Adapt and Adjust: The Importance of Organizational Design

I once asked my grandmother, who was born in 1929, to share with me all the major changes she had seen in her lifetime. As you can imagine, the list was quite long, especially in the areas of technological and medical advances. When I expressed amazement, Grandma just shrugged it off. Her reaction: “The world is constantly changing. You just have to adapt and adjust.”

I received a lot of great advice from my grandmother over the years, but this might be the most universally true statement she ever made to me.

Organizational Design: Embracing Adaptation and Adjustment

Since the beginning of the pandemic, the nonprofit sector has experienced change at a significant pace. Practices in leadership, service delivery, resource development, and operations have been re-evaluated and new strategies defined to enable organizations to be better, stronger, and faster. The challenge, however, comes when determining how to operationalize these new strategies, which often requires re-tooling the workforce, building new systems and processes, and adjusting cultural norms.

Collectively, we refer to this as organizational design.

Experts James March and Herbert Simon define organizations as “systems of coordinated action among individuals and groups whose preferences, information, interests, or knowledge differ.” Sounds simple enough, right? In reality, “coordinated action” can be quite complex, akin to the phrase “herding cats.” And what happens when the direction changes? How does the organization adapt and adjust?

Achieving Effective Organizational Design

Often, an organization’s design evolves organically. While this is not all bad, the evolution may not take all pertinent factors into consideration. Organizational design is much more than an organizational chart. The most effective organizational designs start with business strategy and priorities and then seeks to answer the following questions:

• What are the key activities and critical tasks that need to be accomplished to achieve the desired outcomes? What activities are no longer relevant?
• Does the organizational structure enable the execution of these critical tasks? What systems, policies, and practices support the structure?
• What skills, characteristics, demographics, and interests must be present in the organization’s people (staff, board, volunteers, or otherwise) to accomplish the desired results?
• What values, behaviors, and working norms make up the organization’s culture? Do these need to change to accomplish the goals?

An effective organizational design also evaluates each of these components in the context of the others to assess alignment. Specific examples of potential misalignment might include:

• A highly-coveted skill set is not readily available in the current market yet recruiting/hiring practices prohibit employees from working remotely.
• The business strategy promotes innovation and creativity from the staff, but reward and recognition processes are centered around tenure.
• The organization is structured geographically with key functions replicated in each region, yet there is no established communications mechanism between like functions across regions.

As my grandmother said, “The world is constantly changing.” So, when does it make sense to adapt and adjust your organization’s design?

The Right Time to Adapt and Adjust your Organization's Design

At a minimum, it is prudent to review your organizational design as part of the operationalization of your strategic plan. Whether within the context of a formal strategic planning process or not, a review of the organization’s design may also be warranted for changes in strategy, a desire for process improvement, the introduction of new capabilities (or sunsetting of existing work), or in preparation for growth.

Adapt and adjust. Seems like good advice to me. Grandma was a very smart lady.

Want to know what you need to adapt to in 2024? Forbes shares The 10 Biggest Business Trends For 2024 Everyone Must Be Ready For Now.

Are you ready to adapt and adjust your organizational design? Let’s unlock your potential, together! Get in touch with our team.

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Staci Barfield is a Senior Advisor with Armstrong McGuire who specializes in organizational design, organizational assessment, organizational strategy, strategic planning, succession planning, leadership development, and executive recruitment. Learn more about Staci and check out her other musings in her bio. Listen to what Staci has to say about organizational design in this short video.