Organizational Design

An organization is the sum of all the processes of establishing relationships to determine the work to be done, to group them, to define the responsible authorities, and to ensure that people work together in the most effective way in achieving goals.  In short, an organization is the establishment of an authority relationship. Organizational design is a methodology that identifies non-functional aspects of workflow, procedures, structures, and systems, rearranging them to fit existing business goals, and then develop plans to implement new changes. As a result, it's directly related to human resources management.

Good organizational structure and design help improve communication, increase productivity, and inspire innovation. It creates an environment where people can work efficiently. Many of the productivity and performance issues can be attributed to poor organizational design.

 

Process Design

Companies have management and executive boards, committees, directorates, or directorships. These have a hierarchical structure. Those who are responsible are determined and grouped based on competence and experience. Under the supervision of these people, there are different title structures such as managers, experts, responsible, and senior experts. The organization becomes a structure that enables these processes to be carried out, improved, and measured against performance metrics. The company covers the design of organizational structures, roles, and responsibilities, competencies, and performance criteria. In order to ensure that this design is functional and sustainable, and then it develops further, managers should conduct a workforce optimization study. On the other hand, they must follow the process and constantly measure performance. 

          At the same time, the authorization model is included in the organization design. In other words, it involves determining the key activities and milestones and determining the decision points in these activities, that is, who should be the people to be involved in these activities.

          The design of an organization must be correct for it to function efficiently and effectively, and its structure and systems must be in line with core strategies. There are many benefits of having a design suitable for the business, its employees, and the environment in which it operates. For example;

  • Increasing productivity,
  • Faster and more effective decision making,
  • Improved quality of goods and services,
  • Higher profits,
  • Better customer relations,
  • Safer working conditions,
  • A happier, healthier, and more motivated workforce,
  • Better protection against future challenges,

However, if defects in design, an organization may encounter serious problems, including the following:

  • Inability to solve problems,
  • Wasted time and money,
  • Lack of coordination,
  • Inconsistent quality of work,
  • Legal discrepancies,
  • Reputation damage,
  • Low morale within the workforce, high staff turnover,
  • Missed enterprise targets.

          Even if a particular design has been successful in the past, that doesn't mean it will remain successful forever. As businesses evolve and the world around them changes, they must keep a close eye on the way they organize.

Characteristics of an Effective Organizational Structure

  1. Process management should be designed in line with long-term goals and corporate strategies. "We can't see our tomorrow, we don't know." can be very misleading to say. It should be determined where the company is targeted after 5 years. Determination should be a priority because corporate strategies can only achieve their purpose to the extent of the efficiency and effectiveness of the organization and processes that will bring them to life.
  2. Responsibilities should be clearly defined. While designing the process, it is very important that the owner of the process should be. Those responsible must be clearly identified on the basis of title. In some companies, the responsible persons are determined on the basis of the name (Jack, Rebecca, Ted, Lily, etc.) rather than title. When this X person leaves the job, the process manager is left unattended. For this reason, the process is delayed, and cannot walk. Titles are permanent, people are leaving. 
  3. It should be shared transparently with employees and their adoption should be ensured. After the process design is made and the responsible persons are determined, it must be shared with the employees transparently. Especially the people responsible for the process should know everything about the process. At the same time, the related department that will serve the people responsible for the process should also be aware of the process so that it can support the process. In some cases, employees may not be able to adopt or maintain their old habits. Therefore, mutual interviews should be held with human resources employees. In many companies, the process is designed but not announced to employees. The employee is unaware or the process design is announced, but the employee cannot internalize and disruptive aspects appear.
  4. Processes need to be constantly reviewed, improved, changed, and monitored. The process is a continuous and dynamic issue. After preparing the processes, you cannot use it in the same way for 5-10 years. Because the industry, the world, people, and trends are constantly changing. Continuous review of processes should usually be done by human resources, quality management systems, and department managers. Some improvements can be made in line with the feedback of employees. All of the changes that happen should be followed up. In the event that the ways of doing business change or are subject to revision, a flexible structure is required to be able to apply the changes immediately. The way of doing business may have changed. It is one of the important issues that a flexible structure must be present to transform and implement it immediately.
     
  5. Repetitive processes should be eliminated. A process can be carried out by more than one person, but this is not the case. When those responsible are clearly identified, repetitive processes will disappear.
     
  6.  No or little value-added businesses should be minimized as much as possible, so that more time can be devoted to more value-added activities that can drive the company forward and drive it towards its goals.

Designing an Organization

  1. Corporate strategies should be determined.
    • Long-term company goals should be determined.
    • The sales channels of the target countries should be determined. (“Will there be a change in 5-10 years or will it continue in the same way?” The question should be answered.) It is not enough just to determine the targets of the companies. It is required to be regularly followed up by the process owners. If the corporate strategy is determined, an accurate organizational design and process management are achieved.
       
  2. Best practices should be followed closely.
    • The sector and competitors should be followed.
    • The best / most common practices in the industry and beyond should be followed. At this point, competitor analysis is of great importance. We recommend companies do competitor analysis. All departments such as human resources, IT, and supply chain must examine their competitors from their own perspective. The inspection should be done at least once a year.
    • We see many good practices in terms of digitization. It is also necessary to provide digital follow-up. New structures such as “digital experts” related to digitalization in organizations and processes can be included.
        
  3. Internal competencies and dynamics should be well understood.
    • People should be closely known, known, and spoken to.
    • It is necessary to have information about the history and culture of the institution.
    • An organization should be designed according to merit.
       
  4. An attractive structure should be designed.
    • A motivating and attractive structure should be designed for both employees and potential candidates. Candidates should be drawn to the institution.
       
  5. Strong brand ambassadors should be created. 
  • Employees are brand ambassadors. Potential candidates who tried to attract the company are also brand ambassadors. If the brand is praised and better explained outside the company, the embassy duty is performed. Institutions cannot make progress by solely depending on outside brand ambassadors. Strong brand ambassadors should be created within the company. 

      6.Performance should be monitored continuously and actions should be taken regarding the failing aspects.

  • Performance measurement should be made with individual performance management.
  • Career and development programs should be associated with performance.
  1. Change management should be provided. 
  • It is important to ensure that it is adopted, accepted and continuously implemented and developed within the company. It is very difficult to bring it to life with direction and designs from above. Structures such as quality assurance systems, human resources, department managers and senior management should deal with change management. Senior management should stay on track, support and sponsor.