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10 Organisational Design Process Steps

Organisational design is the process of structuring and arranging an organisation's resources, processes, and roles to achieve its goals effectively and efficiently.

Organisational design refers to the process of creating or redesigning the structure, systems, and processes of an organisation to achieve its strategic objectives effectively and efficiently. It involves determining how various components of the organisation, such as people, tasks, roles, and resources, are organized and coordinated to optimise performance and drive success. Organisational design is essential for creating a structure and operating model that enables the organisation to achieve its goals, adapt to change, and remain competitive in a dynamic business environment. It promotes efficiency, collaboration, innovation, and employee engagement, ultimately contributing to the long-term success of the organisation.


Organisational Design is Needed for Several Reasons:


Alignment with strategy: An effective organisational design ensures that the structure and processes of the organisation are aligned with its strategic goals and objectives. It helps create a clear line of sight between the organisation's overall direction and the activities of its employees helping to improve business execution.


Improved efficiency and productivity: By designing an organisation that optimises workflows, eliminates redundancies, and clarifies roles and responsibilities, organisational design helps enhance operational efficiency and productivity. It streamlines processes, reduces bottlenecks, and improves coordination among teams and departments.


Adaptability and agility: In a rapidly changing business environment, organisational design allows companies to be more agile and responsive to market dynamics. It enables organisations to reconfigure themselves quickly, allocate resources efficiently, and adapt to new opportunities or challenges.


Enhanced communication and collaboration: Well-designed organisational structures and processes facilitate effective communication and collaboration within and across teams. It clarifies reporting relationships, establishes efficient channels of communication, and promotes teamwork, coordination, and knowledge sharing.


Talent management and employee engagement: organisational design helps create clear career paths, define roles and responsibilities, and establish performance expectations. This contributes to effective talent management, employee engagement, and retention. It also provides employees with a sense of purpose, autonomy, and accountability.


Innovation and creativity: A well-designed organisation fosters an environment that encourages innovation, creativity, and problem-solving. It can establish cross-functional teams, promote idea generation, and facilitate the flow of information and knowledge across the organisation, leading to greater innovation and adaptability.


Scalability and growth: As organisations grow and evolve, they often need to redesign their structure and processes to accommodate increased complexity, scale operations, and support future growth. organisational design enables organisations to scale their operations while maintaining efficiency and effectiveness.


Change management: organisational design is often necessary during periods of change, such as mergers, acquisitions, or restructuring. It helps manage the transition by providing a framework for aligning the organisation's structure and processes with the new strategic direction or operating model.


What are the Challenges of Organisational Design?

While there are many potential benefits to effective organisational design, there are also several challenges that organisations often face in this process. Addressing these challenges requires a thoughtful and iterative approach to organisational design, involving input from various stakeholders, effective change management strategies, and a willingness to learn from both successes and failures.


Here are some common challenges of organisational design:

Complexity: Organisations, especially large ones, are inherently complex systems with multiple departments, functions, and interdependencies. Designing an organisational structure that aligns with the organisation's goals and effectively manages complexity can be challenging.


Resistance to change: People within an organisation may resist changes in the organisational design, especially if it disrupts established routines, power dynamics, or job roles. Resistance can come from employees, managers, or even influential stakeholders. Managing this resistance and fostering a culture of adaptability and openness to change is crucial.


Communication and coordination: Effective organisational design requires clear communication channels, collaboration, and coordination among different departments and individuals. Ensuring effective communication and coordination across the organisation can be challenging, particularly when there are silos or communication barriers.


Balancing specialisation and integration: organisational design often involves finding the right balance between specialised functions or departments and integrating them effectively. Overemphasis on specialisation can lead to fragmented efforts and lack of coordination, while excessive integration can result in bureaucracy and slow decision-making processes.


Scalability and flexibility: Organisations need to design structures and systems that can adapt to changing circumstances and scale as the organisation grows. Balancing the need for stability and efficiency with the flexibility to accommodate future changes can be a challenge.


Cultural alignment: organisational design should align with the organisation's culture, values, and vision. However, cultural alignment can be challenging, especially when there are cultural differences across departments or when merging organisations with different cultures.


