9 org design patterns you should know

Free translation of the article9 Organizational Design Models You Should Knowpublished on the Academy to Innovate HR (AIHR) blog.

20 years ago, companies faced organizational restructuring every few years or even decades, and most executives faced the challenge perhaps only a couple of times in their entire careers. But now automation and competitive pressures are forcing companies to change much faster.

By 2015, organizational change had become a way of life. According toMcKinsey study., 60% of companies have redesigned within the last two years. Another 25% did so three or more years ago.

Then came the pandemic in 2020, which pushed businesses to make massive changes. Many companies experienced in a matter of months what would normally take decades. Once we had time to adapt to change before the next one started, today’s conditions dictate different rules: change becomes a way of life. And as you realize, it’s not about rearranging furniture. It is a change that completely transforms the way we work.

This is what I propose to talk about in this article:

• we will look at traditional organizational design models and how they have been used to align structure and workflows with business strategy.
• Discuss how to apply these models as effective diagnostic tools to understand when various organizational factors may be out of balance.
• Learn how companies have moved from static diagnostic and alignment models to flexible models that help them adapt to constant change.

What is organizational design?

Orgdesign is how a company’s management system is organized to implement its strategic plan and achieve its goals. It is the company’s strategy that determines the optimal type of organizational structure.

Important! There are no best practices of organizational design, as each company has its own needs. Following the methods and approaches of another organization is unlikely to lead you to long-term success, which is why when designing an organizational structure use models of organizational design, rather than a set of strict recommendations.

What are organizational design models?

An orgdesign model is a conceptual framework that a company uses to:

• diagnose its current state,
• visualize a future state that will lead to success,
• create an identity.– purpose, values, and culture to help the company thrive.

Diagnostic models

Most of the well-known organizational models in use today originated in the 1970s and 1980s. Their creators sought to move from the hierarchical models of the industrial age to flatter and more operational structures.

Understanding the following traditional models will help you choose the right tools to diagnose and change work patterns.

McKinsey 7S Model

This model is probably considered one of the best known. Its main purpose is to analyze the effectiveness of the organizationthrough the interaction of 7 key elements. Importantly, this is not achieved by examining any one element, but by balancing and harmonizing them into a coherent whole. The model distinguishes between “hard” and “soft” elements.

“Hard” elements: structure, strategy and systems:

• Strategy defines how the company will compete in the marketplace.
• Structure is the way business functions are organized as reflected in an organizational chart.
• Systems – the framework, processes, and procedures that define how a company does business.

These elements are easier to manage than the “soft” elements – skills, people, style and shared values:

• Skills are the ability of an organization to do its job. Usually measured in the context of competencies, a system that links each team member’s knowledge, skills, and abilities to the organization’s goals. Analyzing these competencies allows for effective management.

• Personnel – the company’s employees and the methods of managing them.

• The management style of the company by the top management and the values they translate to the company.

• Shared values are the norms and standards that guide behavior at all levels of the organization and are thus the core of the 7S model.

Advantages of the 7S model

• The value of the McKinsey model is in balancing critical elements instead of focusing only on strategy and structure.

• Mergers and acquisitions can benefit from combining functional elements and processes.

• 7S helps to apply policies, rules, and strategies formulated by company leaders.

• The model can be used to develop analytics to assess the impact of change.

Disadvantages of the 7S model

• The McKinsey model does not include a change management action plan. It is a static analysis of the balance sheet of all elements of the organization.

• The 7S is considered to be internally oriented and does not take into account the influence of external factors. At the same time, strategy formation implies the mandatory analysis of external factors.

• The model does not explicitly explain organizational effectiveness or efficiency.

The 7S model is often criticized for not specifically identifying weaknesses in strategy or strategy execution. However, it should be remembered that McKinsey, like other consulting firms, developed its models as a basis for organizational design consulting, which means that any changes are unlikely to be intended on a “do-it-yourself” basis.

Jay Galbraith’s star model.

Place
tender for free

Our system will find you the contractors for services related to website or application development, search engine optimization, contextual advertising, marketing, SMM and PR.

Fill out an application

12682 tenders

conducted in the eight years of our site’s operation.

The star model is a model that proposes a set of governing policies with which to influence the company, and which are within management’s control:

• Strategy defines goals and objectives, values and missions, and the “basic direction of the company.”

• Structure determines where power and authority reside in the organization based on a four-pronged analysis:

The star model is a model that proposes a set of governing policies with which to influence the company and which are within management’s control:

• Strategy defines goals and objectives, values and missions, and the “basic direction of the company.”

• Structure determines where power and authority reside in the organization based on a four-pronged analysis:

– Specialization – the specialties required to do the job.

– The form describes the number of people in the organizational units or area of control at each level.

– Power distribution determines how flat or hierarchical the organization is.

– Departmentalization is the formation of organizational units along dimensions such as functions, work processes, markets, customers, and geography.

• Processes are the information flows and decision-making processes within an organizational structure. Vertical processes allocate funds and talent, while horizontal (lateral) processes are workflow.

• Rewards align employee goals with organizational goals. To do this, they must be aligned with other components of the structure.

Personnel refers to the alignment of human resource policies and functions to develop both human and organizational capabilities.

Benefits of the Star Model

• The model supports detailed descriptions of the elements and the interactions between them.

Disadvantages of the model

• The model does not consider culture and purpose as motivating factors.

• The model does not include entry and exit points.

Marvin Weisbord’s six-cell model.

Marvin Weisbord’s model, introduced in 1976, emerged as a result of his work to create the“a tool that everyone can use.”. He wrote that it helped him quickly expand the scope of diagnosis “from interpersonal and group problems to the more complex contexts in which organizations are managed.”

By presenting these six elements as flashes on a radar screen, he shows how to manage relationships, much like air traffic controllers manage the distance, altitude, and speed of an airplane. Like other orgdesign models, the Six Cell Model is a diagnostic tool that is designed to understand the relationships and balance of elements.

1. Objective:What “business are we in?”.
2. Structure:How do we distribute the work?
3. Relationships:How to manage conflict (coordinate between people? With what technologies?).
4. Rewards:Is there an incentive to accomplish everything that needs to be done?
5. Leadership:Does anyone maintain a balance between the boxes?
6. Auxiliary mechanisms:Do we have the right coordination technologies?

Weisbord’s model is very similar to Galbraith’s approach, and either of them could be useful as a diagnostic tool. And, as in the previous case, there are many materials and guides available on the Weisbord model.

Advantages of the Six Cell Model

• Captures information and materials from both internal and external sources.

• Analyzes communication structures to process information efficiently.

• In each unit, the discussion begins with diagnostic questions that set the framework for analysis.

• Everything in the model starts with the goal; it is crucial.

Flaws in the model

• The model does not talk about balance, which can create a risk of overemphasizing some elements to the detriment of others.

Descriptions of other models and helpful tips on how to choose the right org design model are availablein the continuation of this article. And for a deeper dive into the topic of product management, join thethe in-person portion of ProductConf.April 25! Participants will get an overview of the best methodologies and tools – from user research to roadmap building.