Improving Company Infrastructure Through Optimizing Organization Design®

1. Optimizing Organization Design Can Improve Alignment Of Positions

The combination of vertical and functional alignment of positions is the organization structure. This is the spine of your organization and any misalignment will reduce the effectiveness of other factors. This also becomes the foundation for manager – direct report alignment, which is critical to organization performance.

Improve The Vertical Alignment Of Positions

Determine the appropriate number of layers or strata and place every position in the correct layer or stratum. We use a research based approach called time span analysis. With this approach, we can eliminate unnecessary positions and add missing positions to increase effectiveness and cost efficiency.

Improve The Functional Alignment Of Positions

Start with the strategy and determine the relative importance of dimensions such as customer / market, product / service, function and geography. The most important becomes the primary way of organizing, and one or more other dimensions become important for cross functional relationships.

Improve Manager – Direct Report Alignment

Every employee should have a manager exactly one level or stratum above in terms of complexity of work done and capability to work at that level. Our research shows that this is the single most important organization design factor. Ironically, our benchmarking database of over 59,000 manager – direct report relationships shows that it is sub optimal nearly 50% of the time. While this is a colossal waste of human resources, it is a significant opportunity for improvement.

Improve Employee Relationships With Managers

This is usually one of the most significant factors on employee satisfaction surveys. Research has shown it to be directly related to customer satisfaction and financial performance. Optimizing Organization Design, and particularly the manager – direct report alignment, provide the fundamental underpinnings for improving these relationships.

Improve Span Of Control
(Number Of Direct Reports Of A Manager)

Our approach begins with understanding the nature of work and then determining the optimal span of control for each situation. This is fundamental to developing spans of control that are appropriate for each manager.

2. Optimizing Organization Design Can Improve Alignment of Accountabilities and Authorities

Clarify Employee, Supervisor, Manager And Manager Once Removed Accountabilities And Authorities

These are key position types in an organization. There is often a lack of clarity of accountabilities and authorities as well as a lack of consistency. Greater consistency of managerial practices and a better foundation for managerial leadership training will help reduce the confusion, conflict and rework that results from lack of clarity and consistency.

Clarify Cross Functional Accountabilities And Authorities

Most organizations complain about having “silos” and not working effectively across the organization. However, virtually none have appropriate cross functional accountabilities and authorities, which are a key solution to silos. The starting points for success are the appropriate vertical and functional alignment of positions, as well as employee and managerial accountabilities and authorities. One can then overlay the cross functional accountabilities and authorities to significantly improve work across the organization.

Develop A Better Alternative To “Matrix Organization”

People in most organizations complain that their matrix “doesn’t work”. It is often seen as some “solid lines and dotted lines” that don’t provide the necessary clarity. Our approach provides a better alternative. It starts with a strong foundation of position alignment as well as clarity of employee and managerial accountabilities and authorities. It creates the important role of a cross over point manager. It specifies that each employee can have only one manager, but can have multiple cross functional relationships. As well, it provides a clear set of cross functional accountabilities with real authorities to go with them.

3. Optimizing Organization Design Can Improve Alignment of People

Better Match People To Positions

Just as time span analysis can be used to determine how many layers or strata an organization should have, we have a research based method (information processing capability) that can be used to determine at which level or stratum an individual can work. This reduces situations in which individuals are working below their capability or promoted beyond their capability (Peter Principle). Combined with our measures of skilled knowledge and application, this can provide better outcomes for both employees and their organizations.

Develop Stronger Talent Management

While matching people to positions is an initial requirement, our approach can lead to much broader talent management improvements. These would include recruiting, performance management, retention, satisfaction, job evaluation, career progression, succession planning, compensation and managerial leadership training. It can provide the foundation for a comprehensive and integrated human resources management system.

4. Optimizing Organization Design Can Improve Alignment of Deliverables

Develop A Stronger Organization Planning And Review System

Most organizations have several systems that are not properly integrated. These include strategic planning, business planning and performance management systems. We have developed a method for integrating these into one powerful organizational development and review system. It helps to ensure that all employees are assigned the right work and are doing it in an integrated way. The goal is to align all efforts and move the organization towards successfully delivering its strategies and business plans.

Better Align Deliverables To Positions

Higher level positions should be doing more complex work. We often find that employees are doing work below their stratum and pay level. This is a waste of money and can be the reason why important work is not getting done. Determine the complexity of the deliverables and ensure that they are appropriate. As well, ensure that they are delivering the outcomes that are expected.

5. Optimizing Organization Design Can Improve Alignment Of Tasks

Better Align Tasks To Positions

We have developed a method to measure the complexity of tasks and determine which tasks should be done at which levels in an organization. Our research shows that professionals spend about 50% of their time doing work that someone at a lower level could be paid less money to do just as well. Our research also shows that the potential average annual cost savings are $10,951 per professional position. Not only do organizations lose out on these cost savings, but they also suffer from reduced levels of employee satisfaction.