The Next Evolution Of Organizational Design | FTI Consulting

The Next Evolution Of Organizational Design

Corporate Finance & Restructuring

August 14, 2020

Conference Room

Many leaders understand that having the right organizational design can enhance performance, agility and resilience; however, traditional approaches solely focused on spans and layers do little to address the work being performed and historically have delivered disappointing results.

Today, successful companies are beginning to look inside the boxes and into the “white spaces” between them to better understand the key interactions, activities and processes at a more granular level. This is “micro design” and it has proven to be the key to success.

Most business leaders rethink the design of their organizations as a cost-cutting solution — removing managers and increasing spans of control, only to rehire a year later. Often, this lack of faith in redesign arises from past efforts not delivering what was promised, or from doubting the prevailing abundance of principles, approaches and techniques.

Thus, organizational redesign exercises, in many situations, remain a lagging response to external events rather than a proactive endeavor, driven by the conviction of leadership and based on bedrock principles.

In an increasingly dynamic world, leaders acknowledge that organizational design remains a key lever to successfully navigate change and consistently deliver on performance. Yet reorganization implementations fail quite frequently. Why is that? A fundamental underlying reason is that implementing organization design is not just about drawing boxes and lines and moving people and positions inside comprehensive organization charts.

The redesign process needs to look beyond layers and spans of control to understand what’s inside a box: objectives, accountabilities, competencies, work activities performed, projects people are involved in, risks they manage and clients they serve.

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