Although adaptable to the size, complexity and needs of any organization, the design process consists of the following steps. As senior leaders, you come together to discuss current business results, organizational health, environmental demands, etc. At times, senior teams may go through either a strategic planning process or an executive team development process prior to beginning a redesign initiative, depending on how clear they are about their strategy and how well they work together as a team.
Using our Transformation Model , we facilitate a comprehensive assessment of your organization to understand how it functions, its strengths and weaknesses, and alignment to your core ideology and business strategy. At some point the design process morphs into transition planning as critical implementation dates are set and specific, concrete action plans created to implement the new design. And a key part of this step includes communicating progress to other members of the organization.
A communications plan is developed that educates people in what is happening. Now the task is to make the design live. People are organized into natural work groups which receive training in the new design, team skills and start-up team building. New work roles are learned and new relationships within and without the unit are established.
Equipment and facilities are rearranged. Reward systems, performance systems, information sharing, decision-making and management systems are changed and adjusted. Some of this can be accomplished quickly. Some may require more detail and be implemented over a longer period of time. A few years back we worked with a company within the aluminum industry. The company recognized they were becoming bureaucratic and unresponsive to their customers needs.
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Following a period of assessment of the strengths and weaknesses of the existing organization, they went through a process of organizational redesign in which they organized their front office functions to become more collaborative and customer focused. The diagrams below illustrate, at a high level, this change. Pre-design Workflow. Post-design Workflow. The first chart illustrates the tendency of most people within organizations to think in terms of silos and organize people according to the similarity of their functions.
The second chart illustrates how the company redefined structural boundaries to become much more cross-functional on the front end of their business. They combined people from a number from a number of departments into teams that took full responsibility for managing customer orders.
Of course, this chart greatly simplifies all of the design decisions which included improvements in workflow and system support, and the role of leaders and other support functions in the new organization. But this gives you an idea of the kinds of integration and improved collaboration that can result from organizational design.
The good news is that it can be used in most any type and size of business. The length of time required to complete a redesign varies depending on the nature, size and resources of the organization. Large and complex redesign projects can be completed within several days. Smaller organizations require much less time and fewer resources. We are experts in strategy and organizational design. Call or email us for a no-obligation conversation to answer a question regarding your company or to explore bringing our services in-house.
I have gone through your article on how to design and redesign organization. It is really interesting to add my knowledge on how to design orgaizations.
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Kindly please i have my article which we have gone through the re-design process in our department however, we would like your advice if we have followed the correct direction and how we can integrate your model or can it be anyway to share my article with you. Thank you. I see your methodology as a comprehensive model in which everything has a logical sequence and inclusive approach for people of the organization.
I am planning to use it in a re-design of a distribution company. Do you have a detailed list of to-do activities under the seven step model? Or perhaps a questionnaire guide to cover all phases.? Very interesting read. If yes, what would be your guidance around this? Process of Org. Otherwise, the design will be questioned.
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The costs are high when change efforts go wrong—not only financially but in confusion, lost opportunity, wasted resources, and diminished morale. When employees who have endured real upheaval and put in significant extra hours for an initiative that was announced with great fanfare see it simply fizzle out, cynicism sets in. Our experience with organizational change management suggests that there are three major hurdles to overcome. A full 65 percent of respondents to the Katzenbach Center survey reported this as a problem. The change initiatives they suffered through may have been poorly thought through, rolled out too fast, or put in place without sufficient preparation.
Change initiatives also flounder, according to 48 percent of the respondents, because companies lack the skills to ensure that change can be sustained over time. Leaders might set out eagerly to raise product quality, but when production schedules slow and the pipeline starts looking sparse, they lose heart. Lacking an effective way to deal with production line problems, they decide their targets were unrealistic, they blame the production technology, or they accuse their frontline people of not being up to the task. The third major obstacle is that transformation efforts are typically decided upon, planned, and implemented in the C-suite, with little input from those at lower levels.
This filters out information that could be helpful in designing the initiative while also limiting opportunities to get frontline ownership of the change. The following list of 10 guiding principles for change can help executives navigate the treacherous shoals of transformation in a systematic way. Lead with the culture. Yet change leaders often fail to address culture—in terms of either overcoming cultural resistance or making the most of cultural support.
