5 keys to bear in mind when designing an effective organizational structure
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5 keys to bear in mind when designing an effective organizational structure. Enter a world where a single startup wields the potential to rapidly revolutionize an entire industry. Netflix, in under ten years, disrupted the home entertainment market and toppled established titans. Similarly, Airbnb and Lyft forever transformed how we travel and commute.
With technology rapidly progressing, and the maturation of artificial intelligence and big data analytics, we are on the cusp of another significant era of disruption across all sectors. This promises to bring even greater automation and convenience to our daily lives.
To differentiate itself from the competition, an organization must make flexibility a priority and embrace innovative team structures. Competent leaders recognize this and prioritize the formation of teams based on specific skill sets. These teams are well-positioned to create vital roles, leverage human talent, and rapidly respond to shifts in the market.
Here are five key factors for building adaptable and scalable organizational structures, along with a new framework for assessing technological capabilities. Please refer to the Principles for Designing a Successful Organizational Structure listed below:
1. Focus on improving and making use of your existing skill sets
As the eminent founder of Western philosophy, Socrates once advised, “Know thyself.” This wisdom remains crucial when embarking on the challenging task of revitalizing your organization. To start, it is imperative to confront obstacles head-on by determining your company’s distinctive identity and its role in the competitive landscape.
Next, analyze how your organization’s strengths can be utilized in the rapidly evolving world. Armed with this insight, you can fashion a team structure that caters to your specific company needs and capabilities, rather than mimicking other organizations.
Since your team structure is tailored to your company’s unique requirements, it will likely not resemble that of other organizations.
However, this is an advantage because it allows you to craft a team that optimizes your company’s strengths. For example, one organization may arrange teams based on experience rather than product features, while another might benefit from DevOps teams combining IT and development teams to automate infrastructure.
Alternatively, some organizations may prefer small, cross-functional teams that can efficiently accomplish short-term projects and objectives. Regardless of your preference, your technology team should be designed to maximize your company’s strengths while also being agile enough to attain strategic goals rapidly and effectively.
2. Embrace novel team frameworks and surpass the boundaries set by conventional organizational charts
All existence is based on the fundamental process of change.
While it is important to leverage your strengths, it is equally important to avoid becoming stagnant. An effective way to accomplish this is to examine how your company’s strengths influence employee behavior and workflow. It is also essential to identify areas of your current organizational structure that do not align with your business goals and objectives.
To determine if your organization is capable of adopting a design-focused approach that promotes decision-making throughout all levels of the company, Les Sisney, author of “Organizational Physics: The Science of Growing a Business,” recommends considering the following questions:
- Are our vision and strategy in line with the evolving world? If not, what adjustments should we consider making?
- Do we have sufficient checks and balances in place within our current functional structure? Is there an over-reliance on a dominant personality? Are there any crucial functions missing, which are essential for achieving both short-term objectives and long-term growth? If that is the case, what areas should we focus on for making necessary modifications?
By extending beyond the traditional organizational structure, a notable benefit is the capacity to distribute decision-making authority across the entire organization. This grants teams the ability to both generate and implement ideas, a critical aspect for agile teams.
Additionally, this approach is indispensable for maintaining a high degree of employee engagement over an extended period.
3. Understand your responsibilities
Establishing a company is comparable to making a cake, where the precise balance of all the components is crucial.
Establishing, training, and releasing talent can result in significant expenses. To prevent unnecessary costs, it’s recommended that organizations establish their organizational design before expanding their team. This involves defining how new roles will affect the organization.
However, defining technical roles can be a difficult task for many organizations. This responsibility typically falls under the jurisdiction of Human Resources (HR). However, HR departments may struggle to keep up with ever-evolving technology and business demands, causing frustration within the organization.
To tackle this problem, Pluralsight IQ offers leaders a solution to define technical roles and enhance their teams’ skills. Leaders can utilize skill assessments to evaluate their team’s expertise and identify the abilities required for success in specific roles.
