Before you change the organisation, understand the one you already have
By Adam Young
When we're brought into an organisation, there's usually already a view about what's wrong. There are too many layers, a team doesn't have enough capacity, a process isn't working as it should, or perhaps the structure simply needs to change. That's completely understandable. Leadership teams know their businesses well and, often, there's a good reason they've reached that conclusion.
The only thing we'd caution against is assuming that the first answer is necessarily the whole answer.
We've learned over the years that what looks like a capacity problem can be about the way work moves between teams. What appears to be a structural issue can be caused by unclear accountability, and something blamed on technology can turn out to have much more to do with the process around it.
That's why, before we start designing anything, we spend time understanding what is happening. This isn't about disappearing for six months and coming back with a weighty report. Good diagnosis should do the opposite: it should help a leadership team get to the decisions that matter more quickly and with greater confidence.
Start with the work, rather than the answer
There's nothing wrong with beginning with a hypothesis. In fact, the people running an organisation will usually have a pretty good instinct about where the friction is. The value comes from testing that instinct against what is happening across the business.
That means looking at the work itself. Where does it happen? Who is involved? Where does it slow down or move unnecessarily between teams? How are decisions really being made, rather than how the governance model says they should be made? Where are people spending time compensating for processes or structures that aren't quite working?
Looking at an organisation in this way can produce a very different picture from looking at an organisation chart. The chart is useful, of course, but it tells you where people sit. It doesn't necessarily tell you how the business gets things done.
The people doing the work usually know more than we think
Data is an important part of any diagnosis. It can help us understand where capacity and cost sit, how work is distributed, where processes could be simplified and where there may be opportunities for automation or different ways of working.
But the numbers only tell part of the story. You also need to talk to the people who experience the organisation every day.
They know which processes work perfectly well on paper but become difficult in practice. They know which meetings genuinely help people make decisions and which have simply become part of the weekly routine. They know where responsibilities overlap and, quite often, they know exactly why something that should take two days routinely takes two weeks.
Different people will inevitably have different perspectives, and that's useful too. The aim isn't to decide whose version of the organisation is correct. It's to bring those perspectives together with the evidence and build a more rounded view of what's really going on.
A good diagnosis should also tell you what not to change
This is an important part of the process and one that can easily get lost.
When you're brought in to help improve an organisation, there's a natural tendency to focus on everything that could be better. We think it's equally important to understand what's already working well.
There may be a team that's found a particularly effective way of working across functions, a leader who's created genuine accountability without adding layers of governance, or a process that's delivering exactly what customers need. Sometimes informal ways of working have evolved because people have found a better answer than the formal operating model provides.
Those examples are worth understanding and protecting. Organisation design shouldn't become an exercise in finding as many things as possible to change. Sometimes one of the most useful recommendations you can make is to leave something exactly as it is.
What this looks like in practice
We saw the value of this approach when working with a global consultancy that wanted to improve the effectiveness of its UK and US finance function.
Rather than beginning with a proposed structure or a headcount target, we started by understanding the work. We carried out activity analysis across around 470 finance employees and combined that with a review of spans and layers, process maturity, opportunities for automation and offshoring, and external benchmarks.
Against a people-cost base of approximately $39m, the analysis identified around $13m of savings potential. More importantly, it gave the leadership team evidence they could use to make decisions about what should happen next.
Before discussing individual roles or drawing the future organisation chart, we agreed a set of design principles with the leadership team. This helped keep the conversation focused on what the business needed from its finance function rather than immediately making it about where individual teams or people would sit.
From there, the work moved into organisation design and then into delivery across offshoring, automation and programme implementation, with a proportion of our fees linked to the savings actually realised.
The diagnosis wasn't an exercise we completed before getting on with the real work. It was what allowed us to understand what the real work needed to be.
Diagnose before you redesign
There will always be pressure to move quickly when an organisation isn't performing as well as it should. We understand that, and good diagnosis shouldn't get in the way of pace.
What it should do is give leaders enough evidence to make better choices about where to focus their time, money and attention. Sometimes it will confirm what everyone already suspected. Sometimes it will reveal that the underlying problem is quite different. It may even show that something you were preparing to change is working well and should be protected.
That's the real value of understanding the organisation you have before designing the one you want. The objective isn't to produce a new organisation chart or to change things for the sake of it. It's to make the business work better, and that starts with being clear about what genuinely needs fixing.
How well do you understand the organisation you're trying to change?
On 15 October, we're bringing together a small group of senior leaders for a smart/tasking Breakfast Briefing to talk about exactly this. We'll share some of the lessons we've learned from working with organisations going through change, look at practical examples and, just as importantly, create space for leaders around the table to share their own experiences.
If you're considering how your organisation needs to evolve, we'd love you to join the conversation.
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