Among respondents whose companies were unable to sustain change over time, a startling 76 percent reported that executives failed to take account of the existing culture when designing the transformation effort. Or they get so focused on structural details—reporting lines, decision rights, and formal processes—that they forget that human beings with strong emotional connections to the culture will be enacting these changes. Instead of trying to change the culture itself, they draw emotional energy from it. They tap into the way people already think, behave, work, and feel to provide a boost to the change initiative.
To use this emotional energy, leaders must look for the elements of the culture that are aligned to the change, bring them to the foreground, and attract the attention of the people who will be affected by the change. In two healthcare companies undergoing a merger, culture led the post-deal integration.
It quickly became clear that where one company had a culture attuned to bottom-line results, the other tended to focus on process. Optimally, the new company would need to skillfully use processes to deliver clear results. Start at the top. Rather, work must be done in advance to ensure that everyone agrees about the case for the change and the particulars for implementing it. A clinical research firm was committed to tripling its size over the next decade to achieve a more competitive position.
Because the company was still pretty much operating as a startup after 25 years, this required a far-reaching organizational redesign. Before starting the design phase, finance leaders gathered at an off-site meeting to begin a rigorous exercise in alignment. Instead, they mostly operated as lone rangers, in characteristic startup style. Each of the executives in the group made a thoughtful individual presentation about the case for change. Most of them agreed on the general direction the company needed to take to achieve rapid growth.
But their descriptions of how to move in that direction—for example, what the first concrete steps should be—were all over the map. They were then tasked to work together to develop a case for change that every one of them could support. To hammer out these agreements, these top executives had to listen closely to their colleagues and weigh conflicting points of view. The exercise was demanding, but they began to coalesce around a coherent vision for what the company should look like in 10 years.
Most importantly, the experience of working together so intensely led the executives, for once, to act as a collaborative and committed team. By the end of the off-site meeting, they found that they were all using the same language to describe what the company needed to do. As one participant noted, the experience had transformed him , which in turn gave him confidence that together they could cascade the plan to other groups at other levels of the hierarchy. Involve every layer. Strategic planners often fail to take into account the extent to which midlevel and frontline people can make or break a change initiative.
The path of rolling out change is immeasurably smoother if these people are tapped early for input on issues that will affect their jobs. Frontline people tend to be rich repositories of knowledge about where potential glitches may occur, what technical and logistical issues need to be addressed, and how customers may react to changes. In addition, their full-hearted engagement can smooth the way for complex change initiatives, whereas their resistance will make implementation an ongoing challenge. Planners who resist early engagement at multiple levels of the hierarchy often do so because they believe that the process will be more efficient if fewer people are involved in planning.
But although it may take longer in the beginning, ensuring broad involvement saves untold headaches later on. IBM recognized the need for such an approach in , when rolling out a new initiative on culture. The leadership team had met intensively to develop clear definitions of the cultural traits the organization would require going forward.
Make the rational and emotional case together. It is therefore essential to the study of any economic activity. Incentives, whether they are intrinsic or extrinsic traditional , can be effective in encouraging behavior change, such as ceasing to smoke, doing more exercise, complying with tax laws or increasing public good contributions In some instances, inequity aversion is disadvantageous, as people are willing to forego a gain in order to prevent another person from receiving a superior reward. Inequity aversion has been studied through In social psychology, the term inertia is sometimes also Information avoidance Information avoidance in behavioral economics Golman et al.
Active information avoidance includes physical avoidance, inattention, the biased interpretation of information see also confirmation bias and even some forms of forgetting. In behavioral finance, for example, research has shown that Intertemporal choice Intertemporal choice is an area of research concerned with the relative value people assign to payoffs at different points in time. It generally finds that people are biased towards the present see present bias and tend to discount the future see time discounting. Less-is-better effect When objects are evaluated separately rather than jointly, decision makers focus less on attributes that are important and are influenced more by attributes that are easy to evaluate.
The less-is-better effect suggests a preference reversal when objects are considered together instead of separately.
