Organisational Structure Design as a Process (Overview)

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On any project that delivers business change one of the first things that is wanted from the project team is the Organisation Structure. Most businesses today recognise their human capital assets as the most important part of the business and will want clarity early on in the project on what the new structure will look like. CEO’s and executives will want a structure that reflects their vision, all in the fairly early stages of the project.

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However, it is of critical importance that the business and project team recognise the impact that the Organisational Structure has on the successful delivery of change in the business. A business is to a large degree no more than the sum of its people. Therefore, a formal method is required to ensure that the most appropriate structure is implemented.

This method needs to be supported with a sound Change Management Method that is implemented through the project to ensure minimal disruption and resistance to change.

Because every business is unique it must be understood that there is no golden recipe to follow. Each situation requires a blend of factors to address its particular challenges.

Every time that a Organisation Structure is changed, extended or altered the factors that have an influence on the Organisation Structure for that particular business must be understood.

These factors can be to the business advantage or disadvantage.

They are:

• Numbers of personnel

• Customers

• Equipment

• Process

• Product

• Key People

• History

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A thorough understanding of these factors needs to be facilitated with the business executives by the Business Engineer or consultant. Once it is understood there are three potential recipes that can be used to create an optimal Organisational Structure.

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• Organisational Structuring using the Function Structure Diagram (FSD)

• Organisational Structuring using the Object Interface Diagram (OID)

• Organisational Structuring using Attribute Dependency Diagram (ADD)

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This implies mapping of the leaf node functions, activities or events within specific clusters to the Organisation Structure. When deficiencies between the Organisation Structure and the FSD, OID or ADD exists it needs to be remedied. Each function, activity or event should have at least one organisational entity mapped to it.

The original Organisation Structure is then altered to map against one of the diagrams mentioned above. The alterations that are performed need to take into account the influencing factors on the business that have been derived from facilitated sessions with management.

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At each valid intersection of the mapping instance a responsibility can be derived. The nature of these responsibilities is described and the responsibilities are included as a further decomposition of their relevant organisational units

After the organisational units are decomposed into responsibilities, we have to start to man these responsibilities with the necessary resources.

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A gap analysis has to be performed to match the required skill base against the current skills base. This will indicate to management what the resource gaps are. The corrective measures have to be implemented. Every responsibility has a definite skills requirement as well and by continually mapping these against the available skills base, management can plan, organise, direct and control the skills upliftment process within their respective areas.

Once these procedures have been completed a more optimal organisation structure is the direct result and a direct value-add to the business will be seen. The entire functionality of the business will improve and communication between responsible parties will be more optimal.

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