Organisation design

What it is

The design of reporting lines, unit boundaries and accountabilities so the organisation can execute the strategy it has chosen. It starts from the work — the processes and decisions the operating model requires — and derives structure from that, rather than starting from the current chart and moving the boxes around.

The work first

Which processes and decisions the structure has to support. Designing from the existing chart preserves the existing problems with new names on them.

Grouping logic

By function, geography, customer, product, or a matrix of two. Each grouping makes one thing easy and another thing hard; the choice is which trade-off you would rather spend the next three years managing.

Spans and layers

How many people report to each manager, and how many levels sit between the top and the front line. Narrow spans create layers, and layers slow decisions more reliably than anything else in the design.

Accountability

What each unit owns and is measured on. Two units accountable for the same outcome means neither of them is.

Interfaces

Where units have to work together, and how that is governed. Most of the pain in a new structure sits in the gaps between the boxes rather than inside them.

The people question

Which roles are new, changed, contested or gone. It is a separate exercise from the design, and running the two together is how a design gets bent to fit the incumbents.

How you run it

1. Start from the operating model, not the chartList the decisions and processes the structure must support. If nobody can do that, the design work is premature and will be redone.
2. Generate two or three genuine optionsOne option is a proposal, not a design. Each should make a different trade-off, and each should be describable in a single sentence.
3. Set spans and layers explicitlyDecide the targets, then test the design against them. Layers accumulate by accident and are never removed by accident.
4. Name what each unit is accountable forOne owner per outcome. Where two units share one, either merge them or split the outcome — do not leave it shared and hope.
5. Design the interfaces, then the peopleGovernance for the gaps between units first, and only then who sits where. Reversing that order is how the design bends around whoever is already in post.

The prompt

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