Keys to Successful Organizational Redesign

Companies that successfully redesign for the future consistently manifest nine key characteristics.

Steve Jobs was once quoted as saying "If you look really closely, most overnight successes took a long time." In the midst of this turbulent and unpredictable Fourth Industrial Revolution, this can certainly be applied to the efforts of many companies to redesign their organizations.

The rapid evolution of frontier technologies, talent shortages, data overflow, fledgling business ecosystems, industrial disruption, and accelerating strategic changes can all be attributed to the need for organizational redesign today. The problem is that most companies are finding themselves in a constant state of flux as they attempt to respond to pressures that simply did not exist in previous industrial revolutions.

The good news is that despite these constant and seemingly insurmountable challenges, there is such a thing as a successful organizational redesign. In this article, we’ll share a brief synopsis of what we learned while helping companies navigate this process and explain what executives can do to improve the odds.

Getting Started

An initial goal must be to align and optimize an organization’s capabilities, culture, structure, processes, technology, people, metrics, and talent practices. Historically, companies tend to manage innovation within a single dimension. However, the strategic introduction of a new product or new technology is not always accompanied by the necessary operating model or work design changes.

Implementing wholesale changes in traditional business models and preparing for extraordinary organizational disruption is mandatory. The speed and magnitude of these changes will accelerate exponentially, as hybrid and remote work continues to flourish and rapid advances in areas such as artificial intelligence (AI), decentralized knowledge networks, big data, quantum computing, blockchain and the industrial internet of things (IIoT) change the business landscape forever.

Given that learning and adaptation are constant, instigating better methodologies for managing ongoing large-scale change is essential. Long instantiated vertical structures and siloes conflict with the horizontal structures needed in digital-first organizations. Engagement and cultural changes without the context of new work and new ways of working will have limited sustainable value, even as human and machine work allocation becomes integral to organizational design.

As companies embrace this organizational and work transformation, human talent must evolve in concert with advances in technology, and traditional “push” business models must give way to “pull” as capital, talent, and knowledge start flowing rapidly across geographical and institutional boundaries.

Superior organizational design highlights agility, accountability, continuity, and business integration. The traditional focus on hierarchical spans of control and specific job descriptions will dissipate as the contemporary model of institutional innovation gains traction.

When the organizational redesign of a company matches its strategic intentions, we consistently find that several key characteristics are manifest. The company’s structure, processes, and people all support these outcomes and focus the organization’s ongoing efforts on attaining them.

1. A tangible sense of purpose. Emanating from business strategy and modeling, a sense of purpose is driven by a common understanding of the company’s aspirations; in other words, a clear mission and shared vision of what the organization is striving to be. Today, we must redefine the very purpose of our corporations – why they exist; whom they serve; how they give back; how they clean up after themselves and on what timetables; how they contribute to social harmony and unwind practices of inequality; and how they shape better, safer, more satisfying, and creative human work.
2. Adaptation to rapidly shifting sources of value. The ability to learn flexibly and efficiently and to apply that knowledge across situations are key components for success in an increasingly complex and volatile business environment in which sources of value are prone to rapid and unpredictable change. As technology changes work and cultural norms undergo seismic shifts, we have the opportunity to change the way we think about work and leadership by opening new avenues of both human and machine potential. By adapting to shifting sources of value, we will inspire purposeful learning, engagement, and empowerment throughout the workforce.
3. Robust and non-insular business ecosystems. Powerful business ecosystems, in combination with digital platforms, are creating operational agility while also blurring traditional organizational boundaries. Third-wave companies will constantly reshape their ecosystem and platform strategies in order to create new value and foster disruption in the rapidly evolving digital economy.
4. A fluid organizational structure. Traditional hierarchical organizational structures, with rigorous job descriptions, managerial spans of control, and siloed functions based on specific jurisdictions, will be replaced by agile organizations in which the company functions as a flattened structure with end-to-end team accountability and flexible resources. This approach will be designed to complement the implementation of standardized processes that facilitate rapid changes.
5. Accelerated decision-making. Clarity on the overarching goals and objectives of the business, coupled with an agile and accountable organizational structure, lends itself ideally to an accelerated decision-making process. This in turn will increase collaboration, reduce costs, and increase speed-to-market.
6. Data-rich technology platforms. Organizations that are structured to facilitate the mining of data-rich technology platforms are perfectly positioned to succeed. A data ecosystem and infrastructure that enables the interaction of different stakeholders and the resolution of operational issues will also support data platforms. These will be contextualized as key insights during decision-making moments in new work.
7. Rapid organizational learning. The organization of the future will foster learning at all levels by actively supporting reskilling while also promoting connectivity and engagement. Part of becoming future-ready means that the organization must place accessible, meaningful, and essential learning high on its list of strategic priorities. Even as algorithms unlock complex patterns and insights with unprecedented speed, business leaders must also leverage human capabilities to expand learning on multiple timescales.
8. Systematic Ingenuity. Harnessing the collective ingenuity of an organization represents a different approach to transformation – one that brings institutional innovation to life. Creativity must be cultivated as a new normal. This means infusing a mental model of the company’s purpose in the mind of every worker. Each human affiliated with the day-to-day operation of the business must see the purposeful value of their role in bringing this mental model into reality through the rules, protocols, and processes that fulfill the overarching business strategy.
9. Ongoing investment in scarce talent. Human capital will be a key resource for companies competing in the third wave. By establishing a link between the organization’s strategic priorities and talent needs, the organization of the future will know exactly where to invest in reskilling and upskilling the existing workforce, as well as attracting and retaining scarce new and tenured talent.