Organisational Design Beyond the Org Chart
What organisational design means, and why structure is only one of several parts that must fit together.
12 min
Activities: 0 of 2
Many managers think organisational design means drawing a new organisation chart. They move boxes, change some reporting lines and announce the result. Six months later the old problems are still there. Decisions are still slow, two teams still do the same work, and customers still fall between departments.
This happens because the chart shows only one part of how an organisation works. Organisational design is the deliberate process of shaping the whole organisation so that it can deliver its strategy. It includes the structure, but it also includes how work flows, who decides what, how people are measured and rewarded, and what skills the roles need.
A useful working definition: organisational design is the choice and alignment of structure, processes, decision rights, roles, measures and people practices so that the organisation achieves its purpose. The key word is alignment. Each part must support the others.
Two well-known models of the parts that must fit
The Star Model is usually credited to the organisation design writer Jay Galbraith. It names five connected points:
- Strategy — where the organisation is going and how it will win.
- Structure — where power and authority sit, and how units are grouped.
- Processes — how information and decisions flow across the units.
- Rewards — how goals, measures and pay encourage the behaviour the strategy needs.
- People — the skills, selection and development the roles require.
The message is simple: change one point and the others must be checked.
Macro design and micro design
Organisational design works at two levels. Macro design decides the big shape: the main units, how they are grouped, and how the top of the organisation fits together. Micro design works inside a unit: the teams, the roles, the spans of control and the hand-offs between people.
Both matter. A sound macro design fails if the roles inside it overlap. Well-designed roles fail if they sit in the wrong unit. Most design projects start at the macro level and then move down, but a problem in one team can also be solved by micro design alone.
A short case: the new chart that changed nothing
Which statement best describes organisational design?