Organisation Design in a Post-Pandemic World: The Moment of Truth has Arrived

COVID-19 has had a profound impact on the workplace but, whilst damaging and unsettling, this also represents a valuable opportunity

By Martin Smith, Executive Director, SH Consulting at Sheffield Haworth

In a post-pandemic era, organisations have been forced to rethink their strategies and transform the way they operate. In combination with enforced homeworking, a change in human attitudes and behaviours has forced a response from business leaders, leading to a streamlining of processes and a determination to break down traditional silos in an attempt to create more agile and adaptable business models. Herein lies an opportunity.

 

“Increased autonomy, more cross-functional ways of working, a more team-based approach to performance and reward – the past year has forced organisations to reconsider their organisation’s design from a completely different perspective – making it more human centered. That is what the focus needs to be – how do you enable this. Rather than focus on traditional “boxes and wires” and “reporting relationships.

Shivani Maitra – Partner and Global Human Capital Growth Leader, Deloitte

 

The organisation design (OD) playbook has been flipped on its head this past year, as boards and management teams across all industries and geographies get to grips with the ‘new normal’. Whilst it’s clear that a reimagining of what work is, how performance is measured, and what good looks like is called for, it is important that those in charge of such initiatives proceed with caution.

It is a fact that less than a quarter (21%) of organisational-redesign efforts are successful. Although we can attribute a number of things to COVID-19 and its knock-on effects, the unsuccessful outcomes associated with the majority of redesign efforts will not be one of them, highlighted by research from McKinsey & Company as far back as 2014. Failure is common, expensive, and demoralising, but it doesn’t have to be that way.

Companies who consider the following dos and don’ts when it comes to redesign efforts, drawn from my experience of supporting listed, private, and PE-backed companies over the years, will likely increase their chances of success.

 

DO: Treat Covid-19 as a catalyst for change.

The pandemic has caused incalculable damage across the globe, with far-reaching personal and economic consequences to bear. However, times of crisis are also times of opportunity, the chance to build back better than ever before. Respond in the right way.

 

DON’T: Confuse organisation design with restructuring.

Structural change should be a consideration of any redesign, but focusing on structure and structure alone is the pitfall of all pitfalls.

The discipline of shaping an organisation to become more effective in achieving its vision and purpose is complex, but what underpins it is a system that aligns people, work and competencies with business strategy and objectives. It is about interconnectedness and establishing a workflow that drives better performance, linking changes made to an operating model with the subsequent impact on human motivation and behaviour.

As such, don’t consider structure, process, and behaviour separately. Address them as a whole.

 

DO: Survey the scene and set clear design principles. Move at pace but be considered.  

Keep the fundamentals in mind and be clear about your goals before you start. Don’t be tempted to skip this step – with urgency comes complacency.

Whilst every business is different and there is no one-size-fits-all model when it comes to organisation design. There are some basic principles that every design leader must keep top of mind as they go. These guidelines, authored by design and development experts at PwC and Strategy&, resonate with me:

  1. Declare amnesty for the past
  2. Design with “DNA”
  3. Fix the structure last, not first
  4. Make the most of top talent
  5. Focus on what you can control
  6. Promote accountability
  7. Benchmark sparingly, if at all
  8. Let the “lines and boxes” fit your company’s purpose
  9. Accentuate the informal
  10. Build on your strengths

 

DON’T: Be narrowminded. You MUST seek to shift mindsets.

You may be familiar with the name Ricardo Semler. He is the majority owner of one of Brazil’s largest conglomerates (Semco), and the author of the best-selling book Maverick!: The Success Story Behind the World’s Most Unusual Workplace. On the importance of mindset changes, he has this to say:

 

“To survive in modern times, a company must have an organizational structure that accepts change as its basic premise, lets tribal customs thrive, and fosters a power that is derived from respect, not rules. In other words, the successful companies will be the ones that put quality of life first. Do this and the rest – quality of product, productivity of workers, profits for all – will follow.”

 

Ensure you consult your people and utilise them as agents of change throughout your redesign efforts. Happy employees are good for business.

 

DO: Embrace new ways of working.

Organisations must seize the moment and do away with suboptimal old habits and processes. 

It’s not just a question of where your employees will work from physically, but how their work should be done and on what scale it should be measured. Questions should also be asked concerning talent, role profiling, and the art of collaboration in a hybrid working model.

There will be tough decisions to be made, so leaders must be empowered from the top and drive efforts where needed. 

 

DON’T: Try to do too much, too soon. Less is more.

 

“Doing little things well is a step toward doing big things better.

 

This quote, by the Dutch post-impressionist painter Vincent Van Gogh, could easily be applied to the design principles on which successful organisational designs are based. Nothing more need be said.

 

DO: Adopt a model that is flexible and adaptable to change.

You should look at organisation design as one continuous journey, work that is never finished.

Leading design experts I have worked or connected with over the years have been unanimous in their view that data underpins this journey, but it is data that is constantly changing. As such, leaders must task themselves with visualising movement over time, aligning their actions with the constant ebb and flow of the data.

 

In summary

Whilst business leaders across the globe are feeling the pressure to adapt and refocus in this post-pandemic era, they are unlikely to survive and thrive unless they practise holistic rather than one-dimensional thinking.

 

“Changes in any one of the parts will impact the others. Misalignment between any of the components is a near guarantee of underperformance.”

Steven Shrago – Global Lead Organisation Design, Adidas

 

Yes, it is right to consider organisational reform, but be clear that your key goal is to connect your structure with your people and your processes. Analyse the data, identify your strategic goals, and proceed in manageable stages.

With these principles in mind, you are far likelier to be one of the 21% of companies for whom organisational redesign was a success.

Get in touch with Martin if you’d like to discuss any of the issues raised in this article.

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