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Effective Leaders Do Not Delegate Organization Design Decisions

Over the years I have seen many leaders delegate the design of their organization to HR partners instead of leading it themselves. Big mistake and here is why.

Leaders send very loud messages when they announce a new organizational structure. The first thing employees do is scrutinize the newly minted organizational chart to draw their own conclusions on the power shifts that have occurred via a change in the decision making process.

In his book Designing Organizations: An Executive Guide to Strategy, Structure, and Process, Jay Galbraith, one of the world’s leading experts in organizational design, states, “Organization design decisions significantly affect the executive’s unit. By choosing who decides and by designing the process influencing how things are decided, the executive shapes every decision made in the unit. The leaders become less of a decision maker and more of a decision shaper. Organization design decisions are the shapers of the organization’s decision-making process.”

The leader’s role in organization design is to trike the right balance between each element of an organization design. He/she must follow the organization design process carefully to arrive at the most effective structure to achieve business objectives. A structure must be derived from a company’s strategy and then designed to support it. The strategy is based on a number of strategic business objectives (SBOs) that identify the imperatives that need to be accomplished to successfully execute it. To accomplish these SBOs, the leaders of a company require: people with the right skills and mindset, reward systems that motivate the workforce, effective business processes that allow the sharing of information that will get the work done, and an organizational structure that establishes where the power to make decisions resides and facilitates how the work is conducted. Together, these define acceptable behaviour, drive performance, and shape the organizational culture.

And also keep in mind that organizational structures do not get things done, people do. It is ultimately people who are well rewarded for optimizing the right processes and sharing the right information who advance their company's strategy. This idea is reinforced by a fundamental Six Sigma concept I learned years ago: customers do not get their needs met by working with a company’s organizational chart, rather, they work through its systems and processes as managed and executed by its people.

Next time you are faced with an organization design, be sure to lead the process. Call on your HR business partner, or an internal organization design expert to work with you, but make sure you lead the process and understand the power shifts inherent in any new organizational structure and the message you will be sending the rest of the organization through your new organizational chart.


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