Contexts for organisation design

• Reduce costs and headcount by e.g. eliminating duplication, reducing the number of organisational units.
• Increase effectiveness by e.g. increasing clarity of responsibility and accountability, reducing hand-offs.
• Improve customer focus by designing from the outside in.
• As a consequence of merger or of creating a new organisation from scratch.
• As a consequence of other organisational or process changes.

Typical stages in the process

• Understand the drivers which have initiated the design effort.
  
• Understand the current organisation. Functional analysis (see downloads) is often a useful tool for this.
  
• Analyse the external demands on the organisation, especially unmet or future ones.
  
• Develop a future vision and design criteria.
  
• Develop design options.
  
• Evaluate, refine and select a preferred option.
  
• Conduct an impact analysis (if not part of the evaluation) to inform implementation planning.
  
• Implement.

Levels of design

Design can take place at any of five levels:

• Job.
• Team.
  
• Business process.
  
• Business unit organisation structure.
  
• Overall organisation structure.

The key insight is that although you might start at any of these levels, according to what is driving the work, they are highly interdependent and need to be aligned. So, often you end up having to address them all.

The diagram highlights the interrelationships.

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