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Organisation Structure Principles


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When a business' strategy changes, its structure needs to change with it. These 5 principles will help you design a structure that is aligned with your vision, values and business priorities.

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Organisation Structure Principles

  1. 1. © Richard Thomas The Key Principles and Steps In Designing an Organisational Structure Supporting Organisational High Performance
  2. 2. Building Organisational Excellence Organisation Focus Organisations accomplish exceptional things when their infrastructure aligns with their vision, values and priorities. “A bad system will defeat a good person every time.” Individual Focus Individuals accomplish exceptional things when their motivation and capabilities align with their organisation's vision, values and priorities. “People do not decide to become extraordinary. They decide to accomplish extraordinary things.”Dr. W. Edwards Deming Sir Edmund Hilary
  3. 3. Designing Organisational Structure © Richard Thomas Five Principles
  4. 4. Key Principles Vision, values and priorities come before structure ‣ Being clear about where you are going and how you’re going to get there… ‣ and what’s important to you as an organisation... ‣ and therefore what your priorities are. Principle #1 In Practice This Means…
  5. 5. Key Principles Organisational structure should be designed to enable you to deliver your vision and priorities ▸ Starting from the ground up to build a structure that aligns with your vision and priorities. Principle #2 In Practice This Means…
  6. 6. Key Principles Organisational structure should be designed around future requirements, not current capabilities ‣ Taking account of constraints, for example: costs, time, expertise; ‣ Recognising future potential, not just current capability; ‣ Having a capacity building mindset; ‣ Resisting the temptation to… ‣ appoint a ‘poor fit’ into a critical role due to expediency; ‣ design the organisation around the individual people you already have, rather than those you need. Principle #3 In Practice This Means…
  7. 7. Key Principles There is an inevitable tension between autonomy and control ▸ Designing the organisation to embrace rather than constrain this tension: ▸ Giving autonomy to functions closest to the customer, to maximise responsiveness; ▸ Centralising functions that control risk, to maximise efficiency; Principle #4 In Practice This Means…
  8. 8. Key Principles Reporting lines should be based on function, autonomy and accountability ▸ Function ▸ Identifying the core activities that the organisation must do to achieve its priorities. ▸ Autonomy ▸ Empowering people to make decisions and act. ▸ Accountability ▸ Clear reporting and supporting lines, within and across all functions. Principle #5 In Practice This Means…
  9. 9. Key Steps in Designing Organisational Structure © Richard Thomas The Process
  10. 10. Key Steps Agree And Record Your Vision And Values ▸ What’s your aspiration for the organisation? ▸ Why is this important to you? ▸ What legacy do you want to leave behind? ▸ What will achieving your vision mean to your stakeholders? ▸ If you were ten times bolder, what difference would it make? Step 1 Questions To Consider:
  11. 11. Key Steps Agree And Record Your Priorities ‣ Where do you want to be in 5 years from now? To achieve that, where will you need to be in 3 years…? ‣ What will you need to do in the next 12 months to get to that point? ‣ How will you know when you are there? Step 2 Questions To Consider:
  12. 12. Key Steps Define Functions Required ▸ What functions does your organisation require, to achieve its vision and priorities? ▸ What value does each function add? ▸ In what ways is each function critical to success? ▸ Which functions deal directly with the customer? ▸ Which functions control risk? Step 3 Questions To Consider:
  13. 13. Key Steps Establish Levels Of Autonomy Required By Each Function ▸ What level of autonomy does this function require? ▸ How does this function relate to the customer? ▸ How would the organisation be affected if this function was removed? Step 4 Questions To Consider:
  14. 14. Designing Organisational Structure Describe The Relationships Between Functions ▸ What are the required reporting and supporting lines for each function? ▸ Is this function close to the customer, needing autonomy to facilitate responsiveness and flexibility? ▸ Is this function primarily controlling, needing to be centralised to maximise organisational efficiencies? Step 5 Questions To Consider:
  15. 15. Key Steps Define Roles Required Within Each Function ▸ What tasks/activities does this function require, to achieve its objectives? ▸ How do the roles this function requires relate to other roles and functions? ▸ What impact would removing this role have on the ability of the organisation to achieve its vision and priorities? Step 6 Questions To Consider:
  16. 16. Designing Organisational Structure Define Expectations For Each Role ▸ What knowledge, skills and abilities are needed, for this role to fulfill its commitments? ▸ What would high performance in this role look like? Step 7 Questions To Consider:
  17. 17. Key Steps Allocate People To Required Roles ▸ Who are the people that currently meet the requirements for the role? ▸ Who are the people who have the potential to meet the requirements, in an appropriate timescale? ▸ What are the gaps in requirements, and how will you support people in bridging those gaps? ▸ How will you develop people to fill future roles? ▸ Do you need to recruit new people for this role? Internally…? Or externally...? Step 8 Questions To consider:
  18. 18. Support your Organisation in going the extraMILE™
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