{"id":6431,"date":"2020-04-17T07:18:12","date_gmt":"2020-04-17T12:18:12","guid":{"rendered":"http:\/\/flevy.com\/blog\/?p=6431"},"modified":"2020-12-18T22:15:01","modified_gmt":"2020-12-19T03:15:01","slug":"smart-organizational-design-approach-vs-traditional-organization-design-approaches","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/smart-organizational-design-approach-vs-traditional-organization-design-approaches\/","title":{"rendered":"Smart Organizational Design Approach vs. Traditional Organization Design Approaches"},"content":{"rendered":"

\"\"Business environment has transformed drastically from what it was a century ago.\u00a0 It has become immensely challenging due to competition, disruptive technologies, laws, and globalization.\u00a0 These challenges warrant better performance to address customer needs and to survive\u2014and outpace\u2014intense competition.\u00a0 Consequently, organizations have become complex.<\/p>\n

The work that individuals perform in an organization has also shifted from manual labor and clerical jobs to knowledge-based experiential tasks.\u00a0 Traditional workforce was required to adhere to commands and stick to routines, whereas today\u2019s workforce needs to be more empowered, innovative, able to adapt to varying circumstances, and render sound judgment.<\/p>\n

Adapting with the constantly changing business environment is essential for organizations aspiring to succeed in today\u2019s competitive markets.\u00a0 In order to stay competitive, more and more organizations across the globe are undertaking Business Transformation<\/a> programs to reorganize their businesses.\u00a0 However, a large percentage of such programs fail to achieve the desired outcomes.<\/p>\n

For the Organizational Design<\/a> to be successful, leaders need to be mindful of the revolutionized work settings and business environment of this age.\u00a0 One of the major factors attributed to these failure rates is utilizing traditional approaches to reorganization, which are proving ineffective in this digital age.\u00a0 These traditional approaches appreciate \u201clevel of control\u201d and power, and underestimate the significance of employee autonomy and innovation.\u00a0<\/strong><\/p>\n

The Smart Design Approach to Organization Design<\/strong><\/h2>\n

Today\u2019s Knowledge Economy necessitates the employees to be more empowered to decide on their own than merely following commands. \u00a0People act in ways that are best for their own interests.\u00a0 The new approach to reorganization\u2014termed Smart Organizational Design<\/a>\u2014aligns the workforce\u2019s best interests with the organizational mission rather than seeking control over the employees.\u00a0 The focus is on changing the environment (context) and mindsets of employees willingly and instilling team work and cooperation, thereby enhancing organizational performance considerably.<\/p>\n

The Smart Organizational Design approach entails classifying the existing workforce behaviors, ascertaining the desired behaviors critical to improve performance, and providing environment (context) favorable to develop new behaviors.\u00a0 The approach encompasses 3 main steps:<\/p>\n

    \n
  1. Define why reorganization is necessary (objective)<\/strong><\/li>\n
  2. Determine the behaviors critical to support reorganization <\/strong><\/li>\n
  3. How to execute the Smart Organizational Design <\/strong><\/li>\n<\/ol>\n

    \"\"<\/a><\/p>\n

    Let\u2019s dig deeper into the second step.<\/p>\n

    Determine the behaviors critical to support reorganization<\/strong><\/h2>\n

    The next step involves the leadership to determine the \u201cwhat\u201d element of the Smart Organizational Design approach\u2014i.e., definition of certain behaviors critical to achieve the transformation purpose. \u00a0Determining the desired behaviors necessitates thinking through the following 4 critical Smart Organizational Design aspects.\u00a0 These 4 design aspects work in tandem to shift the environment (context) for the workforce and motivate them to embrace the new behaviors crucial for improved performance:<\/p>\n