Putting in place an effective culture is something all businesses, regardless of size or sector, need to address, says co-founder of change consultancy Ignium, Kerry Jarred.
According to a report by software provider breatheHR, poor company culture is costing the UK economy £23.6bn a year.
We need to put culture into practice and for a business to develop an effective culture, they first need to look at their organisational design and ask whether it’s fit for purpose, for now, and also for the future.
Put simply, organisational design is the process, structure, and hierarchy business leaders need to put into place to create their desired culture in practice. Typically, this includes how the business communicates, how it develops its people, how it assesses performance, how people work together, how roles and responsibilities are structured, how reporting lines work, how work is allocated and even how people schedule and run meetings.
If carefully developed, a company culture will enable everyone in the business to do their job better. Culture will be significantly enhanced if the organisational design clarifies authority, responsibility, is aligned with the business strategy, and reinforces the values that are important to the organisation’s success.
Here are five key principles to keep in mind when evolving organisational design:
The past is not the future
Keeping the future state in mind is critical when looking to make changes. Reflect upon, and respect what has gone before, but don’t cling on to it as it may not be what the business needs going forward.
Plan with limitations in mind
Accepting the limitations of a business will help leaders to create a more sustainable organisation design. Leaders need to be realistic and recognise the constraints that are beyond the company’s control. Focus on what can be controlled and can be changed.
An organisation redesign isn’t about setting up a new structure in one go. It is a sequence of interventions which will lead a company into the future. Keep in mind that too many changes that occur simultaneously can cause negative effects - instead, pick three to four changes to deliver strong, positive results.
Ensure an optimal span of control for senior positions and focus on people’s strengths. Consider which skills (technical, managerial, leadership) and behaviours are key and make sure the company’s leaders are fully equipped and enabled to drive and manage the change effectively.
Empowering others, giving them accountability and encouraging a collaborative spirit within teams, forms the bedrock of a successful redesign process.
Don’t lose sight of the informal
Formal elements of organisational redesign, such as structure and information flow, are attractive to companies because they’re tangible and can be easily defined and measured.
Businesses, however, shouldn’t lose sight of the informal elements. That is the mindsets, values and behaviours that might not be as obvious but are of equal importance. They represent and influence the ways in which people think, feel, communicate and behave. When the intangibles are in sync with the tangible building blocks, the business is likely to optimise its potential for success.