Additional Benefits Resulting From Optimizing Organization Design®

    Going beyond specific performance improvements, Optimizing Organization Design® can also result in many other broader benefits for your organization. The achievement of these benefits is a result of both optimizing organization design, in general, and in particular, improving manager – direct report alignment. Research and our years of experience show that manager – direct report alignment is the most significant organization design factor and is, by itself, directly related to performance improvement.

    Additional Benefits Resulting From Optimizing Organization Design

    While there are more benefits, we highlight seven important additional benefits:

    • Better employee satisfaction
    • Better customer satisfaction
    • Better financial performance
    • Sustainable competitive advantage
    • Significant return on investment
    • Better strategy implementation
    • Better human resources management

    Optimizing Organization Design Can Lead to Better Employee SatisfactionOptimizing Organization Design Can Lead To Better Employee Satisfaction

    Our research and our client experience show that optimizing organization design leads to better employee satisfaction. It can produce better manager – direct report alignment (as well as better overall position alignment); better clarity of accountabilities and authorities; better matching of people to positions; and better alignment of deliverables. Any one of these alone might have a positive impact on employee satisfaction. The combination of all or most of them has an even stronger impact.

    Productivity in the department has improved and user satisfaction has increased remarkably while employee morale and team work have shown exceptional gains.

    quotesJohn W. Young
    Executive Vice President, Human Resources
    Four Seasons Hotels and Resorts
    April 2002

    Optimizing Organization Design Can Lead to Better Customer SatisfactionOptimizing Organization Design Can Lead To Better Customer Satisfaction

    Greater customer focus is facilitated through improvement in the alignment of positions, accountabilities and authorities, people and deliverables. This improved focus through optimizing organization design leads to better customer satisfaction. There is additional research showing that better customer satisfaction is also related to better financial performance.

    We found that better aligning positions, clarifying accountabilities and authorities, matching people to positions, and developing business plans has resulted in improved employee performance and customer satisfaction.

    quotesNaseem Somani
    President & CEO
    Gamma-Dynacare Medical Laboratories
    October 2011

    Optimizing Organization Design Can Lead to Better Financial PerformanceOptimizing Organization Design Can Lead To Better Financial Performance

    Our research and client experience show that optimizing organization design leads to better financial performance. There are three factors related to this.

    The first is that improvements in the alignment of positions, accountabilities and authorities, people and deliverables should lead to better financial performance. These are foundations for performance, and should be factors that support better financial performance. The second factor relating organization design to financial performance is that Optimizing Organization Design can produce cost savings. The third factor is the related research. It shows relationships between the manager – direct report relationship and profitability, as well as relationships among employee satisfaction, customer satisfaction and financial performance.

    We were indeed able to establish a statistically positive relationship between organization design and performance using our performance data and your organization design framework. We found that Capelle Associates’ approach to better organizational capabilities is related to better financial performance in the global pension fund industry. This includes governance, layering and delegation.

    quotesKeith P. Ambachtsheer
    President
    K.P.A. Advisory Services
    Co-author, Pension Fund Excellence: Creating Value for Stakeholders
    October 1999

    Optimizing Organization Design Can Lead To Sustainable Competitive AdvantageOptimizing Organization Design Can Lead To Sustainable Competitive Advantage

    Better organization design as we define it provides a competitive advantage. Not only can it provide the benefits of employee satisfaction, customer satisfaction and financial performance, but our approach can also lead to sustainable organizational transformations. It requires skill and commitment, and can become a more sustainable competitive advantage than others that are more easily copied.

    The advice came at significant turning points in our history and helped to keep the fund competitive and focused on identifying unexpected risks while remaining at the top of our game.

    quotesBob Bertram
    Executive Vice President, Investments
    Ontario Teachers’ Pension Plan
    November 2007

    Optimizing Organization Design Can Lead to Significant Return on InvestmentOptimizing Organization Design Can Lead To Significant Return On Investment

    Optimizing Organization Design delivers measurable cost savings. The Capelle Associates Benchmarking Database shows average potential annual cost savings of about $2,500 per position. The total in each case is found by multiplying this number by the number of positions in the review (e.g. in a 1,000 employee organization, the number would be about $2,500,000).

    Since the investment is relatively small related to this outcome, the average potential annual return on investment (ROI) is 589%. However, most of our clients consider these cost savings as only a bonus on the road to enhanced performance. The more substantive payoff should be the enhanced organization performance, which includes financial performance.

    The icing on the cake is that, although organization design did not start for us as a cost cutting exercise, it ended up paying for itself within the first year of implementation and that’s a recurring benefit.

    quotesGerry Savaria
    President & CEO
    LS Travel Retail North America
    July 2011

    Optimizing Organization Design Can Lead to Better Strategy ImplementationOptimizing Organization Design Can Lead To Better Strategy Implementation

    Organization design is the foundation for strategy implementation. A sub-optimal design will result in a weaker strategy implementation. Our organization design approach, including the focus on aligning deliverables, can strengthen your strategy implementation.

    Optimal alignment of positions, accountabilities and authorities, people, deliverables and tasks is critical for an organization to be capable of best delivering its strategy. Our research shows that only about 50% of manager – direct report relationships are optimally aligned, so it seems unlikely that most organizations are best positioned to deliver their strategies.

    Our approach also makes it possible to integrate strategic performance management systems into one, more integrated, powerful organizational development and review system.

    We have accomplished much over the years. Accountabilities are clearer. Administration is appropriately centralized. We created a new Product Development function to deal with the increasing complexity of this area. This separate focus helped us to accomplish much more than would otherwise have been the case. Similarly, we created a new function to deal with our fastest growing business line, which further enhanced its growth. In summary, we designed our organization to better achieve our strategy. In fact, I believe that organization is part of strategy, and is divorced from it to the peril of both.

    quotesDerek Fry
    President
    Visa Canada Association
    March 2006

    Optimizing Organization Design Can Lead to Better Human Resources ManagementOptimizing Organization Design Can Lead To Better Human Resources Management

    Our organization design approach provides the foundation for human resources management. This includes talent management, recruiting, performance management, retention, satisfaction, job evaluation, career progression, succession planning, compensation and managerial leadership training.

    Optimizing Organization Design can provide the following added value to human resources management:

    • Determine how many levels (strata) an organization should have and place each position in the correct level or stratum
    • Organize each level or stratum into three parts (low, medium and high) to provide a framework for job evaluation, career progression and compensation
    • Better clarify accountabilities and authorities
    • Break down silos and improve work across the organization
    • Develop more powerful managerial leadership training
    • Improve talent management
    • Improve manager – direct report alignment which improves the employee relationship with manager and employee satisfaction
    • Ensure that employees are doing the level of work that is commensurate with compensation (employees are often working below this level)
    • Ensure that employees are doing the appropriate tasks rather than doing lower level tasks that other employees at a lower level of compensation can do just as well, or better.
    We have been able to utilize these principles to strategically realign several critical Human Resources’ systems and practices. Of greatest significance is the impact they have had in the areas of Talent Management, Talent Pool Assessment, Compensation and Job Evaluation.

    quotesEric Pickering
    Vice President, Human Resources
    Allstate Canada Group
    February 2006

    Find out more about our Optimizing Organization Design® approach and how it can help your organization to achieve these benefits. Please call 416-236-3044 or fill out our online form to request a discussion.