The third and last primary factor influencing organizational design is ‘people.’ Many of you will ask what people have to do with designing an organization structure. After all, people usually come to organizations as workers and have no choice but provide their skills under whatever structure the C-Suite or Owners choose. People are hired and placed in the ‘right’ boxes on the organizational chart.
Well, people should influence the design of an organization’s structure. Are you a CEO? If yes, neglect the influence of people on organization structure design at your own peril.
“Engaged employees are involved in, enthusiastic about and committed to their work. Gallup’s extensive research shows that employee engagement is strongly connected to business outcomes essential to an organization’s financial success, such as productivity, profitability and customer engagement. Engaged employees support the innovation, growth, and revenue that their companies need.”
What is wrong with the status quo?
The status-quo assumes that organizational design is a matter of ‘strategy’ and the ‘processes’ required to deliver strategic outcomes. People are considered a secondary factor. After all, the demand/supply relationship is skewed in favor of the employer and not the employee. Employees that are unhappy with their current employer are free to look at other alternatives. And employers can always hire new staff – there is a long list of individuals waiting for the opportunity to work
So, the long and short is that companies disregard people when designing structure:
- Since people aren’t considered critical to organizational structure design, structures mostly reflect the views of the owners and those in the C-Suite.
- As a result, smart people are hired by companies and thrown in boxes on the so-called organizational-chart. However creative an employee may be, if they are appointed to fill a box in the accounts function, that is where they are expected to stay.
- It’s important to remember that the traditional organizational architecture is influenced by Fredrick Taylor’s reductionist approach. Structure design is about getting the most out of laborers, at as minimal a cost as possible. It’s a machine environment that wants to force humans to take on the life of a machine
- Because people are placed in functional boxes, irrespective of what else they can do, they do not connect with their jobs – roles – and ultimately, the brand
- We attribute the disconnect between people and the brands to a people problem. Better educated, better exposed, rights-aware, independent individuals can’t be treated like machines.
- Even in cases where unemployment rates are incredibly high, forcing people into organizational-chart boxes instead results in employee disengagement. It’s not automatic that employees will work very hard to keep their scarce job.
- Companies have put their heads in the sand on this matter. Apparently, it’s not the jobs that are boring or not designed right – it’s the employees that have a problem. Many employers blame younger generations that want it easy and aren’t willing to work as hard as their older and more mature peers
Designing organizational structure for the modern times:
Contemporary design should address the factors below. According to Inc.com,
these factors are critical to organizations keeping labor motivated and engaged:
We spend over one-third of our adult life at companies trying to fend for ourselves. There has to be meaning at work, and deep meaning at that. Inc.com calls this the ‘theme that ties everything together [in our life]”. Create an organizational structure that gives meaning to employees, and you will retain them longer, plus they will be more productive.
People need a certain amount of wiggle room to learn, share, and experiment. The most recent generation of workers wants to learn and grow professionally. Without professional growth opportunities, this generation gets bored and disengaged
Let people make choices – the employer’s job is to hold them accountable for the decisions that they have made. Steve Jobs once said: ‘it doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.’
Organizations structures should be designed to give credit where credit is due. According to Inc.com, “Visibility can often be a more powerful motivator than a pay rise or a bump up in bonus.”
Traditional functional structures aren’t primed for this kind of recognition. Functional heads take credit that does not belong to them; they get the most significant bonus at the end of the year, as well as recognition by the Board, at the expense of those people working below them
Companies apparently find it difficult to allow people to be themselves. According to Inc.com “Hiding behind a mask, lying, and otherwise acting deceitfully about one’s true self is uncomfortable, demeaning, and demoralizing.”
Organisational structures should be designed for ‘talking – and even more, listening.”
So, why bother about ‘people’ informing organizational structure design?
Disregard people in organizational design and suffer the consequences below:
- Lost revenue due to low employee productivity
- The “Come pick my pay-cheque and go home” syndrome
- Stress and exhaustion at work
- High employee turnover
- Discontinuous strategy/implementation cycle at the company as employees come and go
- Your employees are your best brand ambassadors, and you need to keep them on side
CEO’s, please ensure that people that work for you are happy and passionate about the brand. More than ever, effective organizational design is placing people issues front and center. Organisational design should be reincarnated to meet social orientations of the people that work for the companies.