Organisational Design: Let’s Get Intentional

Last week we launched Culture Correspondence - and we did it with a bang!

We set the scene, and the context is this; HR professionals have lost tolerance for having to continuously dig even deeper to navigate their roles, in employer environments that aren’t appropriately considerate of their people and culture responsibilities.

One part of the HR toolkit that feels simultaneously incredibly needed and particularly under-appreciated right now, is effectively designing for sustainable organisations.

At a time of anxiety over job security, mass layoffs and (as discussed at our last webinar) the associated culture debt that is incurred, a more forensic lens is being applied to the sustainability of a company’s ‘org design’ at any given time…. And that’s a good thing. Organisational design requires the thoughtful intentionality inherent in any proper design process.

Here’s a Culture Correspondence HR checklist of the foundations we believe are required in order for org design to thrive;

  1. Establishing an intentional organisational design approach (read on for some suggestions!) 
  2. A proactive organisational structure. Ie: one that prepares the organisation to achieve mid-term goals, not just to fix a short-term problem (it’s super hard to be intentional with organisational design in businesses that lacks clear strategy)
  3. Identification of alternative resourcing strategies wherever full-time, permanent roles aren’t the right solution
  4. HR partnering with hiring managers to design remits that effectively bring the org structure to life, unlocking meaningful jobs 
  5. An effective HR influence on wider business operations, including operational efficiency, knowledge bases and general employee enablement tooling

Top of our HR Checklist is establishing an intentional organisational design approach… It’s top of the list for good reason! 

The Traditional Approach

Traditional organisational structures are those that prioritise departmental reporting lines and teams designed by function. These structures are characterised by strict hierarchies, rigid job roles, and well-defined chains of command. These teams are often structured by a department lead, who is building a structure optimised for their departmental goals. We’re all used to these structures. We are all used to their problems, too!

The traditional approach is optimised for departmental success, sure - but by definition, this means company-wide, cross-functional outcomes aren’t the focus. Information handovers, data flows, collaboration and project visibility all become harder in this environment, so a traditionally designed organisational structure requires an increase in operational investment to avoid missed opportunities, and to nurture the sort of joined-up innovation that companies need.

Vertically aligned, traditional, hierarchical organisational design approaches were once the norm, but they’re often simply not agile enough to meet the changing needs of the modern workplace. Additionally, these structures are not agile enough to adapt to changing market conditions... As recent times have shown, in a rapidly changing context, the ability to quickly adapt is essential. The requirement to not over-hire is becoming clear. Traditional organisational design approaches are prime territory for bloated teams.

The Customer-Centric Approach

An Organisational design approach that aligns neatly with the customer journey, is a more cross-functionally optimised one when it comes to important indicators of business success like customer satisfaction and loyalty. This version of organisational design works well for enabling customer maturity models and sees more multi-skilled teams collaborating across the various stages of the customer lifecycle.

An organisational design that places the customer at the centre of internal team structure, does so to not only deliver a positive experience for the customer at every touchpoint, but to nurture the customer through a connected, deliberately crafted experience. These organisational structures tend to see better customer feedback loops and better customer insight collected, analysed and responded to. And all this definitely sounds better than a traditional approach. But there is still something missing. 

The Skills-Based Approach

A skills-based organisational design approach applies a primary lens of understanding the transferable skill every individual brings to the business and how to combine that skill into self-correcting teams. In a skills-based structure, inclusivity is more likely with teams formed based on the required skills for a particular project or task - not job titles. This provides variety, flexibility and the opportunity to maximise the benefits of the fullest range of expertise and perspective present within the company at any given time.

An established understanding of skill (defined by in-job ability + human-skills, traits etc.) also enables businesses to identify proficiency and confidence gaps. People want and deserve meaningful work, and these organisational structures are more likely to provide it. This all sounds super dynamic, right? And also, like the fairest way to ensure careers and people experience are effectively supported by organisational design.

The risk of a poorly implemented skills-based structure, though, is not getting the right balance between stretching individuals to the appropriate degree (encouraging continuous learning) and abandoning people on tasks they’re potentially encountering for the first time.    

So What’s the Best Approach?

How a business resources its projects and delivers its value is important. Companies are so often chasing maximised productivity, that a customer-centric philosophy and skills-based organisational design should appear more attractive than traditional, hierarchical structures. Making that change is a significant step for many businesses.

Things to consider in addition to the chosen organisational design approach should include;

  • Making sure employees’ voices aren’t missing in the conversation; they are experiencing the day to day of projects, teams and dynamics, they should have an influence on continuous improvement. 
  • Departmental bias and agendas need to be unearthed and addressed with confidence and in psychologically safe ways (empire-building needs calling out for what it is!) 
  • Leaders and managers need to be suitably supported to approach job design differently, and to prioritise impact-driven remits over task-performing ones 
  • Effective advisory influence is needed to ensure objectivity and pragmatism. The HR function should provide this internally, but often benefits from additional sponsorship from for example, the Board or company advisors

Ultimately, the first step all HR functions can take is to emphasise internally just how crucial it is for businesses to be intentional with their organisational structure, and to start the leadership discussion about how the company is going to craft its own organisational design accordingly. 

Word On The Street

Directly related to this week’s theme of maximising skills-based potential, Jo Dalton has been recently pondering the notion of wisdom-wastage in early stage businesses on her LinkedIn, both from the perspective of potential ageism in the tech sector and the important question,

"Are businesses with real purpose, using tech for good, changing the world, getting access to the right boards and advisors?"

What do you think? You can join the conversation here. 

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