By M. Isi Eromosele

When the elements of organization design are effectively configured, it could be turned into a highly powerful management tool that can engender competitive advantage. The alignment of organization design with business strategy can yield operational efficiencies and enhance company performance.

The establishment of the right structure can improve an organization’s ability to meet customer needs and create shareholder value.

Effective organization design can help a company do the following:

Facilitate Business Strategy

Companies that align their organization design with their business strategy will be repositioned to enhance their capabilities to improve their performance and achieve their goals.

A successful organization design will not only provide a vehicle for strategy delivery, but also create a new and exciting working environment, opening of new opportunities and creation of new strategic opportunities.

Shareholder Value Driver

Effective organization design can help a company increase its value. Conversely, poor design can destroy value. Some of the soft benefits of effective design include improved reputation, branding, quality, customer and employee satisfaction.

A number of the hard benefits include speedier decision making, improved organizational metrics, increased employee productivity and sustained profitability.

Improved Organizational Performance

When companies seek to improve performance through cost cutting, improved efficiency, focusing on high end customers, they often fail to analyze the way they are currently organized.

Effective organization design can enable a company to improve its performance by removing unnecessary layers from a company’s structure and by providing managers with the necessary power and resources to make decisions quickly.

Successful organization design can also make a company more nimble to allow for adaptation in the constantly changing global business environment.

Raise Competency Levels

Organization design can help companies redesign jobs and build new competency programs that will enhance the productivity of its personnel. This creates an environment where employees can thrive and innovate.

Having a motivated and creative workforce helps a company compete for even better talent as it also helps it create more value as it competes in the global marketplace.

Facilitate Business Transformation

Organization design can be a catalyst to business transformation by reinforcing a change in strategic priorities through a structural realignment.

When executives are faced with an organization design issue, they often make cosmetic changes such as changing some leadership roles and redefining some job responsibilities.

With this kind of woefully incomplete organization design, organizations inevitably encounter systematic, structural and performance issues in the future, such as the following:

Overlooked Political Realities

Organizational design must strike a balance between what is good for the company in the abstract and what is possible within the sphere of maintaining power relationships. Powerful individuals and influence can make or break the execution of organization design by giving or not giving their explicit support to the implementation.

Making The Wrong Choices

Without getting a general view and understanding of the fundamentals of organization design, companies often create a mismatch between the capabilities they want and the new structure they create. An elegant new organization chart would not necessarily put the company resources at the right places.

Picking The Wrong People

A key part of organizational design is putting the right people in the right positions. In implementing organizational design, many companies neglect to ensure that the people chosen for leadership roles have the right combination of knowledge, experience and competence for the job.

Additionally, they fail to motivate people who can help the employees get better at their respective jobs.

Failing To Execute

Many companies start with a strong design, but fail to execute it. In particular, many companies implementing organizational design fail to secure buy-in from key leaders. At the same time, they fail to communicate effectively to employees as to why organization design is imperative within their organization.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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