How it works

A critical first step in organizational design is defining how the design should proceed so that the appropriate stakeholders are engaged, proper information is utilized, and the newly designed organization is aligned with the business strategy. This requires establishing who will lead the organizational design effort, defining the scope of the design, reviewing the business strategy and business environment to capture how the organization creates value, and articulating principles that will guide how the organization is designed.

looks_oneDetermine the scope and governance of the organizational design effort

Before organizational design can begin, clear guidelines must be established regarding the focus of the design and how it will proceed. A critical first step is to identify the scope of the organizational design effort. Businesses may undertake design for their entire organization, or specific business units or functions within the business may choose to engage in organizational design. Similarly, clarity should be given regarding the aspects of the organization that are in scope for the design. While good organizational design considers all aspects of the organization holistically, if certain elements will not be considered in design (e.g., compensation and benefits), these boundaries should be communicated early in the design process. Establishing clear boundaries for organizational design helps establish expectations and minimize disruption to the business.