Don’t restructure: Reconfigure and improve your organisation's performance
As a consultant, I often get asked to review an organisation's structure. The structure is seldom the reason that an organisation or department is not performing. It follows that, on its own, restructuring is rarely a solution to the problem. In many organisations, continuing rounds of restructuring to improve efficiencies also results in change 'fatigue' and there is a limit to the benefits that can be realised over time.
What is often required, and what can result in significantly improved performance, is totally reconfiguring the organisation or department. Reconfiguration is a holistic approach to organisational design in which all aspects of the organisation are reviewed and aligned to the strategy.
A holistic approach
The focus of an organisation is obviously the strategy, which, for example, defines its purpose, markets, products and services and geographical footprint. If there is a significant shift in strategy, you will probably need to reconfigure your organisation.
One of the main things that can contribute to increased efficiencies are the organisation's processes. Process re-engineering in organisations is common and can result in reducing unnecessary work and improving productivity. The problem with process re-engineering on its own, is that it is often done in isolation and aims at improving an existing organisational architecture, when a complete review of the nature of work may be more effective.
Too often, process re-engineering only looks at business processes rather than including management processes in the review. Meetings and reporting are just two management processes that can be streamlined and contribute greatly to making organisational performance more effective.
Process reviews are often associated with new technology and it is true that in reviewing the organisation's configuration, technology is important. Technology again needs to be looked at holistically to establish a technology architecture that extends well beyond business process technology, such as SAP. Opportunities for the use of technology to improve connectivity can result in people working smarter. It goes without saying that technology should be integrated to avoid incompatible systems.
In reconfiguring organisations, there is a recurring relationship between process redesign and restructuring. Structure, at a high level, is about role clarity. It is not a purely linear, rational process. This means that the role of a CEO or COO will be determined largely by what is required by the strategy and challenges facing the organisation at a point in time.
The purpose of creating structures is to establish roles and ensure that the necessary work is done at the right levels. Where you make a lot of decisions in jobs, is not advisable to over define the tasks. What is required is clarification of outputs. In many cases, higher-level jobs may be profitably designed around people to leverage strengths and passion rather than trying to fit people into predetermined 'boxes'.
Whatever the structure, the success of the organisation depends on people. No matter how good the processes and structures are, if the people do not have the skills and attributes to meet the requirements of a role, they will not be effective.
Too often, organisations are restructured because they are not performing. However, the same people are just redeployed to different roles. This means restructuring without reviewing the people in the organisation is relatively futile.
One of the outputs of restructuring is determining roles and people profiles. When an organisation is being reconfigured, it is often useful to use a clean slate to fill the new structure. Rather than try to retrofit people into a structure. It is often better to lay out the new roles and, based on the people profiles required, objectively select who is most suitable for each role. Where existing people do not meet the requirements, alternative deployment opportunities must be sought. Where subsequent vacancies occur, these should be filled from other sources.
This is obviously the most sensitive part of reconfiguring an organisation and needs to be managed with great care and respect for individuals. It is an emotional period that needs to be completed as quickly as possible to reduce uncertainty. It needs considerable leadership energy and resilience to achieve.
Finally, and most challenging, is the leadership and organisational culture that needs to be shaped to be consistent with the strategy, processes, structure, etc. This is not something that can be done overnight and requires a lot of visible leadership. However, it is one of the most important factors influencing the performance of an organisation.
