Flevy Management Insights Q&A
What key organizational resources should we prioritize to enhance our company's structure and efficiency?


This article provides a detailed response to: What key organizational resources should we prioritize to enhance our company's structure and efficiency? For a comprehensive understanding of Organizational Design, we also include relevant case studies for further reading and links to Organizational Design best practice resources.

TLDR Prioritize Human Capital, Technological Infrastructure, and Process Optimization using a structured framework to drive Operational Excellence and sustain long-term growth.

Reading time: 4 minutes

Before we begin, let's review some important management concepts, as they related to this question.

What does Human Capital mean?
What does Technological Infrastructure mean?
What does Resource Allocation Framework mean?
What does Stakeholder Engagement mean?


When discussing what are examples of organizational resources, it's crucial to prioritize those that significantly enhance structure and efficiency. Organizational resources span a wide spectrum, from tangible assets like technology and capital to intangible assets such as brand reputation and human capital. Consulting giants like McKinsey and Bain emphasize the strategic allocation of these resources to bolster operational excellence and drive innovation. In the realm of enhancing an organization's structure and efficiency, focusing on human capital, technological infrastructure, and process optimization emerges as a paramount strategy.

Human capital stands at the forefront of organizational resources. A well-defined Talent Management strategy, underpinned by a robust framework for recruitment, development, and retention, is indispensable. According to Deloitte's Global Human Capital Trends report, organizations with high levels of engagement report 22% higher productivity. This underscores the importance of investing in employee development programs, leadership training, and performance management systems. Cultivating a culture that values continuous learning and adaptability not only fuels innovation but also enhances operational efficiency by ensuring that the workforce is skilled, motivated, and aligned with the organization's strategic goals.

Technological infrastructure is another critical organizational resource. In today's digital age, investing in the right technology can streamline operations, facilitate data-driven decision-making, and enable Digital Transformation. A robust IT framework supports various functions, from automating routine tasks to harnessing the power of Big Data and analytics for Strategy Development. For instance, implementing an Enterprise Resource Planning (ERP) system can integrate processes across finance, HR, procurement, and operations, leading to significant gains in efficiency. Consulting firms like Accenture and Capgemini highlight case studies where digital tools and platforms have revolutionized traditional business models, pointing to the necessity of a strategic approach to technology investment.

Framework for Prioritizing Organizational Resources

To effectively prioritize organizational resources, a structured framework is essential. This framework should encompass an assessment of current capabilities, identification of gaps, and a strategic plan for resource allocation. A template for this process might include conducting a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to understand the internal and external factors affecting the organization. Following this, a prioritization matrix can be used to rank resources based on their impact on the organization's strategic objectives and the urgency of needs. This methodical approach ensures that resources are allocated efficiently, targeting areas with the highest potential for improving structure and efficiency.

Another aspect of the framework involves continuous monitoring and evaluation. This includes setting clear KPIs (Key Performance Indicators) for each resource investment, enabling organizations to measure outcomes against objectives. Regular reviews should be conducted to assess the effectiveness of resource allocation and make necessary adjustments. Consulting firms often advocate for a dynamic approach to resource management, where decisions are data-driven and adaptable to changing market conditions and organizational needs.

Engagement with stakeholders is also a critical component of the framework. This involves clear communication of the strategic plan for resource allocation and soliciting feedback from employees, customers, and other stakeholders. Such engagement not only fosters transparency but also encourages collaboration and innovation, further enhancing the organization's structure and efficiency.

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Real-World Examples and Best Practices

Several leading organizations have successfully prioritized their resources to achieve remarkable improvements in structure and efficiency. Google, for example, invests heavily in its human capital, offering extensive training programs, competitive benefits, and a culture that promotes innovation. This focus on employee development and satisfaction has been linked to its high levels of innovation and operational efficiency.

