is critical for the success of a business and it can without a doubt feed or
starve a business performance.
What is Organizational design?
is far more than organizational structure. It is about:
- Clarifying roles and assigning responsibilities.
- Assigning the right people to the right roles
- Structuring each single layer of the
organization. This includes establishing who controls the resources and who
reports to whom.
- Tuning the organizational design with the
business strategy and aligning the organizational structure with the business
goals and objectives.
- Determining how information flows within the
- Building on your strengths based on the available
resources, capabilities and practices.
- Identifying errors or areas that need to be
improved to enhance productivity, efficiency and overall business performance.
Why is Organizational Design important?
- Clarity: Everyone is aware
of who is responsible for what, who controls respective information and
resources, and to whom they should report to.
- Collaboration: The
organizational design is based on the cooperation and collaboration of various
departments and individuals in order to achieve a shared goal.
- Motivation: Having knowledge of what is going on within the
organization can significantly enhance the employees’ motivation and
willingness to work and perform at their best. On the other hand, if there is
no organizational design, employees will feel confused and will be demotivated
- Accountability: Having clear
roles set out ensures that your employees remain accountable for their work. For
instance, if a mistake has happened, you can easily trace it back to the person
responsible for it. This way you can check and monitor your employees’ work,
without them feeling that they are being micromanaged.
What should the organization design include?
- Strategy: Strategy is the
first and foremost element that your organizational design should take into
account. The structure of your
organization should be aligned to your business strategy and strategic
- Process Flows: Next, it is
important that you put forward the core processes that drive your business
strategy. Think about how information flows within your company and how the
various departments interact with each other to get the job done
- Organization Structure: Another key element is the structure of your organization. How do you want
your business to function to achieve your goals? What is the best operating
model for the type and nature of your company?
- Governance Structure: Additionally, you need to think about the decision-making within the
organization. Who is responsible for what? Who reports to whom? Who makes the
- Implementation Plan: In the case that you are changing your organizational design, you need to
have an implementation plan in place. Look into the timings and the transition
period of this change. Will it be implemented all at once or will you split the
implementation into milestones? You will also need to devise a team that will
lead the implementation. Make sure to select accountable and devoted
individuals who are going to be committed to such a change.