Building agility and adaptability

Mercer’s organisation design consulting helps you transition from a traditional multilayered organisation to a simple, agile and distributed structure.
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Business goals need to be supported by the right operating models

Organisations must make complex decisions as they mobilise 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 organisations may face include:

  • Enabling growth, faster decision-making, innovation and greater agility
  • Organising work in the post-COVID world
  • Becoming truly customer-focused
  • Aligning workforce transformation to organisational 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 realise their business strategy, leaders must rethink how their organisation functions and design operating models for sustainable outcomes.

Organisations 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 organisations

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

High-performing, agile organisations:

  • 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 organisation design

To help organisations frame their decision making, we propose five dimensions of organisational design. Each dimension represents a spectrum of choices leaders must make, and any choice has broader organisational implications.
The graphic lists five dimensions of organisation design. Under each dimension sits a spectrum of options labelled at each end with corresponding characteristics. The first dimension of organisation 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 organisationally. 

Organisation design options

There’s no one-size-fits-all approach to creating an agile organisation; there are several ways to inject agility. Some methods will be more suitable than others for different areas of your organisation, with ease of implementation decreasing and the level of agility increasing as you move along the continuum. A few of the options that Mercer recommends include:

People work primarily in line organisation but also contribute to cross-functional initiatives or projects (for example, an 80/20 split).

Self-organised (not self-directed) teams define their ways of working and are jointly accountable for employee-to-employee performance.

Sharing and sourcing capability across platforms or defined ecosystems (managing access rather than ownership of resources).

A pool of individuals staffed to different activities full time, based on the priority of needs — assignments can vary from hours to months.

Coordination between product owners and chapter leads to determine priority and vision; outcomes achieved through cross-functional teams (organised, for example, in squads and tribes).
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