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.
- Better employee satisfaction
- Better customer satisfaction
- Better financial performance
- Sustainable competitive advantage
- Significant return on investment
- Better strategy implementation
- Better human resources management
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.
John W. Young
Executive Vice President, Human Resources
Four Seasons Hotels and Resorts
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.
President & CEO
Gamma-Dynacare Medical Laboratories
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.
Keith P. Ambachtsheer
K.P.A. Advisory Services
Co-author, Pension Fund Excellence: Creating Value for Stakeholders
Optimizing 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.
Executive Vice President, Investments
Ontario Teachers’ Pension Plan
Optimizing 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.
President & CEO
LS Travel Retail North America
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.
Visa Canada Association
Optimizing 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.
- 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.
Vice President, Human Resources
Allstate Canada Group
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.