One of the things I enjoy doing is meeting executives from different organizations who freely share their business and leadership challenges with me. As well as help me understand how hard it is to run their organization, they share with me what they have attempted to do to meet a business environment as the one we live in today.
A constant theme during my meetings has been the struggles management meets in aligning strategy with people and structures, as they rethink their strategies and change the way they operate. One little problem I found was changing strategies, did not necessarily cause organizational design, which at an initial outlook shocked me! I have come to know the reason behind change in strategy in a lot of organizations is a reactive approach to an economic crisis or an unforeseen event. Unfortunately the focus is switched to markets, products or competitors and not the big picture and as a result of that, the objective behind the strategy is not being achieved.
Alignment of structure, roles and functions is a necessary condition of a changing organizational strategy in order to enable the application of it. The lack of change in all these areas causes an unclear sense or responsibility, lack of experience, and an inefficient business process. An outdated structure can result in unnecessary ambiguity and confusion and often a lack of accountability. Poor organizational design and structure results in contradictions: confusion within roles, a lack of co-ordination among functions, failure to share ideas, and slow decision-making bring managers unnecessary complexity, stress, and conflict. Often those at the top of an organization are oblivious to these problems or worse; but they pass them off as challenges to overcome or opportunities to develop.
There are simplified steps that managers can take towards creating aligned structures and people to their newly developed strategy.
Work with the current structure: Reorganizing when results are not what you need them to be is a convenient way to create the appearance of taking decisive action to reduce costs, prioritize, innovate, etc. In reality does this cause simplicity in operation or complexity; is a question you need to ask yourself prior to spending relentless effort in reorganizing? Most organizations can be made to work if leaders set the right goals, hold people accountable, streamline end-to-end processes, and put in place appropriate disciplines. In the absence of these (and other leadership actions) any structure can appear to be dysfunctional.
Make sure that structure is aligned with strategy: It seems obvious that organizations should be designed to advance business strategies. But many times strategies evolve and change while seasoned managers clutch tightly to their old ways of structuring their units and organizing their teams.
Structure around purpose instead of personalities: While organizational structures are usually portrayed as sets of interconnected boxes, the reality is that the boxes contain human beings with strengths, weaknesses, and personalities that often don’t fit with the logic of the organizational design. But instead of directly dealing with those “misfits,” most managers make accommodations to the design of the organization. This leads to structures that don’t quite work as they should.
Solving the dysfunctional design puzzle in your organization requires involvement of senior executives to adjust the broader design. Leading by example within your function might be the best way to make senior executives believe in the need for organizational design. But a good way to start is to ask yourself these three questions:
(1) Is the problem the structure, or the way we are managing it? (2) Does the structure match our strategy? (3) Has our organization design been compromised by accommodating to personalities? Starting a dialogue like this may not solve everything, but it might help you start shifting those organizational pieces into their correct place.
You can tackle these tough questions with your team or with more senior managers. What is your experience with trying to change organizational structure?