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Three Rules for Every Organizational Redesign

By Jennifer Sigler | September 10, 2021 | 0 Comments

Marketing Organization and Talent

It may surprise some people to hear me say that there are rules that apply to every organizational redesign. After all, I did just boldly declare that you should never benchmark your org structure, because “your organization is a snowflake”. [1]

But both these things are true. Your structure never will (and never should) look just like anybody else’s. And at the same time, there are best practices in org design that apply across the board. Here are my top three:

Rule #1: Ensure you actually need a new org design

At Gartner, we’ve found that organizational redesigns typically occur for one of three reasons:

  1. The C-suite requires it (because of costs, M&A activity, etc.)
  2. One or more stubborn problems need resolution (like inefficiency, lack of flexibility, etc.)
  3. A new goal can’t be achieved with the current structure (like digital transformation, breaking into a new market, etc.)

When you dig into these, though, you often discover that costs could be cut another way, the inefficiency isn’t rooted in the structure at all, and the new market entry could be achieved with less extreme adjustments. So in cases like these, why do people assume they need a new structure?

In my daily conversations with Communications and Marketing leaders about org design, I’ve begun to think that business leaders have somehow come to automatically link big, complicated, overwhelming challenges with structure, because structure is itself big, complicated, and overwhelming. By this logic, if you have such a problem or goal, the solution couldn’t possibly be as simple as a service level agreement, or more clear and transparent communication from leadership, or just giving your team some training… right?

Well… yeah, sometimes it is.

Of course, there are also those leaders who want to restructure just to leave their mark on the organization. [2] Obviously don’t be that guy.

 

Dr. Evil meme saying, "If I blow up the org chart, my legacy will endure forever."

Rule #2: Clearly articulate your vision

I once heard a legend in which Robin Hood was walking through the forest and noticed a bunch of arrows perfectly landed in the center of targets drawn on trees. He wanted to recruit this archer, so he followed the targets until he found a small boy with a quiver on his back and a bow in his hand. He asked the boy if he knew the archer who’d shot all these bullseyes. The boy said, “I’m the archer, sir.” Robin Hood asked the boy how he’d developed such amazing accuracy. To which the boy replied, “Easy, sir. First I shoot the arrow, then I draw the target around it!”

We don’t do cute strategies in business. We do solid ones. And a solid strategy for an organizational redesign involves defining a very clear vision of desired outcomes up front. It’s not enough to say, “We need to close silos” or “We need better collaboration”. Those are just re-statements of the problem.

Instead, clearly articulate your “PGPR”:

Purpose: Why are you restructuring?

Goals: What objectives should a new structure achieve?

Priorities: In the event of tensions or necessary trade-offs between goals, which goals should take priority?

Requirements: What criteria must any new structure design meet (because of budgets, C-suite directives, HR/legal constraints, etc.)?

PGPR defines success. It tells you whether you’ve hit the target or not. Without it, you’re just shooting at random, which will get you random results.

Cartoon of man drawing target around an arrow, with big red "No" over it.

Rule #3: Let the people who do the work design the new structure

Gartner’s HR research team has uncovered some pretty impressive facts about who makes org redesign decisions:

Including non-manager employees in redesign decisions more than doubles the likelihood of restructure success — the greatest impact of any employee group. Yet non-manager employees are the least likely to be consulted about a restructure. [3]

Surely, if business leaders knew this, they would involve non-manager employees more in making redesign decisions, right? Ahh, it’s not so simple:

Sixty-eight percent of leaders overseeing redesigns tell us that they involved frontline employees in making or providing input into redesign decisions. By contrast, only 11% of employees agree. [4]

You see, business leaders think they are including non-manager employees in redesign decision-making. Employees see it differently.

Asking for employee feedback about your redesign plan is better than simply announcing it to them. But even asking for feedback doesn’t go far enough to get you the >2x boost in restructure success. To get that, you’ll need to let go control and allow the people who do the work to redesign how the work gets done. After all, who knows better than them what will actually work? Not you, for sure.

Correction guy meme saying, "Leadership team designing a new structure? You're doing it wrong."

Did you catch the commonality?

All of these rules apply to the process of redesigning your organization, not to the new structure itself. And that’s the real takeaway here: Your org design is a snowflake, but the process you follow to change it is not. Everyone considering a restructure should carefully assess that a restructure is actually necessary, clearly articulate their vision for a new structure, and involve the people who do the work in the design of that new structure. Over 80% of reorgs fail in some way [2]. If you do these things, the chance of your restructure succeeding will rise dramatically.

References

[1] Lesson Video: “Benchmarking” Your Org Structure Is a Bad Idea”

[2] Getting Reorgs Right (HBR)

[3] Five Steps to Restructure Marketing—And Keep Your Sanity

[4] 3 Questions You Must Answer Before You Restructure for Hybrid

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