The design phase, combining the assess and define phases, integrates structure, work processes, metrics and rewards, people practices, and governance. In this phase, you’ll make choices about the fundamental design elements that will determine the future state of the organization.
Fundamental Design Decisions
Designing the organization’s structure lays the groundwork to ensure participants understand their responsibilities, the timelines and the outcomes. Click on each step to learn more.
Define Design Criteria & Parameters
A. List your pros (improvements) and cons (constraints) for each structural design option.
B. Establish the structure design criteria and finalize with leadership.
C. Define success metrics to evaluate project impact over time.
D. Place boundaries or expectations within the process or project.
Create a High-Level Operating Model
A. Draft a high-level workflow (various inputs and outputs of the organization) of how people, processes and technology should be organized efficiently and effectively.
B. Ensure proposed design will address hierarchy, span of control and degree of coordination between business units.
C. Highlight the major components of where the work happens and how those components are interrelated.
Design Choices About Structure, Processes, Metrics & People
A. From the high-level operating model, design a blueprint of how the organization will operate.
B. Structure
i. Define the grouping of work activities, accountability and decision rights (placement of power and authority) within an organization.
ii. Collaborate with Job Analysis and Compensation teams to settle positions and pay elements.
C. Process
i. Design a detailed business process map or diagram that incorporates efficiency.
ii. Clearly outline roles and responsibilities within and across teams (horizontal processes).
iii. Establish key interaces and tools.
D. Metrics & Rewards
i. Define the measures used to evaluate individual and collective perormance.
ii. Define the organization’s scorecard and system for rewarding people (Rewards motivate employees and reinforce the behaviors that add value to the organization).
iii. Set up triggers that prompt a design review.
E. People Practices & Governance
i. Define how the organization will attract, hire, orient, develop, manage and retain its associates.
ii. Review and modify (as needed) Assessment & Selection, Perormance Feedback, Learning and Development, and Rewards and Recognition.
Create a Detailed Operating Model
A. Outline governance, succession planning, protocols, roles, responsibilities and relationships between various individuals and teams.
B. Facilitate a conversation with leadership to identify key interdependencies.
Once you’ve aligned work to the Operating Model, you can further refine the organization using the OD Guiding Principles. These principles ensure that you are accurate at least 80 percent of the time, create alignment across the businesses and establish freedom within the framework.
Simplify Structure
- Less layers, broaden scope
- Fewer and simplified roles
- Outsourcing is an option
- Manage to dollars and headcount
Empower a team environment
- Clear roles and responsibilities
- Shift of decisions lower in the organization
- Teams aligned to stretch goals and KPIs
- Create an environment where average isn’t good enough
Develop a flexible workforce
- Teams solve problems through various ways of working
- Expert communities contribute across the enterprise vs. constrained to a segment
- Mix of co-location and flexibility where beneficial
Unlock productivity
- Standardize processes and create cross-functional understanding
- Work organized in a run, support and change model; duplication is removed
- Automation, technology, and shared services are leveraged
- Deliver results with a high level of quality and transparency
There are benefits and risks to having an organizational design centralized versus decentralized. To further decide whether to centralize a function, use the Centralization of Functions Tool.
Designing the organization’s structure lays the groundwork to ensure participants understand their responsibilities, the timelines and the outcomes.
Test your knowledge on the Design phase with the following questions.
Select all that apply: What are the preliminary phases that need to be completed before the Design phase?
Incorrect
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Correct
That’s Correct! Before you begin the design phase, you first need to define the strategy objectives and assess the organization’s current state.
True or False: The details operation model addresses hierarchy, span of control and degree of coordination between business units, whereas the high-level operating model outlines roles, processes, and responsibilities.
Incorrect
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Correct
That’s Correct! A high-level operating model defines the organization’s design strategy at a high-level work flow. However, a detailed level outline defines governance, succession planning, protocols, roles, responsibilities, and relationships between various individuals and teams.
