Developing and evaluating Organisation Design options

There is no perfect organisation design, if there was then there would be a template and every organisation would apply it to their business.

The optimal organisation design for any organisation is dependent on its context; its history, corporate strategy, resources and constraints. Therefore, there is no “off-the-shelf” package available.

Organisation design can be a source of competitive advantage, as it can enable the organisation to become more responsive to its environment, more efficient and quicker at getting new products to market.

As a result, when undertaking an organisation re-design project it is necessary to have a design phase where multiple potential options for the future design are considered.

The reason for developing more than one option is for the potential to:

· Increase the opportunity for more objective decision-making

· Enable greater comparison across options

· Create a hybrid option from the ‘best’ bits from each option

· Force greater commitment from stakeholders as they need to make an ‘active choice’ not just the status quo

· Ensure best fit with the strategy and constraints of an organisation

To create viable design options outside of understanding the work of the organisation you will also need the following;

· Design criteria — these should be established at the start of the project, they shouldn’t in isolation attempt to articulate the solution, but do start to shape the “solution space” from which a future design will be created. They should be clearly defined statements that are agreed and signed off by stakeholders to ensure there is a secure foundation from which to build the design from

· Comparator Organisations — every organisation is different however there is value in understanding what other organisations are doing both in the same industry and in other fields- but be careful not to chase fads what works for one organisation may not work for yours. You should first attempt to identify three designs of comparable organisations (to inform the development of the options) and then one comparator for each design option that is being considered (to assist the evaluation)

· As-is — it is likely that the existing design is a result of evolving needs over time and doesn’t currently reflect the original intent nor the optimal current design (hence the reason for reviewing the organisation design). However reviewing the as-is does provide the opportunity to understand what works, what doesn’t and the issues that are been encountered (so they can be designed out).

· History — to develop new design options you need to understand the history of the organisation and lessons learned from previous attempts at a redesign either of the whole organisation or of a business unit — this exercise will also help to understand the culture of the organisation and the potential ‘fit’ of a future design

· Interactions — you need to understand how people across the organisation work with each other and how information flows in order to minimise costly hand-overs and co-ordination meetings — this is a crucial step in reducing individual complexity and reducing the cost of “getting stuff done”. This can be done through accountability mapping and network analysis

Sample of a accountability map — note the complex web of accountabilities (and this is a simplified version!)

· Leadership alignment and commitment — This should have been secured at the contracting stage, however it is worth re-assessing the commitment of the leadership team to a organisation redesign and the extent that they share expectations and a common vision for the organisation — an empowered and committed business sponsor is vital to drive this work forward

Developing and understanding this insight and sharing it with key stakeholders will provide you with a rich set of information from which to build a set of feasible design options.

Evaluation of design options

Once a set of options (typically 3–5) have been developed, they need to be objectively evaluated — it is crucial that key stakeholders play an active part in this process, in order to ensure commitment to the preferred design.

There are a number of products that can be used to help the decision making process:

· Simple pros and cons analysis — under this approach the positive and negative attributes of the design option are listed (this can be done by the design team or by stakeholders in a design workshop), the drawbacks of this approach is the limited ability to compare across options, the potential for bias and the lack of ‘weighting’ each attribute based on its relative value

· Easier/ Harder/ Change model — this is broadly the same as the pros and cons model except three specific questions are used for each model, with stakeholders adding their perspective to each question:

What does this design make easier?

What does this design make harder?

What needs to change in order to make this model work?

· Options comparison matrix and analysis — this analysis aims to increase objectivity of decision-making by assessing each design option on a range of criteria and assigning a score (from -5 to +5), the results from this exercise can then be applied to a range of decision making criteria

Sample options analysis for two design options

· Scenario testing — (a.k.a. “stress testing”) this process involves subjecting the proposed design models to potential organisational scenario’s and assessing each models ability to provide an optimal response (this could be a risk management scenario or even scenario testing a potential customer journey) at the very minimum you should be testing the “fit” with other parts of the organisation (if it is a partial redesign) in technical terms you need to assess what is happening at the interface between different business units.

As a result of this evaluation process you should have a preferred design option that can now be subjected to further validation (e.g. more robust financial analysis) and trialling.

This approach has worked for me and helped me get closer to the answer, what do you think and what alternative approaches do you take to develop potential OD design options?