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Organization design isn’t the only driver of organizational effectiveness, but when it’s done well it can make a significant contribution to your organization. Is it time to review your organization? And how will you know if you’ve got it right? ® Getting into shape: How fit is your organization design?

Getting into shape - haygroup.com fit is your organization design… · Organization design isn’t the only driver of organizational e˜ectiveness, but when it’s done well it can

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Page 1: Getting into shape - haygroup.com fit is your organization design… · Organization design isn’t the only driver of organizational e˜ectiveness, but when it’s done well it can

Organization design isn’t the only driver of organizational e�ectiveness, but when it’s done well it can make a signi�cant contribution to your organization.

Is it time to review your organization? And how will you know if you’ve got it right?

® ®

Hay Group is a global management consulting �rm that works withleaders to transform strategy into reality. We develop talent, organizepeople to be more e�ective and motive them to perform at their best. Our focus is on making change happen and helping people andorganizations realize their potential.

We have over 2600 employees working in 84 o�ces in 48 countries.Our clients are from the private, public and not-for-pro�t sectors, acrossevery major industry. For more information please contact your localo�ce through www.haygroup.com/ca.

Getting into shape:How �t is your

organization design?

Canadian Head O�ceSuite 700121 King Street WestToronto, ONM5H 3X7t +1.416.868.1371f +1.416.868.6871

CalgarySuite 1515734 - 7th Avenue SWCalgary, ABT2P 3P8t +1.403.215.6730f +1.403.215.6749

EdmontonSuite 115010180 - 101 StreetEdmonton, ABT5J 3S4t +1.780.415.8021f +1.780.423.3893

Halifax50 Tower View DriveValley, NSB6L 4L7t +1.902.491.4289f +1.902.895.7862

MontrealSuite 16102000 Mans�eld StreetMontreal, QCH3A 3A4t +1.514.866.7831f +1.514.866.8908

OttawaSuite 120081 Metcalfe StreetOttawa, ONK1P 6K7t +1.613.238.4785f +1.613.238.3405

ReginaSuite 3001914 Hamilton StreetRegina, SKS4P 3N6t +1.306.359.0181f +1.306.352.2488

VancouverSuite 13901140 West Pender StreetVancouver, BCV6E 4G1t +1.604.682.4269f +1.604.682.4405

Hay Group Limitedwww.haygroup.com/ca

Page 2: Getting into shape - haygroup.com fit is your organization design… · Organization design isn’t the only driver of organizational e˜ectiveness, but when it’s done well it can

www.haygroup.com/caGetting into shape: How �t is your organization design?

Organization design isn’t the only driver of organizational e�ectiveness, but when it’s done well it can make a signi�cant contribution to ensure that:n Goals, roles and strategy are clear: everyone understands what the organization needs to do and their part in it

n Accountabilities are sorted: no gaps, no overlaps, and lots of cultural commitment to being accountable

n Rules, systems and processes are clear: everyone follows the same set of formal and informal (cultural) rules

n The right level of control is in place: decisions get made by the right people, with the right level of control – not too much, not too little

n People are engaged and enabled: the climate is e�ective, authority matches responsibility, and the factors that drive value and commitment are in place

There’s no one right answer when it comes to organization design. It’s about making the right tradeo�s at the “big picture” level to optimize for your strategy and context, and then implementing well at the detailed level of processes, roles and reporting – which means both good decisions and careful implementation and engagement.

Is it time to review your organization? And how will you know if you’ve got it right?

First – from a high-level perspective:It is important to understand that good organization design is not about optimizing through in�nite complexity. Clarity is so important that it is worth trading o� some elements that might seem “ideal” to have an organization that is simple. The key is to know what those trade-o�s are and work to minimize the downsides. One simple test for a clear and streamlined organization is the whiteboard test.

n Can you draw a high-level diagram of the organization on a whiteboard in under a minute?

n Can you describe in just one or two sentences how the organization is designed to deliver its strategy and serve customers and stakeholders?

If you answered no to either of these questions, you need to consider whether the complexity of the organization is getting in the way of absolute clarity and a focus on work that connects to the strategy and drives value.

Next – at a more detailed operating level:If you survive the whiteboard test the questions in the checklist that follows will give you a good sense of whether you are on the right track ata more detailed operating level. For your organization, some will be of higher priority than others – and you may also have specific drivers that you need to consider and respond to.

There’s no simple thermometer or yardstick that can tell you if your organization is “in shape” – but there are indicators.

