Operating model and organization design: aligning structure to strategy
How to connect strategy, operating model and organization structure so work flows and accountability is clear.
Organizations often reorganize when something is wrong, then find the same problems return. The cause is usually that structure was changed before the operating model was clear.
Work in this order
- Strategy. What outcomes must the organization deliver, for whom?
- Operating model. How will value be delivered? Which capabilities, processes, technology and governance are needed?
- Structure. How should people be grouped to support that model?
- Roles and decision rights. Who is accountable for what, and who decides?
- Culture and leadership. Which behaviors make the model work?
Questions that guide design
- Which capabilities are core and which can be shared or sourced externally?
- Where do work and information flow between teams, and are those handoffs necessary?
- What should be decided centrally and what locally?
- How will the design support the way you want to work, for example in cross-functional teams?
Common mistakes
| Mistake | Better practice |
|---|---|
| Drawing boxes first | Define the operating model before the chart |
| Unclear decision rights | Document who decides, who advises and who is informed |
| Too many layers | Reduce handoffs and widen spans where possible |
| One-off redesign | Review regularly and adjust in small steps |
Make the change stick
- Involve leaders and affected teams in the design.
- Explain the reasons and what changes for each role.
- Support new managers with development.
- Track measures such as speed of decisions and clarity of accountability.
Our Organizational Development Consulting team helps align structure, culture and leadership with business goals.
Frequently asked questions
What is the difference between an operating model and an organization structure?
The operating model describes how the organization delivers value, including processes, capabilities, technology and governance. The structure is how people are grouped and who reports to whom, and should follow from the operating model.
How often should we redesign the organization?
Review it when strategy, scale or technology changes materially. Continuous small adjustments are usually better than infrequent large reorganizations.
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