An organisation’s structure is an important aspect that propels it towards its chosen purpose and goals. It is the driving force that can push an organisation to perform, achieve, grow and gain a competitive advantage. However, it must be aligned with the strategic organisational goals in order to achieve the desired results. Ideally, an organisational structure must enable smooth communication between the various stakeholders across the organisation. It should be such that it ensures a smooth flow of information by defining roles and responsibilities, working relationships, coordination between multiple functions, managing performances and helping build strong managers and leaders.
An inefficient organisational structure can lead to:
When organisations face these issues and fail to achieve their goals, they turn to redesigning their organisational structure. Other reasons for doing so could be political, cultural, market- or competition-related, technological, regulation-related, growth-oriented, etc. Sometimes, leadership changes, mergers and acquisitions also lead to a redesign of the organisational structure. More recently, in the post-pandemic era, many organisations chose to redesign their structure in response to their digitisation needs, which helped them to become more responsive and flexible.
Unlike the earlier hierarchical models, the new models are more talent-oriented and meant to drive employee experiences. These models are open to the dynamic changes dictated by the present scenarios, inspire employees to perform better through collaborative approaches and push the organisation to create a robust ecosystem. A successful organisational structure redesign will affirm optimum resource utilisation aligned with the company’s goals and growth and reduce costs through improved decision-making. It, thus, becomes the foundation of future-ready organisations.
So, what are the factors to be considered while redesigning organisational structure?
The starting point of an organisational structure redesign is its purpose. If the purpose and goals have changed, then the structure will have to reflect the change throughout and align towards achieving them. If not, it could be about asking the right questions to know what issues are stopping the organisation from achieving its goals. The existing structure will have to be tweaked to smooth out the bottlenecks to make it work.
Often, many organisations believe that changes are needed to address internal issues only. However, the changes could be external, such as meeting customer needs or new regulations, market trends due to competition, disruptions like the pandemic, changing industry norms, socio-political environments, etc. One of the internal needs could be simplifying or automating workflows and related to interdepartmental changes to accommodate the flow of communication and collaboration. It could also be employee considerations that can lead to a better talent management strategy, leading to transparent performance assessment systems and clear career growth paths. Often, it could also mean incorporating industry best practices across the organisation for effective resource utilisation through smoother and simpler standard processes. Let’s now look at the phases or processes involved in an organisational redesign.
The organisational structure redesign involves the stages mentioned below. These are mentioned briefly here, just to set the context. However, every phase is comprehensive, involving multiple activities.
The first step is to assess the existing organisational structure against the backdrop of the needs that necessitated the change. This step will help identify the scope of the change in organisational structure. Ask the following questions:
Map each identified issue to the root cause that led to inefficient organisational performance. The new structure will have to find solutions for the root causes and not merely fix them.
The root cause analysis (RCA) should bring out what failed in the previous structure. The RCA may require a change in the organisational culture to ensure it is more aligned toward achieving goals.
Insights from the previous three stages should help map toward future goals and industry trends to prepare a revised model.
Ideally, an organisation should not restructure often. And, for that, the think tank should spend time across all steps, especially this one, to assure that the revised model suits all needs and solves all previous issues, possibly even those in the foreseeable future. Evaluate various models and consider innovative models that can adapt quickly to future changes.
This step will involve many other steps, like people movement, reskilling, solving conflicts, bridging talent gaps, etc. The new model will also need periodic evaluation to see if it is on course.
HR lives and breathes the organisation’s purpose and goals in today’s dynamic business landscape. Lean organisations have strategic HRs that blend conventional HR goals with those of organisational development (OD). It is imperative, therefore, for HR consulting to be a part of the organisational structure redesign. Also, a lot of organisational structure redesign is about people, and HR knows the pulse of the people best. HR consulting can help identify or validate the new structure. It can also play a vital role in arriving at the purpose and aligning the new organisational structure towards it. It can create strategies to ensure that the new structure works and delivers as desired. The new organisational structure will not yield desired results without input from HR.
Let us now look at how organisational structure consulting can help.
The role of HR consulting in redesigning organisational structure is vital, like that of a partner, to ensure things go right at every step. Whether zeroing in on issues and their root causes, identifying a new purpose, assessing against the old structure or helping create new ones, HR consulting is a must. And when it comes to the most significant part of an organisational structure redesign, the people—HR—have to be at the forefront, leading the change at every level, from leadership to entry level. Of course, for HR, like charity, change begins at home! They have to reinvent themselves as well. And this is where a seasoned partner like Careernet can step in to reinforce your efforts.
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