Designing Organisations to Deliver Efficiencies

Organisational design is one of the key strategic drivers in delivering business performance in organisations today. The organisational landscape has seen a diverse range of businesses such as NSW Railcorp, Qantas, PWC and Vodaphone recently embark on organisational change. The commonality across these and many other organisational design programs is the singular goal of driving greater efficiency and effectiveness of people and business processes, whilst reducing their overall cost base.

People Solutions Group designs and assists businesses in executing new operating models that deliver on business strategy.

A company’s organisational design and structure is a powerful system that directly impacts culture and therefore business performance. The drivers that encourage or force organisations to rethink their organisational structure are varied but typically revolve around the need to deliver greater quality and efficiency, increased capability, whilst making reductions to the overall cost base of the business. For most organisations personnel salary costs are typically one of the highest operating cost in running their business.

A consistent trend in organisational design is the creation of centres of excellence or shared service offerings, particularly in medium to large-scale businesses. These designs provide businesses with an opportunity to drive greater productivity and efficiency and are most successful when implemented in parallel with programs to standardise and simplify business process and practices.

The shared service trend has been most evident recently in professional services, media, property development and energy sectors. These industries have applied the shared service concepts to a diverse range of functions, such as high volume and scale processing centres and corporate centres such as finance, HR, strategy and employee communications.

The main benefit to having a shared service operating model is it pools expertise and allows businesses to leverage the broader technical knowledge within the team. These models also facilitate improved information sharing and knowledge management practices as well as provide the best platform to continuously improve the consistency and quality of the internal customer experience. An indirect benefit of the shared service model is the cultural symbol that is achieved in bringing people and work from across many parts of the business together. This is especially the case in mutli-brand or highly diverse organisations.

Organisational design is more than purely a structural response to trying to solve a business problem. It starts with the overall business strategy and involves consideration of all the elements of the organisation, environment, processes, decision making, accountability and/or authority and obviously its people. Organisations that are able to identify and embrace these elements are more likely to be more successful in delivering their objectives and make significant steps towards sustaining the change.

Organisations not considering these broad factors of organisational design are more likely to make frequent and often tactical structural changes that are not fully supported nor understood by their people. The risk of this scenario is that businesses may miss the potential value in having the ‘right’ organisational structure. These tactical changes largely serve to re-label existing practices and models, leading to disruption of people, negatively impacting the business performance and even potentially customers.

People Solutions Group brings their strong discipline focus and expertise ensuring that all these elements are considered and an organisational design process will deliver the best results for your business. To complement the design capability we are able to provide tailored communication and change strategies and advice to ensure any related change is embed by the organisation and its people.