Working or Not – Validation of Organisational Design
How to validate organizational structures for a successful implementation
Companies constantly question their organization critically: Does it still meet the requirements resulting from changing conditions? Are we able to react quickly and individually to customer needs? Often smaller or larger reorganizations follow as an answer.
New structures, changed processes and responsibilities are then defined in close collaboration of team and stakeholders. In the planning phase, however, only a certain part of the future design process can be conducted; the far greater part is developed during the implementation phase itself. Nevertheless, the central pillars of the design should be critically questioned & validated before the start of the implementation.
How can an organizational design be validated?
We understand organizations as an interplay of formal and informal dimensions. These dimensions are considered individually but also as a whole when validating the organizational design.
Although every reorganization is an individual case, similar challenges occur again and again across organizations:
1. Setup
Interaction at Interfaces
First, a sketch of the organizational plan is created in the planning process: Which tasks are grouped together in organizational units? The challenge here is not so much the design of the units themselves as the sensible delimitation of tasks and the definition of interfaces between the units.
In our experience, structures, roles, and tasks within the individual areas are always planned in detail, but their integration and interaction with other areas is often neglected. Silos are therefore already created in the planning process. For this reason, interfaces should be identified and then challenged via use case testing together with the respective areas. Talking through concrete situations makes it possible to understand the cooperation, identify necessary adaptions and derive appropriate measures for adaptation.
2. Governance
Common understanding of decision-making processes
When it comes to governance, the first step is to create clarity about the relevant decision-making processes. Tools such as RACI, in which the respective competence and responsibility is defined in detail, help in this.
We often encounter situations in which unambiguous formulations – knowingly or unknowingly – are interpreted differently. To avoid that, joint discussions must ensure that all managers have a common understanding of the principles of the decision-making processes. Even if these discussions sometimes feel lengthy, they are worth the effort. They should not be confined to RACIs, but a feeling for informal decision making should also be developed. If there is a common understanding, quick and decisive action can be taken even in difficult situations.
3. Systems
Step-by-step development of new solutions
Existing platforms and databases should be integrated into the new organizational structure. It is not advisable to introduce lots of new systems and to throw existing ones overboard too eagerly. Typically, when setting up such new systems, the time and resources required are underestimated just as massively as the associated productivity gains are overestimated. Therefore, one should always first check how existing systems can also be used in the new structures and where other systems are urgently needed.
During the validation phase, dependencies between areas should be checked in any case, in order to know the corresponding effects in advance and to be able to react to them in the implementation. If new platforms and databases are introduced, there should be precise coordination (applying a sequenced process) during the implementation of the new organization so as not to overburden employees and managers.
4. Enablers
Consideration of informal organizational elements
In the end, organizations are human constructs: Their success depends largely on their employees and their collaboration. Therefore, for the successful implementation of a new organizational structure, the formal elements (setup, governance, systems) must interact with informal elements such as mindset, culture, and skills.
It is therefore important to consider carefully really is required for working together in the new organization. The subsequent comparison between requirements and actual state in the validation phase shows whether the necessary prerequisites have already been created. Identified gaps can then be closed with workshops, coaching and other culture-development formats. However, since these changes require time, a flexible approach should be used, which is constantly adapted during implementation.
The validation of organizational designs can identify inconsistencies in structures and processes in advance and raise awareness of the crucial points for implementation. However, since changes must be tested in practice and adapted based on feedback from the organization, validation does not replace a learning approach to implementation.
Finally, validation also ensures that employee confidence in the new organization is not weakened by avoidable course corrections. This creates the basis for a successful reorganisation.
