Organization Design Challenges

Read this article for a practical look at the challenges consultants hired to redesign an organization face. The consultants did not focus on what model they should choose but more on the process or phases of the major steps in the redesign. Any company that wants to redesign its organization will face the same challenges and decision-making points. Thus, it will help to consider how the redesign is undertaken. The first step is to analyze where the organization is currently and then consider whether a new organizational model is needed or if the current one needs to be adjusted.

Key findings

Interpretation

The tendency to "protect one's own turf" reminds us that organizational redesign is - or may deteriorate into - a political process. One consequence is that participants may spend more time and energy on protecting their own status or their unit's current position, rather than considering viable options from the organization's point of view. As one respondent remarked:

It is at this stage that territorial protection and internal politics start to come into play. People tend to think in terms of losses rather than gains

The comments also suggest that there may be emotional factors, combined with cognitive biases, that influence how participants reason and act during the redesign process. As in other types of organizational change, one may observe that participants suffer from "loss aversion" and have trouble envisioning an alternative reality:

The biggest issue is a misunderstanding of what design criteria are and what good criteria look like. Clients are often too wedded to "what is" rather than "what could/should be"

This is clearly an impediment to the design process. Paul Tolchinsky, a well-respected practitioner in the field, put it in the following way: "You cannot design what you cannot imagine".

As for other types of strategic decisions, one will generally achieve better results by carefully considering multiple options before making a choice with regard to the new organizational model. However, the tendency noted by the respondents is to proceed rather quickly in this phase:

Often times leaders do not want to give the time to exploring conceptual options…they want to get on with it, there are budget pressures to get it done

The difficulty of creating understanding and acceptance among employees for the design choices probably reflect the fact that new organizational models are often developed by project teams. Even though a large number of people may potentially be asked to provide input to the project (e.g., by participating in interviews or workshops), it does not necessarily follow that they all will understand the rationale behind the model that is finally chosen.

The development of explicit design criteria is often recommended as a key step in creating a systematic and transparent decision process, and one that maximizes the chance of selecting a model that addresses the key challenges facing the organization. All of the stakeholders may potentially participate in the identification of design criteria, which are subsequently the basis for evaluating alternative options (and potentially also for communicating the rationale behind the decision). The respondents evaluated this task as moderately challenging (more than 4 out of 10 indicated that it was often or always a challenge). At the same time, it seems like it requires particular skills to manage this aspect of the process. In the words of one respondent:

Identification of design criteria seems simple to stakeholders because they don't have a concept of the new organization and associated trade-offs yet. When design options are presented, stakeholders begin to understand the implications of criteria. Typically, they will attempt to redo criteria in order to meet an expected design outcome. Practitioners require courage and candor to help stakeholders understand how tweaks in the design will compromise the original design criteria.