External factors: organisational design is influenced by external factors such as industry trends, market conditions, regulatory requirements, and technological advancements. Keeping up with these external factors and designing an organisation that can respond and adapt to them can be a significant challenge.


Evaluation and feedback: Designing an organisation is an ongoing process, and it requires continuous evaluation and feedback. Establishing mechanisms for collecting feedback, monitoring performance, and making necessary adjustments can be challenging, particularly without clear metrics or indicators of success. 


Workflow Consideration for Organisational Design Challenges

To effectively tackle the common challenges in organisational design, a well-structured workflow process can provide clarity and ensure smooth transitions.


Here’s how workflows can address these challenges:

  1. Complexity: Establish a centralised workflow that maps out key functions, interdependencies, and departmental relationships. This allows for better visualisation of organisational complexity, ensuring alignment with goals while making management of cross-departmental coordination more efficient.

  2. Resistance to Change: Introduce a change management workflow that incorporates communication loops, feedback cycles, and designated roles for handling resistance. This can guide organisations through change, addressing concerns and keeping stakeholders informed at each stage.

  3. Communication and Coordination: Design a communication workflow that outlines specific channels, reporting structures, and escalation points to ensure smooth coordination across teams. This reduces silos and improves collaboration between departments.

  4. Balancing Specialisation and Integration: Use integrated workflows to balance specialised tasks with cross-functional teamwork, clearly identifying points of intersection between departments and ensuring that collaboration is built into daily operations without creating unnecessary bureaucracy.

  5. Scalability and Flexibility: Create flexible workflows that can be scaled or adjusted as the organisation grows. Using dynamic processes, you can make room for scalability while maintaining operational efficiency and adaptability.

  6. Cultural Alignment: Implement workflows that incorporate cultural checkpoints, ensuring that each step of the design and change process aligns with organisational values and vision. This fosters cultural consistency across departments and during mergers.

  7. External Factors: Develop adaptive workflows that incorporate industry trends, regulatory updates, and technological advancements. A workflow-driven approach ensures the organisation is agile and responsive to external changes.

  8. Evaluation and Feedback: Establish a continuous improvement workflow, incorporating regular feedback loops and performance metrics. This ongoing process of evaluation ensures that organisational design remains efficient and aligned with strategic objectives over time.

By integrating these workflows into the organisational design process, businesses can better manage complexity, improve communication, and remain flexible and responsive to change.


While the specific steps may vary depending on the organisation's size, industry, and particular needs, here is a general framework for organisational design: 


Workflow for Organisational Design Process

A streamlined organisational design process is pivotal to driving sustainable growth and adaptability.


Below is a high-level workflow tailored for executives and change leaders seeking to align their organisational structure with strategic business imperatives.

Step-by-Step Workflow:

  1. Identify Strategic Objectives Define the organisational objectives: Clearly articulate the organisation's mission, vision, and strategic goals. This provides a foundation for designing the structure and aligning resources. 

    • Action: Precisely articulate the overarching goals driving the restructuring, ensuring alignment with long-term business strategy and market conditions.

    • Responsibility: C-suite, with input from senior leadership.

    • Key Deliverables: A strategic brief that frames organisational priorities, accompanied by key performance indicators (KPIs).

  2. Conduct a Structural Audit Assess the current state: Evaluate the existing organisational structure, processes, and systems. Identify strengths, weaknesses, inefficiencies, and areas for improvement.

    • Action: Execute a data-driven assessment of the current organisational architecture, benchmarking it against industry standards and future capabilities.

    • Responsibility: Internal audit or external consultancy, overseen by HR.

    • Key Deliverables: An in-depth diagnostic report outlining critical structural gaps and opportunities.


  3. Map Functional and Strategic Needs Determine future requirements: Consider the organisation's growth plans, market trends, technological advancements, and changing customer needs.

    Determine the capabilities and resources needed to achieve the desired future state. 

    • Action: Align functional roles and capacities with core business objectives, leveraging operational data to ensure optimal resource allocation.

    • Responsibility: Senior department heads in collaboration with strategy and operations teams.

    • Key Deliverables: A detailed functional matrix tied to business deliverables and resource forecasts.

