Articles

Organization design for project practice

The organization design approach was actually developed for strategic projects by large companies. But it is also a great tool for smaller projects and for project-oriented companies.

Organization design is the process of designing the organizational framework of a company in a conscious and goal-oriented manner. This creates an effective organization that can successfully pursue its strategic goals.

“A well designed organization makes the collective work of accomplished complex tasks easier.” Jay R. Galbraith, 2007

Behaviour is not random

Organization Design's considerations are based on the assumption that people in companies do not behave randomly or arbitrarily. In order to survive and be successful in your organization, you adapt your behaviour to the framework of the company or department in which you work.

Ultimately, the conditions that prevail in a company determine the behaviour that employees display. Regardless of whether it is about behaviour towards managers and colleagues, suppliers or customers. A good organizational design promotes sensible behaviour and is therefore a decisive competitive factor.

The organizational model

An organizational model that is derived from the famous "Star Model" by Jay R. Galbraith serves as a central instrument for analyzing the current situation in companies and for planning the steps of change.

Especially for companies on the way to more agility and companies that operate their core business on a project basis, there are six organizational elements that must work together in a coordinated manner:

 

  • ORGANIZATIONAL STRUCTURE: How is the organization and distribution of responsibility structured?
    E.g.: functions, positions, and roles; Cooperation between management levels; important interfaces
  • CONTROL: How is it controlled and decided?
    E.g.: formal decision-making structure, set of rules, rules of procedure; Clarity of decision-making structures; Authority to issue instructions, escalation of problems
  • BUSINESS PROCESSES: How is the process organization, how are the services provided?
    E.g.: coordination of processes; Alignment with stakeholders; Quality of the core and support processes
  • PERSONNEL SYSTEMS: How do the right people get into the right positions?
    E.g.: qualification requirements, recruitment, personnel development; Pay systems and working conditions
  • INFRASTRUCTURE: How does the infrastructure support the provision of services?
    E.g.: information technology, consequences of IT logic for the organization; spatial design and workplaces
  • COMMUNICATION: How is vertical and horizontal communication anchored?
    E.g.: formal and informal communication; Design and impact of the communication infrastructure,

These six organizational elements determine the behaviour of the employees and the culture of the company. Day after day they have to be balanced by the leadership so that they do not contradict each other and remain aligned with the strategy and goals as a whole.

The use

Organization design is mainly used as an approach for the strategic change of companies. But it is also an excellent tool for smaller units such as divisions or departments, and for Project Management Offices and Centers for Excellence. In this way, optimizations and changes can be approached in a planned manner.