What leaders should focus on after designing a new organizational structure
Restructuring is usually triggered by financial difficulties, restructuring or ‘rightsizing’ is done to limit harm and enhance the overall health of the business. The process is turbulent for an organization, and the data shows that they’re not always successful. More than 80% fail to deliver the value they are supposed to in the time planned, and 10% even cause damage to the company.
During the 5th week of the 2023 Cosmic Conference we explored this topic in a webinar with Tandem’s Rabih Brair & Alex Damouni. We spoke in detail about the beginnings of a restructuring, how to get it right, and the organizational and leadership essentials that are needed to make the transformation a success. One question we hear from leaders often is: what do I need to look out for once the organizational structure has been redesigned?
In this article, we will cover two key initiatives that are necessary in completing the organizational (re)design process, including some questions leaders should be asking themselves.
1- Strategic Linking
Once a restructuring plan is set in motion and organizational charts are redesigned, the critical phase of strategic linking comes into play. Strategic linking means purposefully connecting and leveraging relationships between various elements such as objectives, departments, or teams. At this stage, different parts of the organization need to communicate, coordinate, and collaborate effectively and strategic linking is the connective tissue that ensures the entire organization operates as a cohesive unit.
When considering strategic linking, leaders may be asking themselves: How do we ensure information flows well through the org? What mechanisms do we put in place to ensure we all work towards the same goal?
This process involves establishing mechanisms to facilitate communication, coordination, and collaboration within an organization. There are a few ways to create these links:
Reporting Lines: Clearly defined reporting lines establish hierarchies and lines of communication. It is the most basic way of creating links within an organization.
Dotted Reporting: If you had direct reporting lines to everyone an individual worked with, your org chart might begin to look like Charlotte’s Web. This can be solved with dotted reporting lines where individuals have partial reporting responsibilities to leaders other than their line managers. This type of strategic linking can also enhance collaboration between different departments.
Task Forces: This is a temporary and specialized group formed to address a specific issue, challenge, or opportunity that requires focused attention and expertise. Popular examples include Task forces established for Internal Comms, or Branding.
Integrators: This involves assigning individuals or teams as integrators to oversee the overall coherence of operations. Examples of these include a PMO, a Chief of Staff, or a Traffic Manager at an agency.
IT Systems: Leveraging technology to support communication and collaboration is key. Examples of systems can be project or task management tools, a HRMS, or even shared communication tools.
By answering the crucial questions posed, leaders can navigate the turbulent waters of restructuring with a clearer understanding of the importance of strategic linking.
2- Alignment Strategies:
As the organizational redesign takes shape, another crucial aspect comes to the forefront - alignment strategies. This is about ensuring the organization is not just a collection of departments but a united force, focused on shared priorities.
Organizations that have high alignment are 72% more profitable than their competition, and without it, even the most well-thought-out restructuring plan can falter.
Alignment strategies involve mechanisms to ensure that different groups within the organization work collaboratively towards shared objectives. When considering alignment strategies, leaders should ask themselves: How do we help teams coordinate and collaborate? How do we reward people who do?
Common ways to align organizations include:
KPIs & Targets: Setting clearly defined Key Performance Indicators (KPIs) and targets to align teams with overarching organizational goals.
Incentives and Rewards: Establishing recognition and rewards for performance or behavior motivates individuals and teams. One way we love to recognize employees is for their alignment or organizational values.
Resource Allocation: Allocating resources strategically to support common goals enhances alignment. This can be pulling in a team for a project, or even outsourcing a capability needed.
In the intricate dance of organizational restructuring, alignment strategies take center stage. Leaders must not only design the structure but also implement strategies that ensure all parts of the organization are pulling in the same direction.
If you're tackling the challenge of organizational restructuring for strategic transformation, we are here to help. Book a one-on-one consultation today.