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ORGANISATIONAL DESIGN: THEORY VERSUS PRACTICAL APPLICATION

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Presentation on theme: "ORGANISATIONAL DESIGN: THEORY VERSUS PRACTICAL APPLICATION"— Presentation transcript:

1 ORGANISATIONAL DESIGN: THEORY VERSUS PRACTICAL APPLICATION
SAIMAS workshop ORGANISATIONAL DESIGN: THEORY VERSUS PRACTICAL APPLICATION 27th October 2016 Ground Floor, 19 Souvereign Drive, Route 21 Corporate Park, Irene P.O.Box 203, Wapadrand, 0054 T: W:

2 Service delivery beyond implementation
Topics for discussion Reflecting on different theoretical models / approaches directing Organisational design. Why we need Design principles? Evaluating the current state of Organisation structure: Applying tests. Holistic view: Structure follows Process follows Strategy. Strategy evaluation 3rd generation process approach Maturity assessment Levels of Accountability (LoA) Practical application. Service delivery beyond implementation

3 A Comparison of three popular Organization Design Models
Organization Design Models- A comparison Organization Design is not an exact science. The success of any approach lies in making the design exercise logical and objective. Over the years, many models have been developed for understanding the various elements of Organization Design. The objective has been to provide a framework to understand the intricacies of organization design. Source: Guide to Organisation Design: Creating High-Performing and Adaptable Enterprises By Naomi Stanford, John Wiley& Sons, 2007 Service delivery beyond implementation

4 A Comparison of three popular Organization Design Models
McKinsey’s 7S Model Published by Waterman & Peters in 1980s, this is the most commonly accepted model. Its popularity lies in the fact that both hard elements and soft elements have been considered and their interactions are firmly established Benefits Description of important organizational Recognition of the interaction between Limitations: No external environment (input)elements throughput /(output) element No feedback loops. No performance variables. Service delivery beyond implementation

5 A Comparison of three popular Organization Design Models
Galbraith’s Star Model Developed by Jay Galbraith in Galbraith’s Star Model 1960s, the star model is widely accepted because of the Strategy approach that seamlessly links competitive advantage to strategy to structure , people , lateral processes and reward mechanisms People Structure Rewards Processes Behavior Performance CultureBenefits Benefits: - Description of important elements - Recognition of the interaction between elements Limitations: - Does not “call out” some key organizational elements including input / output culture Service delivery beyond implementation

6 A Comparison of three popular Organization Design Models
Weisbord Six Box model Developed by Marvin Weisbord in the 1970s, this Weisbord Six Box Model model gives attention to issues such as: Purpose Relationship Mechanism Rewards Structure Environment Benefits Include some diagnostic questions per box Requires he purpose to be stated Limitations Focus on some elements may lead to overlooking others Service delivery beyond implementation

7 Other popular Organization Design Models
Nadler and Tushman’s Congruence Model Developed by David A Nadler and M L Tushman in the early 1980s, the basic principle of this model is that an organizations performance is derived from four elements: tasks, people, structure, and culture. Burke & Litwin Model (Developed in 1992), this model shows the various drivers of change and ranks Burke-Litwin Model them in terms of importance. The model is expressed diagrammatically, with the most important factors featuring at the top. The lower External layers become gradually less important. 7 P model focused from the client perspective Service delivery beyond implementation

8 Why is design projects not successful?
Focus on the people and not the work (position) To close to the answer (environment) – “Part of process and detail” Wrong intent Personal agenda’s Empire building thinking GAP for current to new to big Can not afford the structure Little logical definitions and principles applied ? Service delivery beyond implementation

9 Why we need design principles?
Ensure objective design Provide guidance Provide parameters Give focus to the design team Keep the design team honest within the parameters Utilise as evaluation criteria Service delivery beyond implementation

10 Evaluation: Proposed structure vs Design Principles
Yes/No Comments Customer focus Yes Inclusion of BRM ITIL compliant Identified ITIL ownership within ICTS, ACS to participate in processes Formalise PM Identified within ICTS Design for role and not people Design compiled independent by H2R Allow for succession planning Middle management layer identified Span of control (Team size) – Practical Partially Span of control could be bigger Preference to flat structure Clear role and responsibilities – no duplication No duplications