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One study presented participants with two dinner set options. Option A included The effect of licencing has been studied for different behavioral outcomes, including donations, cooperation, racial discrimination, and cheating Blanken et al. It is thought that the pain of losing is psychologically about twice as powerful as the pleasure of gaining.
People are more willing to take risks or behave dishonestly; e. Mental accounting Mental accounting is a concept associated with the work of Richard Thaler see Thaler, , for a summary. According to Thaler, people think of value in relative rather than absolute terms. In addition, Mindless eating The expression "mindless eating" has been coined by the eating behavior expert Brian Wansink. It refers to the finding that various cues associated with food non-consciously affect the amount and quality of people's consumption.
Cues often serve as benchmarks in the environment. Cues may include serving containers, packaging, people, labels and atmospheric factors. They suggest Myopic loss aversion Myopic loss aversion occurs when investors take a view of their investments that is strongly focused on the short term, leading them to react too negatively to recent losses, which may be at the expense of long-term benefits Thaler et al. This phenomenon is influenced by narrow framing, which is the result of investors Naive allocation Decision researchers have found that people prefer to spread limited resources evenly across a set of possibilities.
This can be referred as naive allocation. For example, consumers may invest equal amounts of money across different investment options. Similarly, the diversification bias shows that consumers like to spread out consumption choices across a variety of goods Nudge According to Thaler and Sunstein , p. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Optimism bias People tend to overestimate the probability of positive events and underestimate the probability of negative events happening to them in the future Sharot, For example, we may underestimate our risk of getting cancer and overestimate our future success on the job market.
A number of factors can explain unrealistic optimism, including perceived control and It is frequently measured by having experimental participants answer general knowledge test questions. They are then asked to rate how confident they are in their answers on a scale.
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Overconfidence is Overjustification effect This effect occurs when a person's intrinsic interest in a previously unrewarded activity is decreased as a result of engaging in that activity as a means to an extrinsic goal e. Deci, E. A meta-analytic review of experiments examining the Pain of paying People don't like to spend money.
We experience pain of paying Zellermayer, , because we are loss averse. This pain is thought to be reduced in credit card purchases, because plastic is less tangible than Partitioning The rate of consumption can be decreased by physically partitioning resources into smaller units, for example cookies wrapped individually or money divided into several envelopes. When a resource is divided into smaller units e. In addition to the Peak-end rule According to the peak-end rule, our memory of past experience pleasant or unpleasant does not correspond to an average level of positive or negative feelings but to the most extreme point and the end of the episode Kahneman, b.
The rule developed from the finding that evaluations of a past episode seem to be determined Precommitment Humans need a continuous and consistent self-image Cialdini, In an effort to align future behavior, being consistent is best achieved by making a commitment. Thus, precommitting to a goal is one of the most frequently applied behavioral devices to achieve positive change.
Committing to a specific future action e. Preference In economics, preferences are evident in theoretically optimal choices or real behavioral choices when people decide between alternatives.
Preferences also imply an ordering of different options in terms of expected levels of happiness, gratification, utility, etc. Arrow, Preferences are sometimes elicited in survey research, which may be associated with a range of problems, such Preference reversals contradict the predictions of rational choice. Lichtenstein, S. Priming Conceptual Conceptual priming is a technique and process applied in psychology that engages people in a task or exposes them to stimuli.
The prime consists of meanings e. For example, one study Myopic Procrastination People often put off decisions, which may be due to self-control problems leading to present bias , inertia, or the complexity of decision making see choice overload. Various nudge tools, such as precommitment, can be used to help individuals overcome procrastination. Choice architects can also help by providing a limited time window for action see scarcity Both transient preferences in the short-term e.
For example, people may overestimate the positive impact Prospect theory Prospect theory is a behavioral model that shows how people decide between alternatives that involve risk and uncertainty e. It demonstrates that people think in terms of expected utility relative to a reference point e. Prospect theory was developed by framing risky choices Ratio bias The concept of ratio bias is rooted in our difficulties in dealing with proportions or ratios as opposed to absolute numbers.
For example, when asked to evaluate two movie rental plans with a contracted scale e. It is usually positive e.