Over the past few weeks, we have shown what effective organizational design is and can be. We have described the hard work and time commitments involved. We have also noted the rewards and significant positive contribution this process can provide to the business, when it is executed well. In this post, I will share how to implement a new organizational design successfully and subsequently navigate the transition.
Step 6: Implementing The Design Change and "Completing The Play"
Most business leaders are anxious to get to the implementation step of an organizational redesign project, often skimming over the other steps without giving them the proper time, focus, consideration and informed decision-making to ensure overall success of the project.
In my previous blogs, I stressed the importance and impact of following each step appropriately, regardless of the leaders’ need to get to implementation completed (now!).
In my experience, the execution of new organizational designs is often not done well. Many organization design efforts falter because the leadership team doesn’t “complete the play”. Instead, the team loses focus or become rushed at this critical point in the process.
The sports metaphor of the incompleted play is appropriate. Given all the practice and effort involved in getting to “game time” you want to make sure everyone is focused on executing the play right through to completion.
All of the rigorous thinking that went into the design criteria and the business case will be lost to the rest of the organization without effective change management. Intense and repeated communication is key, and it is advantageous to include everyone who participated in the design process. With major reorganizations you should plan on maintaining the project infrastructure for months with appropriate follow up.
What are the “right” implementation strategies? A 2010 study, “Taking Organizational Redesign from Plan to Practice” - McKinsey Global Survey Results, highlighted the top five implementation strategies that most accounted for successful versus less successful reorganizations. Here they are:
- Use reorganization as an opportunity to change mind-sets and behaviours of the workforce.
- Focus as much on how the new organizational model will work as on what it looks like.
- Accelerate pace of implementation to make the new model deliver value as soon as possible.
- Address all risks and bottlenecks as early as possible, before, during and after implementation.
- Launch new business initiatives as implementation is being completed.
What are the “right” implementation tools? The same McKinsey 2010 study outlined the top five implementation tools that accounted for the most success. Here they are:
- Develop a clear communication plan for all internal and external stakeholders and diligently adhere to it.
- Ensure that IT, Finance, Human Resources, and other systems are updated to support the new organizational model.
- Define detailed metrics for reorganization’s effect on short and long-term performance and assess progress against them.
- Follow a detailed plan which is split into work streams with specific milestones for delivery and make someone specifically accountable such as project team leader or department supervisor or division manager, for reaching each milestone.
- Create a formal process for staffing roles in the new organization, i.e. present as open job market or managed moves.
How do you create the Implementation Plan? HR often plays a lead role in drafting implementation plans in cooperation with the executive team to identify critical action items, sequence them logically, and set the right pace for leading the change. HR should also recognize when to recommend a project manager and project team to support large implementations. Creating a broader team can increase the project’s visibility and likelihood of success, while also ensuring that the burden does not fall solely on HR to deliver. In my experience, implementation is about discipline and hard work. HR can gain considerable credibility at this stage by demonstrating tenacity, paying very close attention to detail, and supporting the overall team mindset and team effort. Insisting on reasonable resource support is very important to overall success.
It is essential for a smooth transition that the right implementation approach is chosen and a project plan is created to stage the process and identify the major blocks of work. Sound project planning ensures that capabilities are incorporated into the plan in a logical way and that interdependencies are accounted for. The fundamental reason for the change influences the appropriate approach for staging the implementation and sequencing the tasks to be done. In some cases, and based on organizational need and business strategy, the implementation can be done gradually and in other cases, a quick “pull off the band-aid” approach may be warranted. For example, a fast realignment is the right approach when an external change has already occurred and the current organization design is actually hindering the organization from making the right strategy choices for the future.
Navigate the transition and help the management team stay the course. Each stage of the implementation process will have important tasks which need to be actively managed by the project team until such time as the executive team assumes full responsibility for the transition. Leadership’s commitment to seeing a business reorganization through is the defining factor that separates organization design changes that meet their objectives and those that fail. It is not unreasonable for a significant reorganization that requires the building of new capabilities to take a full year of work, involving a substantial amount of leadership time, attention and involvement.
Step 7: Measuring Results Using Metrics That Matter
There are some truisms common to business strategy and business planning: "measure what matters" and "what gets measured gets done". It is important to think about how you are measuring for success in that context. How do we know when we have done good organizational design work?
The following are some suggested metrics you can consider to determine your successes...and to also identify challenges or gaps where you will need to continue working to achieve the results you want to obtain.
- Leading indicators – progress against the design criteria
- Lagging indicators – financial
- Did the process help us make a better decision?
- How well have we met milestones and commitments?
Internal Working Relationships
- How well did we work with one another?
- How has the redesign impacted issues of employee engagement?
- What have the impacts been on employee morale, and key indicators like attrition, job satisfaction, and achievement of performance targets?
- What did we do well?
- What can we do better?
- How can we share what we have learned with our colleagues?
Some Final Tips: Communication and Transparency
Implementing effective organizational design is one of those areas of business planning where the bias should always be towards communication. Communicate, communicate, communicate! Engage with stakeholders. Listen more often than you speak. Strive to be as timely and transparent in the information flow as the situation and circumstances permit.
Some of the following tips may be helpful:
- Provide regular and frequent feedback to employees regarding change status throughout the design process....and especially during the first 90 days of implementation.
- Dispel any untrue rumours.
- Don't make any guarantees of future employment.
- Don't rush to judgment with plans for employee lay-offs or downsizing.
- Ensure that the organization is providing training and knowledge transfer to employees for any new equipment or processes.
- The smaller the organization the easier it is to implement a new structure. Ensuring it is the RIGHT structure that meets the business strategy is critical!
- Be flexible. Ensure you are able to continuously adapt to your internal and external environment.
In summary, remember that different business strategies require different organizational structures.
There is no one best way to organize a company. All choices made by the leadership team regarding the organizational design have costs and benefits. Leaders must choose solutions that address underlying causes. In short, alignment equals effectiveness.
Next month, I will share some thoughts on people programs which support the organizational model and business strategy.
Linda A. Barlow, CHRP
Global HR Thought Leader