11 Evaluation: Proposed structure vs Design Principles
Yes/No Comments Alignment to UCT structures Yes Part of grading process Do not structure for a technology basis Partially Structured for required skill sets Capacity issue More positions within the proposed structure Skills profile and retention Skills sets defined as part of job profile; Retention is a management function –can not structure for this Integrate system technologies Remove non core functions from the structure Differentiate between support and new development in structure

12 Evaluation: Proposed structure vs Design Principles
Yes/No Comments Align structure with best practices Yes Fit for purpose & align to good practice models Accommodate institutional culture Inclusion of BRM Allow for new development skill sets Within System Development function Ownership-based structure Clear ownership defined Allow for integration across ICTS Participation in cross-functional processes (e.g. ITIL)

13 Org design tests Capacity Utilization Test:
The test comparatively evaluate the structure in terms of the FTE ratio’s Structure Effectiveness test The test evaluates the number of levels as well as the span of control Business Process Maturity test The test evaluate the level of business process standardisation and efficiency (Business Process Maturity) Role clarity test The test evaluate if different positions takes responsibility for the same deliverables. Resource availability test The design of the organization should take into consideration the number of critical positions and difficulty to get them filled. Functional test The design of the organization should ensure that functional departments add appropriate value. Business practice maturity evaluation and continuous improvement processes Red tape test The design of the organization should cater for unnecessary procedures regarding decision making. History test The company are structured accordingly to principles and procedures of good practice and nor that worked in the past

14 Organisational structure Span of Control (Average)
Org design tests Span of control evaluate the manager in relationship to the number of sub-ordinates. Detailed below is the span of control depicted according to business function and then according to business unit. One of the current organisational structures show a span of control of more than 10 individuals hence the current Debswana structure is excessively deep in comparison to better practice standards which is approximately 1:7 Organisational structure Org Levels (Levels of Mgmt) Span of Control (Average) No. Span > 10 (Max) HR Overall – Jwaneng 1:8 1:2:2:2:2:1:2 HR Overall – Orapa 1:9 1:2:3:2:2:2:2 HR Overall – HQ 1:7 1:5:3:1 FIN Overall – Jwaneng 1:6 1:5:2:2:2:3 FIN Overall – Orapa 1:4:3:1:1:4 FIN Overall – HQ 1:5:3:2:1:1 SCM – Jwaneng & Orapa 1:6:1:3:6 1 SCM 1:4:2:2:1 Debswana Shared Services Planning

15 Holistic view: Structure follows Process follows Strategy
Strategy evaluation Use BSC as foundation for Strategy alignment grid Easy reference / analysis tool Identify gaps and over focused areas Service delivery beyond implementation

16 Strategy Alignment Grid
People Money Infrastr. Service/ Product 1.2.2; 2.1.1; 2.1.3; 2.1.4; 2.3.1 1.1.3; 2.1.1; 2.1.3; 2.1.4; 2.3.1; 3.2.1; 4.1.1; 4.1.2 1.2.1; 2.1.1; 2.1.3; 2.1.4; 2.3.1; 4.1.5; 4.1.4 1.2.1; 1.2.2; 1.3.4; 2.1.1; 2.1.3; 2.1.4; 2.3.1; 3.2.1; 4.1.5; 4.1.4 1.2.2; 1.2.3; 2.1.4; ; 4.1.6; 4.2.1; 4.2.2; 4.2.3; 4.2.4 1.2.2; 1.2.3; 2.1.4; 2.2.2; 4.1.2; 4.1.3; 4.2.4; 1.2.2; 1.2.3; 2.1.1; 2.1.3; 2.1.4; 2.2.2; 3.3.1; 3.3.2; 4.2.3; 4.2.4 1.1.2; 1.2.2; 1.2.3; 1.3.3; 2.1.1; 2.1.3; 2.1.4; 2.2.2; 4.2.1; 4.2.2; 4.2.3; 4.4.4 1.1.1; 1.2.1; 1.2.2; 1.3.1; 1.3.2; 1.3.4; 3.2.1; 4.1.4; 4.1.5 1.2.2; 1.2.3; 4.1.2; 4.1.3 1.1.1; 1.1.3; 1.2.2; 1.3.1; 1.3.2; 2.1.2; 3.1.1; 3.1.2; 3.3.1; 3.3.2; 4.1.4; 4.1.7 1.1.1; 1.2.2; 1.3.1; 1.3.2; 1.3.3; 1.3.4; 2.1.2; 3.1.6; 3.2.1; 3.3.1; 3.3.2; 4.1.4; 4.2.1; 4.2.2; 4.2.4 1.1.3; 1.1.4; 1.2.2; 1.2.3; 1.3.4; 2.1.1; 2.1.4; 2.3.1; 3.1.1; 3.2.1; 4.1.5; 4.1.6 1.1.3; 1.2.2; 1.2.3; 2.1.1; 2.1.4; 2.3.1; 4.2.4 1.1.3; 1.1.4; 1.2.2; 1.2.3; 2.1.3; 2.1.4; 2.3.1; 3.1.1, 3.1.2; 3.3.2; 4.1.7 1.1.3; 1.1.4; 1.2.2; 1.2.3; 1.3.4; 2.1.1; 2.1.3; 2.1.4; 2.2.1; 2.2.2; 2.3.1; 3.1.1; 3.1.2; 3.2.1; 3.3.2; 4.1.6; 4.2.4 Pull Push Support The EAG provides a significant input to strategy formulation. When the four ‘process structure’ issues (PPIS, see earlier) are juxtaposed with the four Context Domains (4M’s, see earlier) to regulate the application of Expit information, they form the Expit Alignment Grid otherwise known as the EAG. The sixteen cells of the EAG provide a focus on complete strategy formulation. Improve

