How it works

An essential first step in organizational design is defining how the design should proceed so that the appropriate stakeholders are engaged, the elements of the organization (e.g., functions, business units, teams) to be impacted are identified, the necessary information is used, and the newly designed organization is aligned with the business strategy. This requires establishing who will lead the organizational design effort, defining the design scope, reviewing the business strategy and business environment to understand how the organization creates value, and articulating principles to guide the design.

looks_oneDetermine the scope and governance of the organizational design effort

Before organizational design can begin, a clear statement of the reasons for updating the organizational structure is necessary to ensure that efforts are aligned around a common purpose, along with guidelines for the design's focus and the process by which it will proceed. The purpose statement should explain the circumstances driving the need, such that design choices and priorities can be addressed. Typically conducted at the executive team and/or Board of Directors level, the need to update organizational structures can stem from basic considerations such as operational growth and expansion, a merger or acquisition, or misaligned or poorly coordinated work efforts across functions or business units.