15 Nov Five Signs Your Organizational Model Needs to Be Fixed
All too often, companies let their organizations be shaped organically rather than shaping them intentionally through conscious decisions and careful planning. Unintentional organizational models morph over time, decreasing productivity by slowing down decision making, choking communication and collaboration, and preventing companies from being flexible enough to seize new opportunities. Here are five signs your organization needs to be fixed, along with a few tips to course correct.
Outdated organizational charts
Old org charts that aren’t tied to contemporary business objectives can lead people to wonder who’s in charge of what and who reports to whom. Focus on a department that’s changing rapidly, or a team that’s underperforming. Remove all names from that department’s organizational chart, then think about the roles and reporting hierarchy as if you were creating your org chart from scratch.
Structures are built around specific individuals, rather than specific roles
Many times, as organizations grow, individuals take on more work, or wear multiple different hats. That’s fine in a 5- or 10-person company, but once the organization grows beyond 25 or more, that leads to huge inefficiencies. Start by outlining job requirements for what the company needs in that role now, then see how your current employees fit into those roles.
Unclear performance metrics and accountability procedures
When people don’t understand how their work output is measured or what success looks like, that can lead to a disconnect between expectations and outcomes. To course correct, start with your business strategy and the metrics you’re using to measure the business results you want to achieve, then break them down into metrics that are relevant to each department and team. As much as possible, push accountability for specific metrics down to the lowest level in the organization, considering individual skills, experience, and behavior.
Disconnect between organizational model and incentives
Leaders first need to take a step back and look at their model. Then, design a set of incentives that align with your business strategy, and reward the behaviors that directly – and positively – impact your desired business results. Make sure incentives are consistent across the organization, and that individuals have the autonomy and span of control necessary to deliver the expected high performance.
Disconnect between strategy and culture
All organizations should focus on the highest priority values, and foster them one at a time; use incentives and role modeling to spotlight and reward those critical behaviors. If you’re a high-growth startup prioritizing innovation and speed, structure your organization to be flat, with cross-functional teams, and build a culture that rewards risk-taking and rapid decision-making.
As your company grows or your business environment changes, look again at your organizational model. Does it still support the business strategy? Ensuring that your organization design is deliberate and up-to-date will help you reach the stars.
Business Results works with organizations to help them understand how to align their business strategy with their people strategy. Contact us today!