17 Holistic view: Structure follows Process follows Strategy
3rd generation business processes Defined as Management and Accomplishment processes Service delivery beyond implementation

18 Holistic view: Structure follows Process follows Strategy
Maturity assessment Defined with the 5 levels of maturity Service delivery beyond implementation

19 Holistic view: Structure follows Process follows Strategy
Level 3 (Defined) (Processes have been defined and documented) Average rating on Level 3: 2.92 Question Score Comments Have all the triggers been properly documented 3 Not all Have the triggers been documented according to the CPX standard Suppliers of the triggers/events have been identified and documented 2 Not formal, need to be formally defined & documented Quality criteria for all events/inputs have been defined, documented and communicated (Is supplier aware of the criteria) 2.5 Have all the results/outputs been properly documented Have the results/outputs been documented according to the CPX standard The clients that receive the services/products have been identified and documented Quality criteria for outputs have been defined and documented (does this align with client requirements) Service delivery beyond implementation

20 Holistic view: Levels of Accountability (LoA)
Levels of Work (Levels of Accountability) are a framework that clearly distinguishes the various types of work and accountability required in any organisation. All roles in the organisation fit into one of these levels, and the clear accountability of each level enables clarity of roles. Service delivery beyond implementation

21 Holistic view: Levels of Accountability (LoA): Levelling Model
I Shape 6 Enterprise Strategic Leadership I Influence 5 Organisational Strategic Leadership I Integrate Functional Horizontal Leadership 4 Functional Value Chain Specialisation LEADERSHIP PIPELINE SPECIALIST PIPELINE I Optimise Tactical Leadership 3 Tactical & Practice Area Specialisation I Manage Service Delivery Management 2 Service Delivery Specialisation I do 1 Service Delivery & Quality Orientation Transactional Specialisation

22 Holistic view: Levels of Accountability (LoA): Themes of work
Level of Accountability Themes of work 6H Enterprise Vision & Strategy Formulation and Influence 6L Enterprise Strategy Formulation and Influence 5H Organisational Strategic Leadership - Multi Operating Units 5L Organisational Strategic Leadership - Single Operating 4H Functional Leadership: Multi Value Chain Integration 4L Function Leadership: Single Value Chain Integration 4S Functional Value Chain Area Specialisation 3H Tactical Leadership: Multi Practice Integration 3L Tactical Leadership: Single Practice Development 3S Tactical and Practice Area Specialisation 2 Service Delivery Management: Process (Manager) 2S Service Delivery: Processes Area Specialisation 1TL Service Delivery Co-ordination & Quality Orientation (Team Leader) 1S Quality Orientation : Transactional Specialization 1M Quality Orientation: Transactional Value and Knowledge Worker 1L Quality Orientation: General Worker

23 Holistic view: Levels of Accountability (LoA)
Application of LoA Service delivery beyond implementation


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