Success and failures in organisation design

1. SUCCESS AND FAILURE IN
ORGANISATION DESIGN
R. Bharani tharan
RA1952001020100

2. IMPLEMENTING ORGANIZATION DESIGN
• Implementing Organization Design
When it comes to reorganizing, companies have little room for
error. The following six factors are critical to flipping the
odds of success in a reorganization:
• Synchronize design with strategy. Regardless of the
precipitating factor, the reorganization must align with the
organization’s strategy and business priorities in the simplest
way possible.
• Clarify roles and responsibilities. Of all the organizational
capabilities most required for a successful reorganization, this
set—clarifying roles and responsibilities, assigning
accountabilities, and determining decision rights—is one of the
most difficult to get right.
• Deploy the right leaders and the right capabilities. In
reorganizations, a common pitfall is tailoring the redesign around
the individual capabilities of a few important executives. Another

3. • Design layer-by-layer, not just top-down. A cascading approach to
design puts companies in a better position for success. Address the
needs of each layer, according to consistent design principles, rather
than using a top down-only design approach.
• Lower execution risk. Execution is by far the most important
capability for achieving a successful reorganization—applying a step-
by-step, disciplined approach to implementation is crucial to avoid
missteps.
• Don’t wait for a crisis to reorganize. Reorganizations that take
place prior to a crisis have a much better chance of success. During
a crisis, the odds of a successful reorganization are only 50/50.

4. ORGANIZATION DESIGN FOR
TODAY’S NEEDS
• The Smart Design approach, paired with our robust set of tools and
experts, can help ensure success in reorganization efforts. Learn more
about the solutions that synchronizes structure with strategy and
optimizes the organization for shaping target behaviors and boosting
performance.

5. FAILURE IN ORGANIZATION DESIGN
1. Making decisions and/or having sidebar agreements outside of the agreed-upon
process
• A sidebar or supplemental agreement that compromises the documented, agreed-upon,
communicated process threatens project success. These actions can open the door to
additional exceptions to the organization design process and can result in an overall lack
of trust in the organization’s leadership going forward. For example, management has set
forth a process of evaluating and selecting for all reorganized positions. Two managers
have a sidebar discussion in the hall that they really want “someone like Kim” in one of
the positions. Both managers agree and decide to put Kim in the position and determine
who will backfill her in her current position, despite already communicating that the two
positions will be posted and interviews will be conducted for final selection.
• While it may seem harmless at the time to make minor adjustments to the agreed-upon
process, the act of doing so threatens the project by creating the justification for making
larger exceptions later on in the process, as well as demonstrating to the end population
that the process is not “fair.”

6. 2. Skipping current state assessment
• Many organizations desire to jump directly to the organization design stage
before conducting a detailed current state assessment (CSA) that includes
current costs, volumes, and service levels of the organization. It is imperative
that a comprehensive CSA is completed prior to the design, as the design is
dependent upon many of the metrics and standards that are established within
the CSA. Gauging improvements in efficiency and/or performance from the
redesign often depends on an organization’s ability to analyze and compare
layers, spans, and cost-to-manage to standards. A CSA forms the basis for
these and other analyses, without which decisions are not fully informed.

7. 3.Breaking the circle of confidentiality
• It is incredibly important for participants involved in the redesign to keep project
information inside the circle of confidentiality. Revealing too much too soon to
those outside the “Circle of Trust” can threaten an organization’s level of
engagement and overall productivity. The design of a new organization structure
brings with it new roles, responsibilities, and reporting relationships. These
changes can encourage or discourage personnel, and therefore have the potential
to threaten the effectiveness of the new structure. The performance of individuals
or entire departments can be compromised if people think they will not have a job
in the future organization, and this has a network effect on the rest of the
organization. In addition, organizations may lose their most talented individuals
who feel uncertain about their future within the new organization, while being highly
sought after in the marketplace.

8. 4. Bypassing a formal change management and communications plan
• It is essential that a formal plan is developed to support the communication of the right
information at the right point in the process. Details about the new organization, along
with details of the selection process, should be communicated as they are finalized to
all levels of the organization. This will help avoid surprise or confusion about the
responsibilities and expectations during the change. If rumors conflict with formal
communication during the process, the legitimacy of the organization will be
jeopardized.
• Reorganizations can be highly successful ventures. However, by understanding what
your main drivers are on the front end, whether you are promoting growth, cutting costs,
changing culture, or changing overall operations, you can ensure you achieve your goal
of better performance. Avoiding ScottMadden’s seven reasons for failure will help
ensure your organization redesign is “done right.”

9. 5. Not knowing what you are trying to achieve
• Before moving boxes and lines on an organization chart, it is important to know why
you are doing the reorganization. Is it a result of a merger, acquisition, or downsizing?
Are you trying to reduce costs and improve efficiencies? Are you struggling with
performance issues? Are there too many direct reports, which may be impeding both
employee development and innovation? Is the reporting structure too complex? Clear
guidelines that reflect what the goals of the new organization are will help companies
ensure that the redesigned organization will attain those stated goals.
6.Structuring an organization for specific personnel
• It is not uncommon for key people within an organization to have tremendous influence
due to their tenure, expertise, or importance to certain client relationships. As a result,
there is a risk that the preferences of the individual will become a priority during
organization design rather than the objectives and requirements of the business. It is
incredibly important to separate the organization design component from the actual
selection of staff.

10. • Strategy should drive organization design, and organization design determines the type
of people who should be selected. If you design an organization based on the people, the
organization will not be set up most effectively to support the overall end objectives. Skill
sets may not match future needs and labor costs can be misaligned. And while placing a
single individual in a position that is not well-matched may appease guilt or maintain a
prior relationship, the larger organization will suffer, putting revenue and efficiency at risk.
Additionally, the individual may become disengaged over time while working in a position
for which he or she is not properly suited. On the whole, designing an organization based
on the people results in compartmentalized processes with components owned by
different people, reducing overall efficiency, and jeopardizing the organization’s support
of the overall business strategy.
7. Causing more disruption than needed
• ScottMadden sometimes encounters clients who view reorganization as an opportunity to
“clean house.” Although it is true that the need for change usually provides a good
opportunity to also address other inefficiencies or problem areas, leaders should be
cautious about causing more disruption than necessary. Drastic staffing cuts or process
changes can result in reduced employee morale, the loss of valuable talent, stagnated

11. •The END