One of the aspects I love most about business is evolving organizational structures to position the company for exponential growth. For me, it’s about thinking at a high level about how a business can reconfigure itself with minimum disruption and maximum impact.
Early in my career, I had the opportunity to work on two McKinsey task forces while at global multibillion dollar companies. While I truly appreciate the rigorous approach, I also realized that an important aspect of any organizational design evolution is not fully quantitative or simple (e.g., FTE boxes) because it’s tied to your people, processes and customers.
So now when I advise boards and work with founders, I focus on a few key questions:
- What is your current business strategy? Does your current organization design support that?
- Is your leadership aligned on why, when and how the company’s organizational structure strategically needs to evolve and adapt to market shifts and customer demands?
- Is there role clarity and accountability (tied to incentives) so people can (globally) cross-functionally collaborate, learn and drive results?
- How does your customer benefit from an evolved organizational design? And your team? Are they more empowered or less?
- What organizational structures have you considered to meet your strategic goals? And why did you implement that structure? How did it work? Or why did you hold off?
- What processes (i.e., new ways of working) are necessary to support the new organizational design and optimize results?
- What new capabilities are needed in the new organizational design? Which team members could move into potential new roles? Are you making organizational decisions around one or two employees? Are there gaps?
- How will you measure success? What key performance indicators (e.g., market share, EBITDA, team retention, customer lifetime value, etc.)? In what timeframe?
In addition to the responses to the above questions, I like to observe for myself how departments and cross-functional teams work on key initiatives. Because many times, the perceived WOW is different from what happens within the organization.
As you consider different models, it’s also important to remember to keep your customer in mind and avoid the trap of only being inwardly focused. I’m not saying that your leadership team isn’t critical; they are and need to actively provide input and discuss the “why,” “how,” and “what” associated with new organizational design. However, remember your consumer is important, too.
Finally, as you think through how you will measure if the organizational evolution was a success, it’s key to agree on a limited set of metrics and correlating timeframes.
In summary, we’re living in a rapidly changing business landscape. Therefore, designing a dynamic, evolutionary organization is key to ensuring that your company can strategically scale and drive long-term value creation that benefits not only shareholders but also stakeholders, including customers, employees and the larger community.
This article was originally published on LinkedIn and has been republished with the author’s permission.