Sara Sheehan talks about the compelling current topic of organization design. She highlights some statistics about organizations and redesign that are staggering, before exploring what a successful redesign must incorporate. Sara has real expertise in this area and she shares some valuable insights.
The first point Sara makes is not to think small. Organizational redesign is not about small structural changes but how a business operates from a strategic level. What are your organization’s strengths and weaknesses and what is your long-term strategy? Sara takes a point-by-point approach on how to think about different factors that work into strategy.
In this episode, Sara Sheehan lays out a way to plan for a successful redesign by considering both internal and external factors, identifying your organization’s capabilities, and when to turn the focus onto technology and people. The steps she outlines are intended to help an organization lean into a redesign that is efficient, effective, and adaptable. It is vital to establish an improvement plan that considers everything from start to finish and Sara can help make that plan.
Resources discussed in this episode:
- Small Business Currents
- “Thriving in the Age of Disruption: A Comprehensive Overview to Organizational Redesign” written by Sara Sheehan (posted by Maria Haubrich)
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Contact Sara Sheehan | Sara Sheehan Consulting:
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Transcript
Sara Sheehan: [00:00:02] Hi there. My name is Sara Sheehan and welcome to my podcast, Transformational Thinkers with Sara Sheehan. Today, I’d like to talk a little bit about organization design. This is a very compelling and interesting topic right now. The contents that will shape this podcast is part of an article that will be published in Small Business Currents. And the title of the article is ‘Thriving in the Age of Disruption: A Comprehensive Overview to Organizational Design’. As we enter 2023 and I cannot believe it’s 2023, many businesses are needing to take a step back and take a look at how they’re performing, their position in the marketplace, and consider whether their operating model needs to change so that they can be more relevant in the marketplace. It’s a little known fact that 50% of organizations have gone through a redesign in the last two years and the other 50% will do so in the next two years. The level and scale of change in business is astronomical. Less than a quarter of organization redesign efforts are successful. I want to restate that because that is such an amazing fact. Less than one quarter of organization redesign efforts are successful. How do you know that it’s time to actually address your operating model and your organization design? The real key comes in not keeping or thinking small. Don’t think about small structural changes. You need to be thinking about how you operate from a strategic level. Consider that you would like to create an organization that remains viable and productive. You want to identify your organization’s strengths and opportunities, as well as link those to your long term business strategy, your accountability framework, and make sure that you engage the entire organization to collaborate on your future.
Sara Sheehan: [00:03:15] You might want to also take a hard look at the behavior changes that would be required in your organization for the change to be successful, for it to take root, and for people to actually operate in a new way, successfully embedding those behaviors in your culture. There are certain business situations that indicate a need for organization redesign. Some of them include a regional growth initiative. Completing a new merger or acquisition. Or even after outsourcing a major function. Sometimes it might be a situation where it’s a little bit less obvious that a redesign might be helpful. If your key decision makers in the company find that agreed upon ideas aren’t being translated into action fast enough, that’s a big indicator. An indicator of growth oriented needs might include things like sales are outpacing the delivery of your products, fulfillment needs process structure and resources to be successful. Supply chain strategies offer competitive pricing and cost containment advantages. And finally, outsourcing of functions or centralized shared services support efficient operations. Those are just a few of the things that could be going on in a growing business that might indicate you might want to take a look at how your organization is structured and how it works together across business units, regions, functions and the like. It’s really, really important to start by looking at what your current structure is. Document your ‘as is’ organization structure, and make sure that you have a sense of where your company currently stands, how your customers and the market at large perceive your organization, and whether the management style actually fits with those that engage your business.
Sara Sheehan: [00:06:10] You might also want to pay attention to major external factors in the world. Like changes in technology, market trends or new competition. They all make a difference in how you are performing. Everyone impacts each other in the marketplace, it’s a truly live and ever changing environment. By taking these factors into consideration, you’re going to be able to really take a close look at what your future organization design needs to be. When you are taking a look at your future state design, you’re going to want to take a close look at your organization’s capabilities. You’re going to want to identify is that a mature capability or are we actually novice in that skill area? It’s important to note that by region, function and business unit. That process is going to give you a clear picture of your organization’s strengths and weaknesses and help you identify areas for improvement. It’s also going to help you understand where the capabilities fit with your overall business strategy and if there are regulatory or compliance requirements that need to be considered. Once you’ve taken a look at your key capabilities, you can begin to assess the resources and infrastructure to support them. This may be where the focus turns to technology, people or process. It’s critical to take a look at the current state of these resources and identify gaps so that you can truly bring the desired state into reality.
Sara Sheehan: [00:08:38] Finally, capabilities can operate at the enterprise level or a local level. And it really depends on the situation. It’s important to understand the impact on the overall organization and how the design of the future state needs to take those eccentricities into account. If a capability is only required in an enterprise level, it may be centralized actually in the organization, and it may be a situation where the capability is only needed at a local level, may be truly decentralized. By considering all of this, your organization is going to be designed in an efficient, effective and adaptable way.
Sara Sheehan: [00:09:37] After you map out the capabilities, you’re going to want to take a close look at the business processes that support the organization. You’re going to want to determine if they need to be improved or made more efficient. And you’re going to want to take a close look at these improved processes because they’re going to reveal operating model and governance that will support business growth and success. Capabilities and the improved business processes may also reveal things like a new function, a new department, or a team that needs to be established to operate as a business scales. Taking a close look at business process improvement and the plan to get there will also give you insight into the time required to complete the process from start to finish, and the number of resources required to execute it. If this conversation about what goes into organization design is of interest to you, by all means, reach out to me. I have real expertise in this area and could help you redesign your organization. Check out the show notes for a link to meet with me so that you can learn more. Thanks so much and have a great day.
