Organizational design is vital to make sure that a company is prepared for current and future challenges at all hierarchical levels. For the process to work, companies must choose the correct implementation structure, apply the right skills, and ensure that HR/L&D provides constant advising.
What Is Organizational Design?
Organizational design is the process of ensuring that an organization’s technical and human resource capabilities are coordinated so as to meet, if not exceed, strategic goals. Organizational design can be directed at current operations or to prepare for future needs. For HR and L&D professionals, organizational design requires their input at various stages to ensure that skill levels related to company requirements are in place at the right time.
Note that organizational design is not the same as organizational development. Organizational development is a method of continuous improvement across functions, including strategy. In comparison, organizational design is meant to specifically accommodate strategy
Why Is Organizational Design Important?
Organizational design is beneficial for the entire company. Here are some of the ways it assists leaders, employees, and HR/L&D staff members:
The process and outcomes of organizational design allow leaders to be prepared for any support or mentoring needs when changes occur, and for leaders themselves to engage in upskilling/reskilling efforts. When significant skill gaps are recognized, this may result in a shift in strategy in order to avoid risk. Organizational design also permits managers to include L&D programs in operational planning schedules.
Organizational design results in better engagement and satisfaction because employees are ready for new or different roles. A timely organizational design process also minimizes the impact of resistance from workers in the face of change, and speeds up the process of adoption throughout the hierarchy.
When L&D programs are initiated before the planned change occurs, projects are more likely to adhere to deadlines. This is in comparison to the common situation when skills enhancement is accomplished only after changes are initiated and L&D gaps are suddenly realized.
Decentralized vs. Centralized L&D Organizational Design
One area of organizational design that differs between companies is the use of either a decentralized or centralized L&D structure.
In a decentralized model, L&D planning and programming is the responsibility of the individual business units. Each department has dedicated L&D staff that works in conjunction with department managers to build programs specifically for the unit.
Some organizations use this structure because it allows a fast response to the department’s needs. Decentralized models also provide targeted training and a simpler budgeting process because it is linked directly to the business unit.
However, this structure can be inefficient on a company-wide basis. Learning resources are not shared and new L&D concepts might not be applied universally. There might not be enough employees to justify a program for only their department.
In comparison, a centralized model operates with L&D planning according to the strategic needs of the entire company. A properly managed centralized structure will include a survey of the requirements for each department, but will try to find as much common ground as possible. For example, if various business units desire a communications course, they can all take the same one. This maximizes the use of L&D resources, promotes some level of content standardization, and makes sure that programs support the strategic objectives as set out by the operational design process.
What Are the Functional Factors of Organizational Design?
The organizational design process affects many aspects of the company, including:
- Organizational culture
- Organizational capabilities and layout
- Processes and technology
- Skills and talent
HR/L&D is involved with each of these factors. For example, strategy can only proceed if employees have the necessary skills; changes to the organizational layout need the participation of HR; and new processes and technologies mean relevant L&D courses.
What Major Skills and Functions Are Part of Organizational Design?
At the simplest level, organizational design seeks to drive adaptations at various levels of a company in order to accommodate strategy. From the standpoint of HR, the main skills and functions related to this process are:
Change management – No company is always ready for strategic changes, but the principles of change management enable an organization to choose and initiate the programs that will optimize readiness.
Talent development – Once a strategic direction has been picked, its implementation depends on employees who have the right skills and character for the challenge. Identifying those employees is the objective of talent development.
Leadership – The cornerstone of any extensive project is good leadership. Communicating what needs to change and making sure that new processes are performed correctly depends on conscientious leaders at all levels.
Why Organizations Need GrowthSpace
Updating skills according to the results of an organizational design process takes time. For large companies, it can also be very complex. The GrowthSpace platform enables rapid implementation of L&D programs, according to the exact needs of employees, regardless of the size of the organization.