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

Difficulties that consultants experience with implementation may be due to budget restrictions or it may be that clients prefer to use internal resources in this phase. It may also be due to a lack of appreciation for the importance of change management interventions:

Often clients have spent all the money on design and never budget for implementation and even less so for embedding, and so often the benefits of the design are not realized. Organizations seem to run out of steam. They don't realize how important it is to have someone drive the implementation in such a manner as to take it from a paper exercise to workable reality

Clients are keen to design with us, but less enthusiastic about partnering in implementation because ‘that's what HR does'. This usually results in […] disregard for the elements that make an organization [re-design] successful - KPIs, performance management, culture and behavior change

There are several reasons why evaluation may be a challenge. It may be a practical limitation: Consulting projects are by their very nature of limited duration. As mentioned, implementation may take many months and even years, and the consultants who supported managers in developing the model are not around to observe the effects:

Evaluating the model's impact down the road is usually left in the hands of the [client] organization

Determining whether or not the design has been successful can be difficult (especially in quantitative terms). The implementation work, if done correctly, takes a lot of time […]

There may also be political reasons for avoiding evaluation. Once a decision has been made, the decision maker may not welcome negative news about the limitations of the chosen model. Another possibility is more psychological, as described by one respondent:

Usually, once "implemented," the energy goes down for evaluating. It's "back to the grind," and the grind is harder now because of the learning curve. Only painful problems tend to gain enough energy to bring corrective adaptations, so positive opportunities are harder to capture

To the extent that the new organization model is evaluated at all, it seems like firms typically focus on the financial benefits (e.g., headcount reductions) and leave out other potential benefits:

In regards to measuring if the new model achieves its intended effect, most of this work is financially driven. There seems to be little appetite to look at "softer" people measures, such as employee engagement, turnover, sick days, etc.

We also consider the other items in this section - operationalization (Q21), staffing of new roles (Q22), and infrastructure (Q23) - to be of high importance in terms of implementing a new model and realizing the benefits. The fact that they were evaluated as only moderately challenging may reflect the fact that consultants have developed skills in these areas and have appropriate tools and techniques for the job.