Strategic Technology Resources

Thoughts on Organization Design

When changes in your business mission require a new organization or modifications to the existing organization, what approach do you take?

One of my former colleagues kept the names of his employees written on magnetic rectangles on a metallic board behind his desk and when he felt the need to modify his organization, he simply rearranged the names. The name blocks carried no titles, no expertise areas and no indication of responsibilities. He prepared no formal position descriptions and discussed responsibilities only in a cursory fashion with his employees. He solicited no input in a systematic manner nor communicated his rationale.

Admittedly, this approach is extreme and most managers do integrate market, regulatory, business, technical, functional and operational considerations into their organization designs. The purpose of this paper is to discuss a systematic approach to organization design. One that is tailored to the business mission and one that effectively directs expertise and resources toward accomplishment of business goals.

If you are considering a systematic approach to organization design the following may be of interest:

Establish a clear picture of the existing business

Identify distinct business units
Define underlying capabilities and exploitable assets
Determine operational upgrades that are needed to be competitive and profitable
Identify market areas to be served and addressable un-met needs

Formulate objectives to be achieved for each business and visions for what new businesses are intended to be
Determine the functions required to support each business initiative

Establish the life cycle position and support requirements for each business/product area
Identify technologies and scientific skills needed to support each initiative

Determine requirements for stand alone resources

Which technologies
Which business units
Which market and product application areas
Which regulatory environments

Establish optimum groupings of functions and skills

Accommodate stand-alone requirements
Consolidate functions for efficiency as appropriate

Define organizational structure

Evaluate the effectiveness and relevance of existing organizational units
Retain features of the old organization that meet the new design requirements
Define and accommodate the workflow within and among functions
Determine level of resourcing supported by the businesses
Determine projects and programs that will be actively supported

Describe individual positions

Define responsibilities
Specify individual performance requirements

Fill positions in the new organizational structure

Evaluate effectiveness and relevance of current employees
Reassign individuals who do not meet position requirements or who aren’t needed in the new organization
Identify missing skills and talents needed to achieve business goals
Recruit individuals and/or form alliances with external providers

Implement changes and transition to the new organization

Depending on the specific challenges faced, not all the above considerations may deserve active attention, but it is useful to have a background understanding of all the areas before making significant changes. And of course, it is imperative to follow human resources policies established by your organization to insure fair and equitable treatment of all individuals.

In order to achieve the most effective organizational design, it is imperative to gather appropriate high quality input from supporting and affected parts of the organization.

I am, eager to discuss your organizational design challenges and to share techniques I have gained in 35 years of building and managing industrial organizations.

F. Wyman Morgan, Ph.D.

President

Strategic Technology Resources

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