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Organization design - a logical process for reinventing an organization
1. The ‘How’ of organizational
design
A logical method for reinventing an organization
1
2. Contents
Section Page
Remember flow and context 3
Overview of stages 4
Define the direction and scope 5
Define the operating model 6
Design the detail 7
Define the change 9
2
3. Remember flow and context
Flow
Be certain of your starting point and scope
From high level to detail
Context
Strategy
Change management
Be certain of your starting point
The following is a an overview of the process, which for the sake of brevity, does not go in to
detail.
3
4. Overview of stages
Define the
direction and
scope
1
Define the
operating
model
2
Design the
detail3
Define the
change4
4
5. Define the direction and
scope
In Stage One we ensure that all parties
are clear about intention and direction,
and setting up for success.
The Stage One can be sub-divided in to
four main phases; scope, strategy, project
plan, and design principles.
Foundational elements of this stage, are
understanding the current scope and
scope and building the business case;
these form the basis of both the project
plan and the latter change management
plan.
Stage One concludes with agreeing the
set of principles against which high-level
and detailed designs can be assessed.
5
Scope
• Clarify scope
• Define current
state
Strategy
• Define the
strategic drivers
• Identify
improvement
opportunities
• Build a business
case
Project plan
• Develop a
project plan
• Gain
commitment
and set
meetings
Design
principles
• Agree design
principles
6. Define the operating model
In Stage Two we carry out a high level
design of the future organization that will
guide the later detailed design effort.
This stage is typically broken in to three
phases; designing different hypothetical
designs, determining the organizational
future capabilities, and then designing the
future state operating model.
Capabilities describe functional or
operational activities to be executed to
deliver the strategy. They are not
individual skills or competencies. Rather,
think of them as groups of process areas
aligned to internal and external
requirements (e.g. customer relationship
management)
6
Design
hypotheses
• Design a set of
different high
level options
• Test against
strategy and
design principles
Future
capabilities
• Define future
capabilities
• Group similar
capabilities
Operating
model
• Design the
Operating
Model
7. Design the detail
In Stage Three we move in to the detailed
organizational design, starting with four
leading steps, before moving in to micro-
design.
Start with the detailed design of the top 2
to 4 levels (determined by scope) of the
new organizational structure, testing
different versions against the design
principles. This gives the direction to the
successive work of align business
processes, how decisions will be made,
and defining the leadership roles in the
detailed design.
The detailed design then moves on to the
development of deeper and richer detail.
7
Develop org.
design
• Design top 2 to
4 levels
Align
processes
• Align processes
• Articulate roles
needed to
support future
capabilities,
operating
model, and
aligned
processes Align
governance
• Align how
decisions will be
made in the new
detailed design
• Identify the
change to how
decisions
presently
Define leader
roles
• Define the roles
for the detailed
org. design
8. Design the detail, cont’d
In the last four steps of the micro-design
steps in Stage Three the vast majority of
the ‘heavy lifting’ takes place.
The detailed design of the entire new
organization, leads on to the job profiles
for the new organization. From these, and
using the aligned processes and
governance, one can assess the business
impacts of the change. Lastly, the
transition and change strategy can be
built to implement the new structure,
giving consideration to a phased or
staged process.
8
Detailed
design
• Design the detail
of the new
organizational
structure
Job profiles
• Define the
detailed job
profiles for all
positions in the
new
organizational
structure
Business
impacts
• Assess the
business impacts
(e.g. people,
processes,
technology,
legal/regulatory
Change
strategy
• Design the
change strategy
to implement
the new
structure
9. Define the change
In Stage Four we design and then
implement the detailed change plan, with
two concurrent elements of transitioning
the workforce and managing the business
impacts.
9
Detailed
change plan
• Develop a
detailed change
plan
• Obtain sign-off
Transition
workforce
• Implement the
change plan
Manage
business
impacts
• Implement the
business impact
mitigation plan