Preparing Your Organization for the Future

Are You Ready?

The Situation

Your business is always changing. Your firm will move through periods of high growth and will have to be prepared to scale. Client needs and your firm’s capabilities change, resulting in new revenue streams with different support models. Sometimes your business needs to improve efficiency in order to service revenue. In every situation the individual selected to perform a function needs to have the style, capabilities and desire to be successful in that role. This point of view discussion shares insights and expert opinions on how to approach this process.

Does every organization have to change?
At some point, the answer is likely yes. Small organizations who become successful need to prepare for the future. Small high growth organizations need to evolve from the hero model to a model where the team is designed to scale more easily for growth. Larger more mature organizations can become bloated or inefficient. Organizational inertia makes it difficult to change, but change has to be evaluated when the business sees new market opportunities appear, the firm experiences high growth in existing lines of business or crisis occurs. Change can be uncomfortable, but it is critical to your team’s success. If organizations want to achieve their strategic objectives, they need to design their team structure accordingly.

  • Author Elyxor, Inc - Strategy Practice
  • Released 1.3.2016
  • Category Organizational Re-design
  • Client Software and Services (large and small)

Ideas for an Approach

Start by confirming who you are and what you want to be.
Your team has to know who they are and where they want to arrive. Form has to follow function when designing your new structure. When Elyxor works with client teams we use the appropriate frameworks to capture or define the core values, strategy of the business, and the corresponding short, medium & long term targets. Once targets are defined, those need to inform the organizational design and strategy.

How do I think about designing the right structure?
Use frameworks to understand what functions require autonomy, creativity and flexibility versus functions that benefit from centralization and control. Build out your functions across this spectrum, thinking about the required services not team structure.

Frameworks help organize thinking and make the process more objective, reducing emotion. When Elyxor helps clients, we chose the right framework to coordinate these work sessions based on where you are in your process. Not every framework is used every time. Elyxor uses the required tool based on the situation. Common frameworks we use are described below.

  • Elyxor leans on proven frameworks from industry leaders such as Porter, Osterwalder, Wickman and others to clarify the vision, strategy and business design.
  • Organization design frameworks leverage concepts from Wickman, Sisney and others.
  • Putting your new organization into action leverages concepts from Wickman, 4DX (from Covey, McChesney and Huling) and “Speed of Trust” from Stephen M. R. Covey.

After there is clarity to the functions, you need to define the required natural style and capabilities for the role. If desired, Elyxor works with your team and helps you assess your team for these positions. Then we recommend using some tools to check your designs. These metrics may differ for small high growth firms versus large mature firms.

  • In mature businesses, metrics such as scope/span, revenue per associate or others may be used to uncover pockets of inefficiency. In these situations, the goal is often how to get managers closer to the work, accelerating pace in the organization and eliminating waste.
  • In small firms this is usually not the issue, it is more about how to build the organization to scale and changing the culture of consolidated knowledge and control which may be causing bottlenecks.

How do I ensure I realize benefits from the new organization?
The right design is not enough. Metrics and behaviors have to change so the new organization can function correctly in its new structure. After the organizational design is drafted, Elyxor can work with your team to operationalize this structure. We do this by helping you define measures to focus your new organization as well as establishing a management cadence to advance toward your goals.

Conclusion

The correct organizational design is important whether the organization is big or small. Elyxor has learned that frameworks, metrics and tools can aid in the process, but they must also be complemented by pragmatic insights. When determining the right team for large organizations, use the various metrics as guidelines. Use insight regarding your team to discern when to take cost out and when to ensure core capabilities and talent must remain to support your business as it grows. As small organizations grow, they don’t want to lose that small team culture, but use the organizational re-design process to install better disciplines now when the business is still small and new processes can be more easily institutionalized. This is harder later when the growth comes.

Make sure your team has the styles, skills and desire to be successful in their new roles. A mismatch in the person and role impairs your business and makes the individual unsuccessful and unhappy. Be transparent about this process with your teams. Explain the intent of the process and update them as your progress. This is uncomfortable, but critical.