Competition is fierce; today, organizations are in a constant state of change in a race to survive. Drivers like globalization, industry disruption, supply pressures, and regulations are keeping executives on their toes to determine how to be sustainable.
To remain competitive, one of the strategies includes organizational design – the creation of a system where people work together to reach common goals. This often results in an organizational restructure that reflects and supports the change in direction and future growth targets.
Organizational Design (OD) initiatives are often initiated and owned by the Chief Human Resources Officer, or Human Resources department. However, we have also supported OD initiatives led by Chief Executive Officers, Chief of Operations or operations department. The ownership varies depending on the reason for the change, or the structure of the organization.
Today, organizational design happens more frequently than in previous years, with a survey from McKinsey stating that 60 percent of the respondents experienced an organizational redesign within the past two years, and an additional 25 percent said they experienced a redesign three or more years ago.
In addition to the statistics mentioned above, when done well, companies that are successful in implementing organizational design are:
- 30x more likely to adapt well to change
- 5.3x more likely to be a great place to work
- 2.3x more likely to exceed financial targets
Achieving these numbers and successfully managing this type of change requires a five-step change management strategy that includes an assessment, alignment with the business strategy, the creation of a change coalition, intentional employee engagement, and transparent and honest communications.
Read below to learn more about each step:
Step 1: Organizational Change Management (OCM) Maturity Assessments
Completing change maturity assessments is required for a successful organizational design. This is a step that cannot be skipped, regardless of the size and scope of the change. We recommend collecting insights via stakeholder interviews, change readiness surveys and change impact assessments. Together, these assessments will provide the information you need to determine a path forward. For instance, the interviews may reveal a gap in communications, or minimal change experience from leaders. The change readiness survey will identify if there are too many large projects on the go and will help determine what projects need to be taken off the table before continuing with an organizational design initiative.
Step 2: Alignment with business strategy and vision
One of the questions employees always ask is, ‘why are we doing this?’. To make it meaningful, it’s important to not only connect the dots to the business strategy and vision, but also to articulate what it means to them at an individual level. How will this change impact them? Why should they care? How will this change help them to support the business in reaching its long-term goals?
There are instances where no clear business strategy or vision is connected to the OD project. Harbinger recommends completing workshops with key stakeholders to define these if this is encountered. Once these have been developed, an employee engagement and communications plan is needed to increase awareness and gain buy-in.
Step 3: Building a Change Coalition (also known as a Change Champion Community)
Change must be activated from all levels, not just the top. Building a change coalition or change champion community that consists of leaders with or without title provides you with another channel to cascade important messages. It also empowers employees to be a part of the change – those appointed as change champions are responsible for supporting executives by sharing feedback, completing, and executing action plans to address resistance, and championing the change by demonstrating their alignment and support.
Step 4: Employee Engagement and Enablement
Employees spend a significant amount of time at work, and changes like organizational design can create feelings of uncertainty and mistrust. Much of this comes from being unsure of what the final structure will be and how it will impact them day to day.
While you won’t be able to prevent uncertainty completely, there are various ways you can maintain employee engagement throughout the transformation. To start, it’s crucial to create channels for continuous feedback. Beyond surveys, collecting feedback from your change champions provides opportunities to complete pulse checks and acquire insights throughout the change.
If you want lasting results, it’s important also to address and respond to the feedback. Keep in mind that responding does not always mean coming up with a solution or changing the direction of the project based on employee feedback. It can, however, look to confirm decisions or let your people know that more work is needed before you give them an update.
Enable your people by involving them through the process – can they assist with crafting communications? Are there upcoming events or activities they could help to plan and execute? By empowering your employees, you are igniting a sense of ownership and allowing your people to figure out how they can manage change.
Step 4: Celebrate Milestones
Celebrating successes (big and small) is a critical component in change management. Not only does it show appreciation for their efforts, but it also helps to boost confidence and increases motivation. There are several ways to celebrate milestones including:
1. Leadership recognition – this can include an email or verbal acknowledgement. These should be completed regularly and tells your people that you are paying attention and appreciate their contributions.
2. Award programs – these work well for large-scale changes. If employees are supporting the change by exhibiting one of your organizational values, nominate them.
3. Events – celebratory events require coordination but can have lasting results. These are great opportunities to connect as a team and reflect on all the work that has gone into driving the change. For significant business transformations, like Enterprise Resource Planning (ERP) system implementations, some of your employees could be making sacrifices like spending time away from their families. Holding a family event to thank not only your people, but also their families for their support, could be one of the ways to show your appreciation.
Step 5: Transparency and honest communications
Organizational design projects often bring feelings of anxiety. One of the first reactions from employees is “Am I losing my job?”. To support them with these feelings, it is recommended to be transparent and honest with your communications.
For the most part, most of your individuals will not and do not need to understand the rigorous process that goes into organizational design. As you work through what this looks like, it’s important to inform and stick to the facts. For example, are you working with an external consulting firm to determine what your future structure looks like? Before your employees see them wandering the halls or hear about them from the grapevine, take the initiative to let them know whom you are working with and how they are supporting you with this project.
Another example is to address whether people will lose their jobs. If you don’t know what the answer is, be open while also showing empathy. Let them know their feelings of uncertainty are valid and that once decisions are made, anyone impacted will be treated with respect and supported as they move through this difficult transition.
Beyond being transparent and honest with your communications, no information should be shared without a comprehensive communications plan. Important updates should be coordinated with key stakeholders like the legal department or executives, and when decisions have not been made, no information should be shared. Leaders must also be prepared and equipped to have difficult conversations. This can be challenging when they are also experiencing the same changes as their teams. To support them through this change, we recommend providing tailored leadership training.
An organizational design project is a regular requirement for many of today’s organizations; remaining competitive, meeting financial targets, and maintaining employee engagement are more challenging than ever. The five steps explained above are a great foundation for your organization, no matter what size, to execute impactful, supportive, and successful organizational design.
Author
Siri Maldonado
Director People Engagement
Toronto