How to put organizational design into practice
Learn why putting organizational design into practice is harder than it seems but is the key to continuous business performance gains. This article explains how to make your design real by pairing micro-level design with workforce planning.
Published by Rupert Morrison
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Good strategy is strategy that’s executed. In the previous articles in this series (read article 1 and article 2 here), we’ve been in the world of design and planning, of models and frameworks, illustrating how things should work according to hypotheses and interventions. But we can’t stop there. There’s a whole other side to the story: putting the design into practice.
Overall, the series summarizes how you can achieve continuous performance gains through effective data-driven organizational design. It isn’t the design, however, that will ensure you make these gains; it’s the execution of the design. An architect can draw hundreds of pictures, floor plans and electrical schema, but if nothing is built, so what?
Theory is only valuable if it works in practice. So, once you’ve decided on the design or plan, what do you do then? How do you ensure success? How do you sustain it? How do you preserve gains and drive more? And how do you mitigate risks?
Putting organizational design into practice
There’s a lot to consider when putting designs into practice and it deserves a book in itself. Meanwhile, this article is intended to give you a high-level understanding of what needs to happen to implement your design effectively. As the diagram below shows, there are four main stages to this:
- Planning for implementation
- Assessing impacts, and plan communications
- Managing talent transitions and consultation
- Optimizing on a continuous basis
In addressing these stages, it’s useful to first take a step back and think through how many things can and will go wrong, often for predictable reasons. Let’s look at some of the common traps that are easy to fall into when planning to implement your organizational design.
Stage 1: Plan for implementation
As the saying goes, ‘anything that can go wrong will go wrong’. When it comes to a redesign or transformation, there’s ample room for things not to go to plan. In some respects, it would be a surprise if any design was implemented 100% as anticipated. However, there are three generic traps that are often the main cause for a design derailing.
Allocating insufficient resource
To get an implementation right takes considerable effort and executive sponsorship is vital throughout the process. Making the design real is all about a conscientious, thorough and dogmatic eye for detail and approach to delivery. There are no hard-and-fast rules in terms of the number of resources you need or the time required, but before you begin the implementation stage, ensure you have the following:
- a detailed plan with appropriate staffing
- significant contingency times in place
- an appropriate budget (you can’t afford not to)
Too many initiatives
Too much change inevitably leads to failure. You must prioritize based on your case for change and pick the most important initiatives to implement first. Don’t pick too many and ensure you see through those you do pick. When you think they’re done, you’re probably only halfway there.
To make change real and sustainable takes a dogged and relentless commitment to a limited set of initiatives. Prioritize micro design changes based on ease of implementation, return on investment, payback, scale of impact and whether other initiatives are dependent on the changes you intend to make.
Forgetting the basics
Getting the basics right requires an understanding of what’s core to your organization and making sure you’re world-class at achieving that. This approach is central to both good strategy and the execution of that strategy.
To understand this, go back to your micro design and define the main goals, objectives, processes and competencies. It might sound simple but the process of defining which elements within the micro design are core is likely to cause a huge amount of debate among your design team. Try to keep it focused, principled and get the work done to achieve your objectives.
Stage 2: Assess impacts and plan communications
Once you’ve done all your detailed design and developed a strong perspective about how it will work, it’s time to begin implementation. This is both a change process and a mechanical one governed by employment law. It calls for you to take everyone with you and for you to follow the right steps at the right time.
As soon as employees hear there’s a change, they’re likely to start internalizing a range of questions. “What do you really mean by change?” “How will it affect me?” “Is my job on the line?” People’s first instinct will be to jump to the downsides. Even though some employees won’t be directly impacted, they’ll still be affected by how you treat those that are impacted and the fairness of the process.
What you’ll notice is that a great deal of the work needed to make change happen actually starts at the early macro and micro design stages. But be careful not to see the macro, micro and implementation stages as fully sequential. Although one follows another for the most part, you need to think about the main elements of execution throughout.
Also, you need to start the communication and consultation stage way before you get to the implementation. The place to start is by getting your head around exactly what’s going to change from every angle.
Stage 3: Manage talent transitions and consultation
Transition management is the process of determining which employees get which positions in the new organization and the process of making that happen.
At the end of the process, you need to ‘populate’ the ‘to-be’ organization. Some employees will be automatically transferred as their roles are not at risk; there’s no change and their positions won’t be open for others to apply for. This is called ‘opt in’. An example of this is likely to be the CEO. For many positions., it’s common practice for employees to enter a selection process to determine which positions they’ll hold.
To manage this process, you need a workflow, the outcome of which is people matched to positions in the ‘to-be’ organization and consultation for those without a position. The challenge of managing talent transitions is a great example of the benefits of using the right data and technology.
With a data-driven process enabled by technology, you can mitigate the potential costly risk of missing transition candidates, treating people inconsistently or not being able to demonstrate an audit trail of decisions.
Stage 4: Ongoing optimization
Once you’ve implemented the plan and employees have transitioned to the ‘to-be’ organization, you need to begin ongoing monitoring and tracking of KPIs. How you monitor and track performance is a separate subject, so the rest of this article focuses on a key component of optimizing your new organizational design: workforce planning.
Getting to grips with workforce planning
How do you know that you’re getting the right people doing the right things at the right time? In the right numbers and with the required skills? How do you manage this over time? What’s your governance process for dealing with changes and how do you keep a grip on basics like budget versus actuals?
These are all fundamental questions and the answers are beyond many people’s reach. If there’s one area of poor organizational performance across all industries, it has to be workforce planning.
To remind ourselves, workforce planning is essentially about the supply and demand of workers – whether permanent, temporary, full-time or part-time – that’s required each week, month and year. Effective workforce planning allows you to see the gaps between actuals (supply) and the plan (demand), so you can understand the gaps and find the cause. It may be that you didn’t recruit sufficiently, or the churn rate was higher than you assumed. Only when you know why you’re off plan can you do something about it.
Understanding the link between micro design and workforce planning
It’s important to remember that micro-level design is the foundation from which to start your workforce plan. These two things are inextricably linked. While micro design compares the current ‘as-is’ and desired ‘to-be’ states of the organization to find the variance between the two, workforce planning is about how you’re going to reach the ‘to-be’ state over time.
So, once you’ve completed the micro design and signed off the ‘to-be’ numbers, it becomes the role of the workforce planner to get the organization from the ‘as-is’ to the ‘to-be’ state by ensuring the supply of labor.
There’s no doubt that workforce planning is a difficult thing to get right, especially if you’re trying to do it manually with a tool like Excel. But with the right analysis, you can understand the drivers of change and how they impact your organization. It can also reduce debate about whether you should alter plans and why you took certain decisions in the past, because with data people can see how the organization fluctuates.
Being led by data and keeping your micro design in mind puts you in the best possible position to make fast decisions that will enable your workforce to generate maximum value for your organization, based on business opportunities and risks.
This article is an excerpt from Data-Driven Organization Design (2nd edition) by Rupert Morrison, founder of Orgvue. The book breaks down the task of organizational design into three blocks: macro design, micro design and implementation. This excerpt is taken from chapter 3 of the book, which looks at how to manage change when implementing micro design and how workforce planning is a crucial part of making your new organizational design real.
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