5 Things to Consider in Organizational Design

5 Things to Consider in Organizational Design

Does your company have what it takes to thrive in today’s fast-paced marketplace?

 

One thing I’ve seen over and over when consulting with different organizations: most of them have trouble laying down the structure that will help them succeed. When it comes to organizational design, the options for roles, span of control, chain of command, and metrics can be overwhelming. 

 

However, it’s worth making the effort to find the right balance, as your organizational design greatly impacts your team’s success. Here are the factors you should consider.

 

Designing Your Roles

 

First, determine the necessary roles within your organization. A good place to start is by deciding what your organization needs to get out of each role. What are the outcomes required of this role? What metrics will need to be accomplished? Identifying these will help you establish the tasks this role will be responsible for. 

 

Designing Your Span of Control

 

You’ll also need to consider the span of control for each role, meaning the number of employees the role oversees. This span can vary depending on several factors. For example, roles involving a high volume of work or longer learning curves should have less span. Roles with more standardized processes and high levels of independence should have more. 

 

Metrics through Organizational Design

 

As you consider how metrics fit into the structure of your organization, it’s important to make sure they’re well-designed.

 

To establish solid metrics for your team, begin brainstorming possible metrics by asking the following questions: Do your best performers do differently? What gets in the way of results? At this point, you’ll want to narrow down the list to only the impactful measures you’ll want to test.

 

Once you’ve established that the metric works for you, make sure it’s well-defined. This includes identifying whether it’s a team or individual metric and who is responsible for tracking it. Having a solid definition can help you explain it to and implement it with your teams.

 

Designing Your Decision Process

 

From here, it’s time to determine how decisions will be made. Identify key decisions affecting your business, and determine whether each one will be centralized or decentralized. Centralized decisions will involve just one individual in your company, while decentralized decisions will happen among your teams

 

For each decision, you’ll want to know who will make it, who will review it, and who will need to be informed. You should also consider the time frame available for the decision, as well as any avenues for appeal, if necessary.

 

Communication and Information Flow through Organizational Design

 

Within any organization, the flow of information is critical. Work to decide what information needs to be shared and who needs to know it. This can help you decide sharing frequency and who provides the information. You may also want to consider any secondary users who will need the information as well.

 

As you determine your next steps, check out our blog for more insights on your organizational needs.

 

Once you’ve considered these factors, the basics of your organizational design will begin to come together. The process will involve time and effort, but honing all of the factors above to your needs can greatly impact your success.