Organization design

Business goals need to be supported by the right operating models

Organizations must make complex decisions as they mobilize to achieve their business goals. Faced with competing priorities, limited resources and unsuitable operating models, many fail to reach their objectives.

The opportunities, challenges and barriers organizations may face include:

Enabling growth, faster decision-making, innovation and greater agility
Organizing work in the post-COVID world
Becoming truly customer-focused
Aligning workforce transformation to organizational structures
Making their strategy work

Under increasing internal and external pressures, there may be a temptation to implement reactionary initiatives that might look good in the short term but do not deliver lasting impact. To overcome challenges and realize their business strategy, leaders must rethink how their organization functions and design operating models for sustainable outcomes.

Organizations can achieve their business objectives by getting the fundamentals right, beginning with holistically (re)designing business models, structures, processes, capabilities, governance, ways of working, metrics, incentives, funding and resourcing.

Greater adaptability delivers clear business benefits. Responsive companies’ revenues grow 37% faster and generate 30% higher profits than non-responsive companies.

The pillars of agile organizations

To thrive in times of transformation, organizations must continuously assess and align their business and organization models, people practices and culture. High-performing organizations consistently ensure alignment of these aspects to sustain success and deliver on their business strategies.

High-performing, agile organizations:

Embrace an aspirational purpose and clearly communicate their strategy
Monitor the environment and respond quickly
Know how they create, capture and deliver value
Test, learn and iterate
Have the ability and capacity to change and reconfigure their resource base quickly

Continuum of choices in organization design

To help organizations frame their decision making, we propose five dimensions of organizational design. Each dimension represents a spectrum of choices leaders must make, and any choice has broader organizational implications.

The graphic lists five dimensions of organization design. Under each dimension sits a spectrum of options labelled at each end with corresponding characteristics. The first dimension of organization design, stakeholder engagement, ranges from focused to complex. The second dimension, breadth of focus and scope, ranges from narrow to broad. Structure and governance ranges from locally embedded to centrally managed. Resource management ranges from stable to fluid. The fifth dimension, metrics, incentives and funding, ranges from role/project based to embedded organizationally.