5 steps to better organisation design

Business leaders are concerned about the need to restructure their organisations to remain globally competitive, a new survey indicates.

Organisational design was listed as a top priority by 92% of executives in a Deloitte survey, more important than leadership, culture, and engagement. Yet few respondents believe their companies are ready for an effective redesign (14%) or understand the way their people work together in networks (12%).

The Deloitte report cites disruptive changes in digital technology, business models, and workforce demographics as reasons companies say that a redesign of their organisation is critical.

The survey of more than 7,000 business and HR leaders from 130 countries shows that companies need a change, but their leaders aren’t sure exactly how to engineer that change. But those who have begun to master a “network of teams” approach – forming groups to work on specific business projects and challenges – do so by using the following steps:

1. Move people onto teams that are managed by experts in that team’s focus, not “professional managers”. The teams focus on customers, products, markets, or missions.
2. Allow teams to set their own goals and make their own decisions within the context of an overall strategy. This makes them accountable for their results and goes counter to the traditional structure of goal and performance management.
3. Eliminate silos by creating an information and operations hub to share information and identify connections between team activities and desired results.
4. Encourage job rotation to enable company-wide understanding, allowing employees to work on specific missions before returning “home” once a project is complete.
5. Shift the focus of senior leaders to the topics of planning, strategy, vision, culture, and cross-team communication.

Culture and leadership are still top concerns

The Deloitte report also reveals that traditional processes are not producing leaders fast enough: 56% of respondents report that companies are not ready to meet their leadership needs, and 22% say their organisations have no leadership programmes for Millennials.

Culture was rated important or very important by 86% of respondents, and 85% rated engagement as important or very important. Culture and engagement are linked, but the Deloitte report separated the two in this year’s survey after combining them in previous ones. “Culture describes ‘the way things work around here,’ while engagement describes ‘how people feel about the way things work around here,’ ” the report said. Just 28% of executives in the survey reported understanding their organisation’s culture.

If the leaders don’t understand it, they can’t model it, and an organisation devoid of a defined culture has a harder time keeping its workforce engaged. Only 12% of respondents believe their companies are “very ready” to deal with employee engagement issues.

Related CGMA Magazine content:

“How Multinationals Can Improve Their Leadership Development”: Development Dimensions International, a global human resources consulting firm, developed six practices to help the many multinationals struggling to develop leaders as they rapidly expand their businesses globally.

“The Four D’s of Better Strategic Planning”: Instead of limiting scope and paying attention to issues that need fixing, companies should spend more time focused on their opportunities. The process of appreciative inquiry – discovery, dream, design, and destiny – can turn fix-it organisations into more strategic ones.

—Neil Amato (namato@aicpa.org) is a CGMA Magazine senior editor.