or failed design. Determine how you will measure the success of your experimentation with the solution to the problem you identified in step one. Come up with a few options and start experimenting.
While no one plan guarantees complete success for every company, following these four steps, performed with a lean mind, organizational design is a useful mechanism for change. Organizational design, as opposed to process design, contributes integrally to lean business advancement.
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