Checklist: How �t is your organization design? Yes NoStrategy and alignmentDo customers and stakeholders understand how to connect with the people and processes of the organization?Is delivery to customers smooth and e�cient?Does everyone in the organization understand how they create value for the organizations’ shareholders or stakeholders?Are individual goals and accountabilities clear and embraced by job holders?Has the organization been mindfully designed based on the strategy, or is it an evolution or patchwork?Are teams and roles de�ned based on the strategy, rather than evolving around individuals?Is the current culture aligned to the desired culture that would support the strategy and values of the organization?Are innovation, collaboration and cross-pollination supported between divisions or groups?Is there a collective understanding of and responsiveness to the needs of customers and stakeholders?Can the organization adapt and respond to the external environment and to change?Is the value-add of each management role or layer clear?

Operational e�ciencyAre important processes and ownership mapped so that there are no gaps or overlaps in accountabilities? Are rules, systems, policies and processes clear?Are meetings focused and e�cient?Does the level of centralization strike a balance between unique needs and economies of scale?Are business processes such as budgeting, �nancial reporting and analysis, objective setting, performance management and reward streamlined, e�cient and e�ective?Are back o�ce/ support groups reasonable in size relative to the operations of the organization?Does expertise get shared across divisions or groups, and organizational knowledge retained?Are the organization’s �nancial and human resources managed with ease and �exibility?Is the organization absent of “silos” and “empires”?Are roles de�ned in terms of accountabilities and results (outputs) rather than duties (inputs)?

Talent management and enablementIs the culture clear and consistent, so that there is a sense that everyone is playing by the same rules?Do decisions get made e�ciently, with the right people involved?Do employees report that they are both engaged and enabled to deliver?Are you able to grow people internally for key management and senior professional roles?Do employees report that they receive the leadership, mentorship and support they require?Do leaders report that they have the time to lead and mentor within their teams?Is complexity or confusion around job descriptions or accountabilities rare and quickly addressed?Are job portfolios appropriate and balanced, creating meaningful jobs that are realistic?When individuals are placed in roles, is consideration given to both the technical skills and knowledge and the behavioural competencies required?Would employees, customers and stakeholders describe the organization as “fair”?Do employees have a sense of in�uence and voice in the organization?

Interpreting the results:Likely there would be a few No answers for any organization, as few are perfect. Given the financial and human impact of making significant organizational change, few would suggest that a No answer here and there should spur radical change. Instead, we see a small number of No answers as opportunity to make tangible improvements in cost structures, engagement and results.

However, if many of the answers are negative – especially in high priority or strategic items – consider the costs and risks created for your organization, and the potential improvements that could be made. An organizational review would allow you to assess costs and risks and compare the challenges and benefits of change.

Page 3: Getting into shape - haygroup.com fit is your organization design… · Organization design isn’t the only driver of organizational e˜ectiveness, but when it’s done well it can

www.haygroup.com/caGetting into shape: How �t is your organization design?

Organization design isn’t the only driver of organizational e�ectiveness, but when it’s done well it can make a signi�cant contribution to ensure that:n Goals, roles and strategy are clear: everyone understands what the organization needs to do and their part in it

n Accountabilities are sorted: no gaps, no overlaps, and lots of cultural commitment to being accountable

n Rules, systems and processes are clear: everyone follows the same set of formal and informal (cultural) rules

n The right level of control is in place: decisions get made by the right people, with the right level of control – not too much, not too little

n People are engaged and enabled: the climate is e�ective, authority matches responsibility, and the factors that drive value and commitment are in place

There’s no one right answer when it comes to organization design. It’s about making the right tradeo�s at the “big picture” level to optimize for your strategy and context, and then implementing well at the detailed level of processes, roles and reporting – which means both good decisions and careful implementation and engagement.

Is it time to review your organization? And how will you know if you’ve got it right?

First – from a high-level perspective:It is important to understand that good organization design is not about optimizing through in�nite complexity. Clarity is so important that it is worth trading o� some elements that might seem “ideal” to have an organization that is simple. The key is to know what those trade-o�s are and work to minimize the downsides. One simple test for a clear and streamlined organization is the whiteboard test.

n Can you draw a high-level diagram of the organization on a whiteboard in under a minute?

n Can you describe in just one or two sentences how the organization is designed to deliver its strategy and serve customers and stakeholders?

If you answered no to either of these questions, you need to consider whether the complexity of the organization is getting in the way of absolute clarity and a focus on work that connects to the strategy and drives value.

Next – at a more detailed operating level:If you survive the whiteboard test the questions in the checklist that follows will give you a good sense of whether you are on the right track ata more detailed operating level. For your organization, some will be of higher priority than others – and you may also have specific drivers that you need to consider and respond to.

There’s no simple thermometer or yardstick that can tell you if your organization is “in shape” – but there are indicators.

