Bringing Structure to Chaos Through Organisation Design

Setting context: what is org design, and why do we need it?

When thinking about organisational design, it’s important to start with the question: Why does the organisation exist? What is its True North? This is the purpose, the foundation upon which the organisation is built. The purpose cannot be just about generating revenue or profit; but something fundamental that drives the organisation’s existence—whether it is to provide a product, experience, or support a cause.

The vision, often confused with purpose, is different. While the purpose is the ‘why’ behind the organisation, the vision talks about ‘what’ the organisation aspires to achieve. Once we have clarity on the purpose and vision, the organisation’s strategy - the ‘how’ - comes into play. It is the execution plan that makes the vision a reality. With this context, when we look at what org design is, it is the tool to bring the organisation's purpose to life.

As a young organisation evolves, its structure begins to form around its purpose. Clarity may be lacking initially, especially in a nascent or emerging industry. Hence, we start by identifying key roles needed to meet our goals and hiring people suited for these roles. As the org grows up, we begin to understand how the roles can cluster into departments with defined reporting. Departments begin to define their own goals. This is where roles become more refined to ensure that the organisation’s purpose is fully realised. In essence, organisation design is a journey that begins with a clear purpose and grows to ensure that purpose thrives through planning and execution.

How does org design come into being? How does it evolve?

In the early stages, especially if capital is abundant, organisations hire for a range of roles. At times, we may find one team member performing multiple roles due to a lack of role clarity. The work itself may be so new that the fusion of roles seems natural. As the organisation matures, more complexity is added, and role clarity emerges. Hence, the need for organisation structure becomes more evident.

For younger organisations, revisiting the org chart is an exercise to be repeated almost every six months. For larger organisations and mature industries, the structures may be more rigid. But the external environment in which all organisations operate keeps changing, with new tech and new ways of doing business. In either case, organisations do not have the luxury of working with fixed structures for years. We must keep asking ourselves: is my organisation’s structure still serving our original purpose? Is it aligned with our strategy? We need to relook at it at least once every year. If we don’t have this foundational understanding and willingness to iterate in place, any framework built on top of the org design will be nothing more than a textbook model, detached from our purpose. 

How and for what do we use org design?

Org design should clarify the following:

• What are the roles required for the organisation to meet its goals? What are the places in which roles overlap or diverge?
• Does each role have role authority to execute the role? 
• What are the responsibilities associated with each role? 
• Is authority delegated or negotiated in the org structure?
• What are the levels at which a particular role should sit?
• What is the experience and competencies required for each role? Are these competencies built into the lifecycle of the team member?

We may not have all these answers in the first iteration. Early in the organisation’s life, we may approximate the required proficiency and experience for the roles. Such assumptions evolve over time. Once a solid organisation structure is in place, it flows into other frameworks such as job architecture, job leveling, competency framework, and career progression. Once we have roles, responsibilities, and competencies defined, we are well-equipped to solve more complex problems.

Ultimately, all these elements need to be interlinked and stitched together, stemming from the foundational structure of the organisation design. Otherwise, we will always be playing a catch-up game.