  4. Clarify Roles and Accountability Define roles and responsibilities: Clearly define the roles, responsibilities, and decision-making authority for each position in the organisation. Ensure that there is clarity and alignment across different functions and levels. 

    • Action: Establish crystal-clear role definitions, delineating responsibilities and decision-making authority to enhance accountability and streamline workflows.

    • Responsibility: HR leadership, supported by departmental heads.

    • Key Deliverables: Standardised job descriptions and an accountability framework mapped against performance metrics.

  5. Design Alternative Structures Develop organisational structure options: Explore different structural alternatives, such as functional, divisional, matrix, or hybrid structures. Consider factors like span of control, reporting relationships, coordination mechanisms, and decision-making processes. 

    • Action: Develop and model multiple structural scenarios, each optimised for different market conditions and growth trajectories.

    • Responsibility: Strategic planning team, supplemented by external experts if required.

    • Key Deliverables: A set of structural models with scenario-based projections for performance impact.

  6. Evaluate and Stress-Test Alternatives

    • Action: Rigorously evaluate each organisational model, stress-testing for scalability, agility, and risk mitigation.

    • Responsibility: Senior leadership and finance, with input from external advisors.

    • Key Deliverables: An evaluation matrix and risk analysis document, highlighting the most viable structures.

  7. Select and Formalise Optimal Structure Establish reporting relationships: Determine reporting lines and hierarchies within the organisation. Specify the relationships between different roles, teams, and departments to facilitate effective communication and coordination. 

    • Action: Finalise the organisational blueprint that best supports strategic goals, future-proofing for industry shifts and internal scalability.

    • Responsibility: CEO and board, in consultation with key stakeholders.

    • Key Deliverables: A formalised organisational design document, including transition plans and structural KPIs.

  8. Implementation Roadmap

    Design processes and workflows: Identify key business processes and workflows required to achieve organisational goals. Streamline processes, eliminate redundancies, and establish efficient workflows to improve productivity and effectiveness.  Consider culture and values: Consider the organisation's culture, values, and desired behaviours. Design the structure and processes to align with and reinforce the desired culture, fostering collaboration, innovation, and accountability.

    • Action: Develop a robust, phased implementation plan, ensuring organisational readiness and stakeholder alignment across the business.

    • Responsibility: Project management office (PMO) and change management team.

    • Key Deliverables: A granular implementation timeline with key milestones, communication plans, and success metrics.

  9. Execute and Embed Allocate resources: Determine the allocation of resources, including budget, personnel, technology, and physical assets. Ensure that resources are allocated appropriately to support the organisation's strategic objectives.  Communicate and implement the design: Communicate the new organisational design to all stakeholders, including employees, managers, and other relevant parties. Create a change management plan to facilitate a smooth transition to the new structure and processes.


    • Action: Deploy the new structure in controlled phases, ensuring alignment with change management best practices and real-time performance tracking.

    • Responsibility: PMO and departmental leaders, supported by change champions.

    • Key Deliverables: Implementation scorecards, real-time tracking reports, and stakeholder feedback loops.

  10. Continuous Optimisation Establish a feedback-driven optimisation process, where structural performance is regularly monitored and adapted to align with evolving market or internal demands. A dedicated continuous improvement team, under executive oversight, ensures that feedback is actively integrated into strategies, fostering a culture of constant enhancement. Key deliverables include a dynamic post-implementation review, incorporating continuous feedback cycles to inform performance improvement strategies, enabling the business to remain agile and competitive

    • Action: Establish a feedback-driven optimisation process, monitoring structural performance and adapting to evolving market or internal demands.

    • Responsibility: Continuous improvement team under executive oversight.

    • Key Deliverables: A dynamic post-implementation review with continuous feedback cycles and performance improvement strategies.

By adhering to this workflow, leaders can ensure a data-driven, strategically aligned organisational design that maximises efficiency, scalability, and resilience.


Continuously monitor the effectiveness of the new organisational design. Gather feedback, assess performance, and adjust as needed to ensure the organisation remains aligned with its objectives. Remember that organisational design is an iterative process, and adjustments may be required over time as the organisation evolves and new challenges arise.

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