Organizational Design & Restructuring

"Organization design" can be defined narrowly, as the process of reshaping organization structure and roles, or it can more effectively be defined as the alignment of structure, process, rewards, metrics and talent with the strategy of the business. HAFNER CONSULTANTS have made the case persuasively that attention to all of these organizational elements is necessary to create new capabilities to compete in a given market. This systemic view, is more likely to lead to better performance.

Organization design may involve strategic decisions, but is properly viewed as a path to effective strategy execution. The design process nearly always entails making trade-offs of one set of structural benefits against another. Many companies fall into the trap of making repeated changes in organization structure, with little benefit to the business. This often occurs because changes in structure are relatively easy to execute while creating the impression that something substantial is happening. This often leads to cynicism and confusion within the organization. More powerful change happens when there are clear design objectives driven by a new business strategy or forces in the market that require a different approach to organizing resources.

HAFNER CONSULTANTS defines and structure the organization design process in phases.

Phase one is the definition of a business case, including a clear picture of strategy and design objectives. This step is typically followed by "strategic grouping" decisions, which will define the fundamental architecture of the organization - essentially deciding which major roles will report at the top of the organization.

The classic options for strategic grouping are to organize by:

Each of the basic building block options for strategic grouping brings a set of benefits and drawbacks. Such generic pros and cons, however, are not the basis for choosing the best strategic grouping. An analysis must be done completed relative to a specific business strategy.

Subsequent phases of organization design include operational design of processes, roles, measures and reward systems, followed by staffing and other implementation tasks.