Understanding Organization Structure for Real Change - ON THE MARK
28th January 2021

Understanding Organization Structure for Real Change

What is the key to truly implementing a successful organization design? Start by understanding your organizational structure.

It is common practice for leaders to refer to “structure” by simply defaulting to org charts. While org charts are a part of structure, they only account for a small part of an organization’s design. Org charts are used to define the reporting relationships in an organization, and cannot be used to define the structure alone. If you want real change, understanding and alignment, you need to look at the whole picture.

To get to the core of structure, leaders must focus on the work and how it’s bound together. Only then can this prove clearly defined before you can organize people around that work.

How to Align Your Organizational Structure: Start by Looking at the Bigger Picture

By spending the time upfront to understand what the actual value-creating work is and gaining this alignment and understanding, then it creates the capacity to move faster further down the line when it comes to the people and implementation.

So, if you start with that premise in mind, how do you do it?

Step #1: Establish key foundation decisions. Look at your current structure. Then, think about the questions ‘What should we be?’, or ‘What do we want to be?’.

From here you establish key foundation decisions, parameters and constraints to move forward. If this step is neglected, it can result in problems. When you leap into organizational structure and design without having some key foundation decisions, you are left without the ability to navigate further downstream. You end up debating for the sake of debating, without any agreed-upon criteria to make decisions and you go around in circles.

Moreover, the dilemma and risk you run when you delve right into structure? You end up making decisions without looking at the bigger picture — or even worse, decisions are made based on who’s the loudest. There’s no real reason why you would do one option over another.

That’s why the key to going fast in the long run means going slow throughout the decision-making process.

When an organization has to make a decision that will impact hundreds or even thousands of consumers and staff, leaders must base that decision on sound reasons.

Are key foundation decisions in place to serve as a basis for your decision making?

The three questions any leader must ask before jumping into a new operating model:
  • What are we trying to be in the marketplace?
  • What are our key differentiating features?
  • Then, what does our operating model need to do to reach those?
More resources on aligning organizational structure and design:

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OTM is the leading global boutique organization design consultancy with offices in the USA and UK. With over 450 successful redesigns and operating model modernizations completed, OTM is owner of the industry’s most integrated, comprehensive and holistic organization design solution. OTM enables its clients to realize their future ambitions.

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