Equipped with this knowledge, leaders can form teams that will have a significant impact on the organization and effectively address business challenges. This process can assist organizations in avoiding expensive errors in talent acquisition and retention while providing clarity on technical roles that HR departments may have difficulty defining in a rapidly changing technological landscape.
4. Exhibit exceptional proficiency in fulfilling your duties
The importance of individuals does not solely lie in their mere presence, but in having the appropriate individuals who are well-suited for the given task.
Defining roles that align with business objectives is crucial for organizational success, not just in technical positions but across all functions. To empower individuals to thrive in their roles, it’s essential to provide them with the necessary resources and support to develop their skills and meet their responsibilities.
By prioritizing roles and responsibilities, a culture of excellence can be fostered, where everyone works collaboratively towards shared goals. Equally important is investing in ongoing development at all levels of the team, with resources and training to support continued growth as innovative thinkers and skilled practitioners.
When designing roles, maximizing the strengths and potential of each team member, including leaders and other professionals, is vital. This approach enables the creation of a highly skilled and motivated team that’s effective in achieving business objectives. By strategically placing team members in projects where they can have the greatest impact, employees’ strengths can be leveraged for maximum benefit.
Following Elon Musk’s philosophy, teams should have the right balance of skills and expertise required for success. Identifying areas where teams and individuals need to grow and providing targeted development opportunities can foster employee growth and position the company for continued success.
Finally, ensuring leaders have a manageable team size enables them to focus on maximizing each team member’s potential, driving the organization towards success.
5. Promote the creation of an environment that prioritizes learning
I am currently in the pursuit of acquiring knowledge.
To foster a culture of continuous learning, it’s crucial to integrate learning opportunities into the daily routine. With only 34% of U.S. employees engaged at work and half of them finding fulfillment in their roles, organizations have significant room for improvement. However, consistent and incremental efforts can make a significant difference.
Companies that prioritize professional development and offer adaptable training programs tailored to their business needs are the most effective at maintaining their teams’ peak performance and proficiency. Fortunately, there are various training options available today that go beyond traditional methods like week-long off-site sessions and conferences.
Organizations can provide online resources that enhance employees’ technology expertise, align learning with business objectives, and close skill gaps in critical areas such as cloud computing, mobile technology, security, and data analytics. Additionally, companies can offer technical certifications as employee benefits to help staff keep their skills current.
Investing in employee training is a proven way to boost engagement, improve retention, and prepare for the digital era. It’s more cost-effective than hiring new employees, as highlighted in “The Real Cost of Hiring and Turnover.” Employee learning investment leads to higher job satisfaction and loyalty, resulting in improved retention.
A strong training program increases engagement and profits for the business. By providing opportunities for employees to use and enhance their skills to contribute to company goals, they become more invested in their work.
This leads to higher job satisfaction and employee retention, crucial for the long-term success of any organization. Skilled and happy employees are more likely to stay with a company, contribute to its growth, and help maintain a positive culture.
Every profession is impacted by disruption
The turnover rate among companies on the Fortune 500 roster has hit a new record, as only 12 percent of the original 1955 list still hold their position. Furthermore, 94 percent of listed firms expect to experience more upheaval in the next half-decade than they have in the last 50 years. It’s worth noting that some of the entities presently listed did not exist 15 years ago, and it’s conceivable that your current employer is among them.
Irrespective of your organization’s status, whether it is an established Fortune 500 company, aspiring to become one, or measuring success by other means, one thing is certain: change is unavoidable. In today’s swiftly changing landscape, businesses must be prepared to adapt in order to thrive.
Nowadays, all sorts of businesses are affected by the constant and swift progression of innovation
Dealing with organizational design during major changes can be a complicated undertaking, and though there’s no one-size-fits-all solution, skillful management can avert disorder.
Technology executives who foster an open-minded culture and adopt innovative strategies can not just sustain their company’s competitiveness but also lead the path forward. However, the success of this model hinges on prioritizing the well-being of employees.