Before you begin any organization redesign process, be mindful of this underpinning principle .... When redesigning an organization if you make a change in one area it has an impact on other areas.
Simple analogy: if you put mag wheels on a car and do nothing to adjust the steering, braking and suspension of the car it will not perform to it's optimum.
This is why the following three principles must be understood by anyone who is about to undertake any type of organization redesign.
The entire system has an effect on each element within the system
Every element in the system has an effect on the entire system, and on each other
No matter what you do, the two points above will always hold true
Lets take a look at how this works.
Let's say you decide to improve business results by moving a significant proportion of team members' salary package from 'pay by the hour' to a performance based bonus.
What would be some of the organizational systems that could be impacted by such a change and that you will need to ensure don't hinder the success of this change? Let's take a quick peek:
The Information System - The quantity of information given to team members may need to be increased. The speed at which they receive it and their ability to use that information to improve results may need to be enhanced. You may need to implement a robust performance reporting system so people can see immediately how they are tracking and make whatever adjustments are necessary to improve performance.
The Training System - You may need to implement new skills training for people to enable them to understand how to interpret information. You may need to train them in new skills that enable them to do their jobs more effectively. You may need to train them to think like business owners and entrepreneurs.
The Organization Structure - Departments may need to be integrated or roles significantly changed so that artificial/turf barriers don't get in the way of the program working.
Decision-making System - The way decisions are made and the level at which they are made may need changing. Authority to decide might need to be taken down to lower levels so that people are able to make decisions that enable them to more quickly influence/improve results.
Tasks and Technologies - May need to be improved in order for the bonus system to achieve its objectives (which is to improve business performance).
Not making adjustments in interdependent systems is sure to make any organization redesign sub-par.
Unfortunately I've witnessed people come and benchmark against organizations I've worked with, pick up on elements of our organization design and decide to implement those elements and then fail miserably.
Good question! Well...
They may have seen that we paid for performance --- but not fully grasping the three principles of organization design -- they may not give enough emphasis and consideration to how they need to change/enhance other interdependent systems to enable the program to succeed.
So let's take a look at an organization redesign process that helps you to think about the various systems (and done well will help you to build a high performance culture)
I've successfully used this model with several clients
to help them create high performance in their organization
Organization Leader: Generally the most senior person in the organization who sets the direction for the change process and names and appoints the members of the Steering Team.
Steering Team: Generally consists of a cross section of key (senior) leaders, decision-makers and stakeholders from within and external to the organization. For example, if your workplace has a strong union presence then you would do well to have a senior union organizer as a member of this team. This team is responsible for:
Design Team: Typically consists of 6-12 people, from a diversity of functions. These people should come from both leadership and front-line ranks. The team should include at least one person who is on the Steering Team (this person is the bridge between the two teams -- a tricky role so make sure you get someone really, really good at influencing and thinking at both strategically and grass roots practicality levels.).
The Design Team's role is to:
Do the work of analyzing the current design and then making recommendations for the new design choices
Regularly reporting back to the functional teams (see below ... Implementation Teams) on the design choices being recommended
Get input from the Implementation Team about the recommendations being made ... (information to and involvement of everyone who is going to make the organization redesign process actually come alive is critical! ... Red bandage critical! When it comes time to implement you don't want the people who are actually mostly impacted by, and responsible for, making the change happen to be surprised//confused/suspicious/angry/annoyed at not being consulted.
Implementation Team: As indicated above these are the people who are actually going to have to use the new systems/ideas/organization redesign. They are responsible for implementing the design choices recommended by the Design Team (and approved by the Steering Team) so that the organization transforms from its current state to the new high performance state.
If you haven't kept them on board throughout the process ... if you haven't asked for and/or listened to their input then expect your organization redesign process to fail!.
Renewal Team: A team set up after the Implementation who, on a regular basis (e.g. yearly) monitors and assesses to what degree the organization redesign does what it was intended to do. This team makes recommendations for further changes as required.
When I worked at Colgate-Palmolive (one of the best companies ever!) Labrador, Australia facility, each year we shut down our factory for one or two days and brought everyone who worked in the building together. Our focus was on looking at our design choices and assessing which design choices were holding us back and which were pushing us toward better performance.
At one of these Renewal retreats our team members pushed us (the leadership team) to upping the anti on their authority to make decisions (which was already pretty high -- but this new level that they pushed us to certainly sent our accountants at head office into a tail spin - but that is a whole other story).
However in that first year by changing some of our 'authority to decide' levels it saved the company close to $300,000.
Consultant: Recommends and trains the Design and Steering Teams in how to use the design model. The Design Team training is in far greater depth helping them to understand and learn the tools to be used during the re-design process.
Provides overview training to the Implementation Team. All teams must understand and have commitment to the organization redesign process. If this is not achieved at all levels, then the organization redesign process should not go ahead.
Throughout the organization redesign process, her or she offers suggestions about best-practice design choices and points out design flaws the Design team may overlook. Helps the team stay focused and on track.
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