Organizational Design: Why It’s Needed in Transitional Times

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Jun 9, 2020

A deep understanding of your workforce is needed to face the new normal, but it can be hard to grasp with many companies reducing and shifting staff each week. A McKinsey survey found that over 80 percent of restructuring initiatives fail to deliver the desired value in the necessary amount of time. Poor organizational design during these times results in confusion within roles and unnecessary complexity for companies and employees.

Implementing a clear strategy for organizational design and tools to map organizational structure provides the basis of any transactional human resources system. Up-to-date org charts reduce confusion, support business operations, and grant critical insights into the realities of today’s ever-shifting workforces in more ways than one.

Data-driven knowledge in times of transition

In the current environment, HR leaders are looking to quickly and easily see how many people work across the organization and the cost of operations. However, due to multiple or siloed data sources or HR systems, companies may find accessing their latest organizational data, both labor-intensive and time-consuming. This is particularly true for global enterprises.

In such cases, a clear org chart can offer a single source of truth for an organization’s span of control, bench strength, headcount, and total salary. By making the necessary distinctions between employee and position data, companies can map a complex matrix of relationships, including contractors, permanent staff, concurrent employment, and multiple incumbents.  Moreover, these analytics also provide real-time visualization of multiple types of talent data, including succession management, performance, and skill scarcity, offering clarity into how these essential analytics roll up to various departments and empowering leaders to make informed decisions.

Mapping potential scenarios

When planning for business resilience in times of transition, having a clear view of your workforce is the cornerstone to strategizing any type of reorganization, reduction in force, divestiture, merger, or acquisition. An enterprise workforce planning team needs access to a real-time view of the company for both input and output while analyzing potential scenarios.

A dynamic org chart can also solve for less structural problems and are an ideal tool to recognize and reward in-house talent. When looking to backfill a critical C-Suite position, for example, large corporations may struggle to identify an incumbent’s skill set, tenure, or readiness for a new role. Access to accurate, up-to-date HR data, however, provides concrete information and options, opening the floor to potential roadmaps for both individual employees and the company itself.

People insight

While organizational design is necessary from a legal and management perspective—every company needs to establish a clear, hierarchical reporting structure and division of labor—agile, multipurpose teams are a part of our professional reality, and these innovative, informal structures are all the more relevant in large organizations. Workforce productivity, collaboration, and synergy—the intangible human networks that make up the shadow organization—can be challenging to map.

New developments in technology and new ways of working together are driving the use of analytics tools like organizational network analysis (ONA), which allows organizations to visualize their workforce with a more lateral breadth. ONA data can provide clearer insights into employee networks, diversity and inclusion, innovation, and employee engagement.

Companies are shifting their workforce daily and planning for the future at a rapid pace. A clear view of the organization that is updated in real-time is necessary to stay informed and strategic. Rather than simply relying on hierarchical categorizations, organizational design illustrates the real flow of tasks among individuals, offers valuable insights into productivity and cooperation, and allows decision-makers to not only understand how their organization really works but also better plan for the future. This process supports and nurtures HR teams and talent throughout these difficult times . . . and will sustain it well beyond.

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