Tuesday, April 20, 2021

Organizational Structure Design Maturity

Forward-looking organizations experiment with different types of organizational structure design to enforce business alignment, enablement, communication, collaboration, and harmony.

The organizational structure carries inherent business capabilities as to what can be achieved within its frame. The pyramidal structured organization brings up a certain level of efficiency, but an overly rigid hierarchy becomes the very obstacle to stop the digital flow. Misaligned structures or disconnect functions reinforce a non-innovation friendly climate and stifle business changes. With increasing changes, horizons and speed are crucial for business success today. Organization development is to help organizations get better by providing an environment within which employees at all levels are inspired and allowed to commit their best in the organization's long term success.

The diagnostic shortcoming is where most organizational structure development processes get off to a poor start:
Traditional organizations are often silo-based and strictly hierarchical. In many companies that get stuck at the low level of business maturity, take an accurate diagnosis of the organization's current state, identify any barriers to excellence that may exist, then develop strategies for lowering or removing those barriers. Thus, organizational design and development could regain some of the reputation it once had if we focused more on the root causes that employees are not engaged fully and not spend so much time chasing and trying to treat the symptoms.

The main reason corporations need to create new structure schemes and organizational designs is because business goals are not being met with current design and structure. To break down silos and overcome bureaucracy, a limited hierarchy works best in a creative environment where the free flow of ideas and their prompt implementation is a key element of business success. The digital organizational structure design should delayer the unnecessary business hierarchy to enable digital flow, encourage cross functional communication and collaboration, as well as inspire “digital holism.”

Identify the potential gains from organizational design efforts: Change is never for its own sake, but for achieving business benefit. Very few managers understand all the gains they will enjoy from such initiatives in their organizations. Gains like profitability, agility, new learning, sales growth and market domination for starters. Gains in culture change for improving adaptability and responsiveness. Gain in innovation rate and employee retention for a second level of gains.

Digital organizations need to continually fine-tune a successful structure, create a business context where people can collaborate, they are empowered and encouraged to develop their creative capacity to solve problems and explore opportunities in innovative ways. Rather than ignoring employees' growth potential or pointing out their areas of weakness, encourage career rotation, offer proper training and encouragement, catch them doing something right. A little goes a long way. The behavior change comes first; right at the top-reward the team and not individuals.

Organizational design is the structure, and sometimes the strategies themselves - that facilitate the people-centric priority:
The realizers of strategy must appreciate that this is our world with the mixed package of old and new, physical and virtual, and unknowns are commonplace. From the organizational structure design perspective, the challenge will continue to be: 'How to achieve a balance between virtual worlds and the human connection. Many classic organizations and managers can be presence based when 'newer' employees increase their engagement; when they feel trusted to get the job done; when and where they think is most opportune.

In today’s hybrid businesses, the physical organizational structure, relationships, and virtual platforms and social connections wrap around each other to ensure clear responsibility, smooth information flow, seamless alignment, and engaged workforces to accelerate changes A hybrid nature of organization well mixes the virtual social platform with the physical functional structure, and the official structure and unofficial structure co-exist antagonistically or harmoniously, to enforce cross-functional collaboration and dot-connecting innovation.

The organizations that have high-mature alignment outperform their competitors and tend to be highly responsive to changes and good at innovation. Forward-looking organizations experiment with different types of organizational structure design to enforce business alignment, enablement, communication, collaboration, and harmony, fine-tune the business structure and systems to ensure both system effectiveness and efficiency in order to achieve high level organizational maturity.

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