Checklist: How �t is your organization design? Yes NoStrategy and alignmentDo customers and stakeholders understand how to connect with the people and processes of the organization?Is delivery to customers smooth and e�cient?Does everyone in the organization understand how they create value for the organizations’ shareholders or stakeholders?Are individual goals and accountabilities clear and embraced by job holders?Has the organization been mindfully designed based on the strategy, or is it an evolution or patchwork?Are teams and roles de�ned based on the strategy, rather than evolving around individuals?Is the current culture aligned to the desired culture that would support the strategy and values of the organization?Are innovation, collaboration and cross-pollination supported between divisions or groups?Is there a collective understanding of and responsiveness to the needs of customers and stakeholders?Can the organization adapt and respond to the external environment and to change?Is the value-add of each management role or layer clear?

Operational e�ciencyAre important processes and ownership mapped so that there are no gaps or overlaps in accountabilities? Are rules, systems, policies and processes clear?Are meetings focused and e�cient?Does the level of centralization strike a balance between unique needs and economies of scale?Are business processes such as budgeting, �nancial reporting and analysis, objective setting, performance management and reward streamlined, e�cient and e�ective?Are back o�ce/ support groups reasonable in size relative to the operations of the organization?Does expertise get shared across divisions or groups, and organizational knowledge retained?Are the organization’s �nancial and human resources managed with ease and �exibility?Is the organization absent of “silos” and “empires”?Are roles de�ned in terms of accountabilities and results (outputs) rather than duties (inputs)?

Talent management and enablementIs the culture clear and consistent, so that there is a sense that everyone is playing by the same rules?Do decisions get made e�ciently, with the right people involved?Do employees report that they are both engaged and enabled to deliver?Are you able to grow people internally for key management and senior professional roles?Do employees report that they receive the leadership, mentorship and support they require?Do leaders report that they have the time to lead and mentor within their teams?Is complexity or confusion around job descriptions or accountabilities rare and quickly addressed?Are job portfolios appropriate and balanced, creating meaningful jobs that are realistic?When individuals are placed in roles, is consideration given to both the technical skills and knowledge and the behavioural competencies required?Would employees, customers and stakeholders describe the organization as “fair”?Do employees have a sense of in�uence and voice in the organization?

Interpreting the results:Likely there would be a few No answers for any organization, as few are perfect. Given the financial and human impact of making significant organizational change, few would suggest that a No answer here and there should spur radical change. Instead, we see a small number of No answers as opportunity to make tangible improvements in cost structures, engagement and results.

However, if many of the answers are negative – especially in high priority or strategic items – consider the costs and risks created for your organization, and the potential improvements that could be made. An organizational review would allow you to assess costs and risks and compare the challenges and benefits of change.

Page 4: Getting into shape - haygroup.com fit is your organization design… · Organization design isn’t the only driver of organizational e˜ectiveness, but when it’s done well it can

Organization design isn’t the only driver of organizational e�ectiveness, but when it’s done well it can make a signi�cant contribution to your organization.

Is it time to review your organization? And how will you know if you’ve got it right?

® ®

Hay Group is a global management consulting �rm that works withleaders to transform strategy into reality. We develop talent, organizepeople to be more e�ective and motive them to perform at their best. Our focus is on making change happen and helping people andorganizations realize their potential.

We have over 2600 employees working in 84 o�ces in 48 countries.Our clients are from the private, public and not-for-pro�t sectors, acrossevery major industry. For more information please contact your localo�ce through www.haygroup.com/ca.

Getting into shape:How �t is your

organization design?

Canadian Head O�ceSuite 700121 King Street WestToronto, ONM5H 3X7t +1.416.868.1371f +1.416.868.6871

CalgarySuite 1515734 - 7th Avenue SWCalgary, ABT2P 3P8t +1.403.215.6730f +1.403.215.6749

EdmontonSuite 115010180 - 101 StreetEdmonton, ABT5J 3S4t +1.780.415.8021f +1.780.423.3893

Halifax50 Tower View DriveValley, NSB6L 4L7t +1.902.491.4289f +1.902.895.7862

MontrealSuite 16102000 Mans�eld StreetMontreal, QCH3A 3A4t +1.514.866.7831f +1.514.866.8908

OttawaSuite 120081 Metcalfe StreetOttawa, ONK1P 6K7t +1.613.238.4785f +1.613.238.3405

ReginaSuite 3001914 Hamilton StreetRegina, SKS4P 3N6t +1.306.359.0181f +1.306.352.2488

VancouverSuite 13901140 West Pender StreetVancouver, BCV6E 4G1t +1.604.682.4269f +1.604.682.4405

Hay Group Limitedwww.haygroup.com/ca