Organisational Structure

Description

• 
  The selection of a preferred organisation model which identifies the optimal configuration of organisational units to facilitate the accomplishment of tasks/responsibilities defined in the “To-Be” Process Model.  The preferred model is chosen from a number of alternative scenarios illustrating potential groupings of work duties, once each scenario strengths and weaknesses have been assessed.

Business Value

• Senior management is able to weigh the advantages and disadvantages of a variety of organisational models, taking into consideration factors such as:
• Total employee remuneration costs
• Optimal use of skills
• Degree of anticipated organisational upheaval required
• Fragmentation within and across organisational components
• Spans of control.
• The full benefits of the BPI initiative will be significantly diminished if the organisational structure is not properly aligned to support the newly redesigned processes.

Approach

Several organisation structure models are developed to illustrate alternative groupings/allocations of responsibilities for the newly designed work processes.  The new organisation structure must support and facilitate the effective delivery of services as defined by these work processes.  To communicate fully the implications of each scenario, it is often required to begin to define (at a high level of detail) the roles and responsibilities of staff under each scenario, as well as rough estimates of various broad categories (or skill levels) of employees.  (Refer to subsequent deliverables for descriptions.)

Senior management may request several iterations of this scenario-building cycle, to weigh the advantages and disadvantages of each scenario, and to decide on the preferred option.

1. Develop/adapt, with input from senior management, a set of organisational principles to guide the design of the new organisational structure.
1. Based on these principles (and any other pertinent factors such as salary costs, retraining termination/ hiring costs, etc.), establish evaluation criteria for the assessment of alternative organisational models.  It may be appropriate to allocate a weighting factor to the various criteria to reflect senior management’s priorities.
2. Develop potential organisational scenarios, by devising various ways of grouping/allocating responsibility for processes and subprocesses.
1. Typically, two to four scenarios will initially be documented and assessed at a high level (i.e. at the unit level, as opposed to the position level) and presented in the form of organisation charts supported by explanatory text.
3. Present options to senior management and obtain their decision on a preferred scenario.  Apply the evaluation criteria and weighting factors to each scenario to identify a recommended model.
4. Create a detailed organisational model for the preferred scenario.
1. This model identifies:
1. Discrete organisational units
2. Each unit's area of responsibility for the new work processes
3. Reporting and working relationships
4. Approximate number of positions per unit.
2. (Workstep 5.0 can only be undertaken after the Delineation of Roles and Responsibilities and the Workforce Numbers and Cost have been completed.)
5. Determine where (and whether) existing units/positions fit within the new organisational model to plan the migration of existing resources to the new structure.
1. Identify in detail the requirements for retraining, hiring and terminating employees (bearing in mind the tenets defined earlier in the “To-Be” Human Resource Model).

Guidelines

Problems/Solutions

• The assessment is often not “clear-cut”, especially when there are drawbacks associated with every scenario.  In such circumstances, identify the model with which senior management is most comfortable.

Tactics/Helpful Hints

• This is not a consensus-building exercise; it must be top-driven.
• The following organisational principles should provide guidance in developing an organisational structure that will support the attainment of the BPI objectives. These principles should build upon and be consistent with the overall Shared Values and Guiding Principles defined during the Focus Phase.
• Organise around the “To-Be” Process Model as opposed to traditional “functional departments” to permit greater self-management and to eliminate unnecessary supervisory layers.
• Develop organisational units of an appropriate size, so that goals can be met while minimizing costs and maintaining flexibility.
• Reassign corporate and staff functions to the various teams where appropriate; limit requirements for headquarters/corporate resources.
• Reflect the temporary and transient nature of the organisational structure; allow for temporary arrangements and fluidity between organisational boundaries to enable the organisation to adjust rapidly to changing client requirements.
• Ensure reasonable spans of control.
• Provide for a clear delineation of authorities and responsibilities to avoid duplication.
•  In very large organisations, responsibility to “flesh out” detailed organisational designs within each unit (Branch, Division, etc.) can be delegated down to individual managers once a high-level model has been defined and selected by senior management.  Under such a scenario, the project team provides training and assistance to managers, and monitors their designs to ensure consistency and application of guidelines, etc.
• Creativity and imagination are required to accomplish this task.  Just as in process design, one must not be constrained by existing organisational structure or positions.
• In all communications to staff about the impending changes, re-emphasize the organisation’s workforce adjustment strategies (e.g., job security provisions, early departure / retirement incentives) defined at the outset of the project as part of the Shared Values and Guiding Principles.
• When changes to Position/Competency Profiles have implications for collective agreements, a series of consultations with union representatives may be required before final decisions can be made on organisation Structure.

Resources/Timing

• This task is highly sensitive, as people’s jobs (and in some cases “empires” or “fiefdoms”) are at stake.  Participants in this exercise must therefore remain highly objective. This task is thus often best assigned to a Human Resources specialist (frequently an external consultant), who works closely with the Project Sponsor (and steering committee, if applicable).
• Previous experience in organisational design is required to produce this deliverable.