Research Papers
Designing an Effective Organization Structure
January 2009
Effective organization design considers five, interrelated components
• Clear vision and priorities • Cohesive leadership team
2. Decision -making and structure
• Clear roles and accountabilities for decisions • Organizational structure that supports objectives • Organizational and individual talent necessary for success • Performance measures and incentives aligned to objectives
1. Leadership
5. Culture
4. Work processes and systems
3. People
• Superior execution of programmatic work processes • Effective and efficient support processes and systems • ‘High performance’ values and behaviors • Capacity to change
Source: Bain & Company organizational toolkit and Bridgespan analysis
TBG 090115-OCW-Org Design Structure
2
Principles of effective organizational design
• 1 Consider all five components of the “wheel”: A common misstep is to focus on structure alone (boxes and reporting lines) as the solution Align the five components to one another: One element that “doesn’t fit” can limit the performance of the whole system Align strategy and organization to one another: Organizational strengths and weaknesses influence the range of feasible strategies; in turn, organizations should evolve with any new strategic direction
• 2
• 3
TBG
090115-OCW-Org Design Structure
3
When structures are ineffective . . .
Likely root causes
Symptoms of an ineffective organization
Lack of coordination: work unfinished, teams isolated, out-of step Excessive conflict: Needless friction among internal groups Unclear roles: Functions overlap and/or fall through the cracks Gap in skills or misused resources: Missing or underutilized skills or resources Poor work flow: Disruptions, cumbersome processes Reduced responsiveness: Slow reactions to environmental shifts Conflicting communications: external stakeholders confused, complaining Low staff morale: lack of confidence or drive;
January 2009
Effective organization design considers five, interrelated components
• Clear vision and priorities • Cohesive leadership team
2. Decision -making and structure
• Clear roles and accountabilities for decisions • Organizational structure that supports objectives • Organizational and individual talent necessary for success • Performance measures and incentives aligned to objectives
1. Leadership
5. Culture
4. Work processes and systems
3. People
• Superior execution of programmatic work processes • Effective and efficient support processes and systems • ‘High performance’ values and behaviors • Capacity to change
Source: Bain & Company organizational toolkit and Bridgespan analysis
TBG 090115-OCW-Org Design Structure
2
Principles of effective organizational design
• 1 Consider all five components of the “wheel”: A common misstep is to focus on structure alone (boxes and reporting lines) as the solution Align the five components to one another: One element that “doesn’t fit” can limit the performance of the whole system Align strategy and organization to one another: Organizational strengths and weaknesses influence the range of feasible strategies; in turn, organizations should evolve with any new strategic direction
• 2
• 3
TBG
090115-OCW-Org Design Structure
3
When structures are ineffective . . .
Likely root causes
Symptoms of an ineffective organization
Lack of coordination: work unfinished, teams isolated, out-of step Excessive conflict: Needless friction among internal groups Unclear roles: Functions overlap and/or fall through the cracks Gap in skills or misused resources: Missing or underutilized skills or resources Poor work flow: Disruptions, cumbersome processes Reduced responsiveness: Slow reactions to environmental shifts Conflicting communications: external stakeholders confused, complaining Low staff morale: lack of confidence or drive;