Re-organization is a healthy way of organizational renewal, but only when done with proper planning and execution
Re-organization efforts can be messy and complex. LAM approach focuses on a decision perspective that helps ensure the organizational changes will have the desired effect: better performance.
Chief executives often believe that changing the structure of their organizations will produce better performance. But a study of more than 50 reorganizations found that most had no significant effect on performance.
There’s a reason for this disconnect. The chief determinant of an organization’s performance is its ability to make and execute its key decisions. Most reorganizations–implemented without consideration of those decisions–don’t change what needs to be changed. And many organizational issues can be resolved by diagnosing and fixing decision difficulties, without the trouble and expense of a reorganization.
But sometimes structure really does impede good decision making and execution, and a reorganization is necessary. The key then is to launch a decision-driven reorganization.
The future organization is...
What do we do
- Identify your organization’s key decisions. These will include major strategic decisions made in the boardroom and some of the everyday operating decisions made on or near the frontline.
- Flat Organizational Design. The flat organizational design allows your organization to have a virtual hierarchy that helps create new levels of communication within the organization. Flat organizational design is the way to innovation. Think of Google, Apple, Twitter like organisations. What makes them so innovative is their flat organizational design.
- Determine where in the organization those decisions need to be made. Some decisions are easy to place–major capital investments, for instance, usually belong with the corporate center–but some require an assessment of trade-offs.
- Structure the company around its sources of value. If different customer segments require different kinds of decisions, for example, you may want to structure the company around those segments.
- Empowerment (level of authority your decision makers need), and give it to them–regardless of their organizational status.
- Adjust other parts of your organizational system as necessary. A change in structure may require changes in decision roles, incentives and the like.
- Equip leaders to make decisions quickly and well. Smart companies ensure that people have the skills required to make and execute good decisions.
Does your organization have a structure thats puts a lot of barriers for new ideas and innovation?