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4 practices that design tomorrow’s companies today

September 25, 2019

1. Anchoring to outcomes

It all starts with purpose and strategy. Good organization design is fundamentally tied to organizational outcomes and the strategies defined to achieve those outcomes. It’s not uncommon for organizations to undertake organization design projects in the middle of the process, developing a picture of the organization they think they want to build without clarity around what they’re trying to accomplish. These organizations often treat design as a one-off project managed through mostly linear waterfall approaches. However, high-performing organizations recognize the need for a more flexible, continuous approach that starts with the organization’s mission and purpose and cascades iteratively from there. These organizations understand how strategy is inextricably linked to all design and change efforts.

Strategic choices cascade iteratively1

Source: Bersin, Deloitte Consulting LLP, 2019 (based on Deloitte Monitor’s Strategic Choices Cascade).

2. Evaluating design efforts against outcomes

Our research reveals some telling tales about organizational strategy. Key among them is that high-performing organizations are more likely to measure how their design decisions impact the key performance indicators or drivers that precipitated changes. This result should not be surprising and is in line with management guru Pete Drucker’s famous line: “What gets measured gets managed.”4

Still, there is room for improvement. Only 29 percent of the high-performing organizations we surveyed report their company is “very frequently” or “always” evaluating changes against drivers when reinventing the enterprise or business units, and this number drops to less than 8 percent of low-performing organizations. For many business leaders, simply having a well-documented strategy and an understanding of “how” to measure success is a key enabler for organization design efforts.

High-performingorganizations evaluate how design decisions impact key performance indicators*

Source: Bersin, Deloitte Consulting LLP, 2019.

3. Communicating the “why”—broadly and often

Part of developing a strategy is communicating vision to the key stakeholders, business leaders, and employees across the organization. Purpose and the strategic decisions made to get there do not happen in a vacuum. If leaders want their people, processes, and technology to adapt, they need to keep communications about the organization’s strategy transparent and frequent.

High-performing organizations recognize that communication right from the strategy phase through execution is crucial to accelerating change and awareness. We found that just 54 percent of high-performing organizations, compared to just over 22 percent of low-performing organizations, state that they “very frequently” or “always” communicate the broad strategy when changes are made to enterprise or business units. For effective design projects, business leaders should ensure that a strategic communication plan is in place during major design efforts.

High-performing organizations communicate their broad strategy*

Source: Bersin, Deloitte Consulting LLP, 2019.

4. Designing for intended behavioral norms

An organization’s culture is both an input and an output. High-performing organizations recognize that major design efforts or structural changes will affect culture. Many leaders want teams and business units to collaborate and engage in faster decision-making processes. However, they often create hierarchal structures that hinder this and require complex reporting structures that involve running decisions up the chain of command.

Our data reveals that just over 48 percent of high-performing organizations “always” or “very frequently” consider the implications of culture when making changes at the enterprise or business unit levels. Only 16 percent of low-performing organizations do the same. When diving into an organization design project, business leaders need to understand the behavioral outcomes they desire and how their organizations’ structures can promote or hinder that culture from forming.

Organizations address needs related to culture*

Source: Bersin, Deloitte Consulting LLP, 2019.

Conclusion

High-performing organizations understand that successful organization design efforts start and end with strategy, anchoring to outcomes and evaluating progress often. As organizations no longer operate in a steady state, business leaders will continue to face disruptive landscapes in a world of unprecedented change. Those who choose to treat design as an ongoing practice will be better enabled to navigate the future of work.

Bersin members can learn more about our research findings and recommendations on advancing in organization design maturity by accessing the articlesSix Top Findings for Designing Tomorrow’s Companies Today and The Organization Design Maturity Model on the Bersin website. Bersin’s High-Impact Organization Design series will continue for Bersin members throughout the fall with upcoming articles that dive deeper into leadership, culture, and designing with data. If your organization has been innovating in the area of organization design, we’d love to hear from you! Contact David Mallon (dmallon@deloitte.com) and Timothy Davis (timotdavis@deloitte.com) to share your story.

David Mallon is vice president and chief analyst at Bersin™, Deloitte Consulting LLP.

Timothy Davisis a senior research analyst at Bersin™, Deloitte Consulting LLP.

1High-Impact Organization Design research, Bersin, Deloitte Consulting LLP, 2018.
2Six Top Findings for Designing Tomorrow’s Companies Today, Deloitte Consulting LLP / David Mallon and Timothy Davis, 2019.https://www2.deloitte.com/content/dam/insights/us/articles/5136_HC-Trends-2019/DI_HC-Trends-2019.pdf.
32019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Consulting LLP and Deloitte Insights, 2019, https://www2.deloitte.com/content/dam/insights/us/articles/5136_HC-Trends-2019/DI_HC-Trends-2019.pdf.
4The Interactive Workforce Transformation Framework, Bersin, Deloitte Consulting LLP / Kathi Enderes, PhD, and Mike Kemp, PhD, 2019, https://digital.bersin.com/article/interactive-workforce-transformation-framework-7784/.

Originally published at Capital H blog