On the technological front, Amazon's use of AI and machine learning to optimize its supply chain and customer service processes serves as a benchmark. The company's strategic investment in technology has not only streamlined operations but also provided a superior customer experience, setting a high standard for efficiency in the e-commerce sector.

In conclusion, prioritizing organizational resources is a strategic imperative for enhancing structure and efficiency. By focusing on human capital, technological infrastructure, and process optimization, and employing a structured framework for resource allocation, organizations can drive operational excellence and sustain long-term growth. Consulting industry insights and real-world examples provide valuable guidance and best practices for C-level executives aiming to optimize their organizational resources.

Best Practices in Organizational Design

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Organizational Design Case Studies

For a practical understanding of Organizational Design, take a look at these case studies.

Organizational Alignment Improvement for a Global Tech Firm

Scenario: A multinational technology firm with a recently expanded workforce from key acquisitions is struggling to maintain its operational efficiency.

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Talent Management Enhancement in Life Sciences

Scenario: The organization, a prominent player in the life sciences sector, is grappling with issues of Organizational Effectiveness stemming from a rapidly evolving industry landscape.

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Organizational Redesign for Renewable Energy Firm

Scenario: The organization is a mid-sized renewable energy company that has recently expanded its operations globally.

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Inventory Optimization Strategy for a Plastics Manufacturing SME

Scenario: A small to medium-sized enterprise (SME) in the plastics manufacturing sector is confronting significant Organizational Development challenges, stemming from a 20% increase in raw material costs and a 10% decline in market share over the past two years.

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Organizational Effectiveness Improvement for a Global Technology Firm

Scenario: A multinational technology company is struggling with declining productivity and employee engagement, impacting its overall Organizational Effectiveness.

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Retail Workforce Structuring for High-End Fashion in Competitive Landscape

Scenario: The organization is a high-end fashion retailer operating in the competitive luxury market, struggling with an Organizational Design that has not kept pace with rapid changes in consumer behavior and the retail environment.

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Related Questions

Here are our additional questions you may be interested in.

How can the principles of organizational design be applied to enhance remote work effectiveness and employee engagement?
Applying Organizational Design principles, such as structuring for remote efficiency, fostering a culture of engagement and collaboration, and emphasizing Continuous Learning and Development, can significantly enhance remote work effectiveness and employee engagement. [Read full explanation]
What strategies can leaders employ to ensure organizational design enhances global competitiveness?
To enhance global competitiveness through organizational design, leaders should focus on strategic alignment and adaptability, invest in technology and innovation, and foster a global mindset and inclusive culture, alongside implementing efficient processes, decentralized decision-making, and continuous improvement practices. [Read full explanation]
In what ways can data analytics be leveraged to enhance organizational alignment and decision-making?
Data analytics enhances organizational alignment and decision-making by informing Strategic Planning, improving Performance Management, driving Digital Transformation and Innovation, and strengthening Risk Management, as evidenced by successes at Amazon, Netflix, and Google. [Read full explanation]
How can the principles of sustainability be integrated into organizational alignment to support long-term business goals?
Integrating sustainability into organizational alignment involves Strategic Planning, Operational Excellence, and Leadership commitment to embed sustainability principles into core strategy, operations, and culture, driving long-term business success and resilience. [Read full explanation]
What are the key considerations for organizations when integrating ethical AI use within their operational processes?
Integrating ethical AI involves Strategic Planning, Operational Excellence, and continuous Risk Management and Performance Management to align AI use with ethical standards, legal requirements, and societal expectations. [Read full explanation]
What impact will the increasing importance of sustainability and corporate social responsibility have on OD strategies?
The growing emphasis on Sustainability and Corporate Social Responsibility is fundamentally transforming Organizational Development strategies to include sustainable practices, driving Innovation, Operational Excellence, and Risk Management, while enhancing Employee Engagement, Leadership Development, and Stakeholder Relationships for long-term success and resilience. [Read full explanation]

Source: Executive Q&A: Organizational Design Questions, Flevy Management Insights, 2024


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