
For a variety of unrelated reasons, this seems a great time to do an Organization Redesign and take a relook at the Structure of your Organization. 4 key trends that are causing this unique situation are :
The global Economic Downturn - this is the "Elephant in the room" issue that is having every organization re-evaluate its strategy & more pertinent, its Overhead expenses. The reasons are clear, but placed together, they are a heady cocktail.
1.The credit squeeze has increased cost of doing business for viable firms & the less viable ones are simply getting bankrupt.
2. Consumer spending / confidence is very low. Demand for products & services has tanked.
3. Inflation in commodities has shrunk Profit Margins, especially in the Manufacturing sector
All this means that men in dark suits & grim faces are prowling with sharp scissors, looking for savings.
The recent era of New Managers - The last five years, since 2003 have seen fairly sharp growth globally - a lot of it being driven by expansion, consolidation (read Mergers & Acquisitions) and growth in emerging markets, all this with the famous War for Talent. During this phase, a lot of new managers have taken up roles with relatively smaller spans of control. This has led to some structural inefficiency that is eating into preciously small margins & making the business respond slower to changes.
Organizational Response to Managing Complexity - Strategic Choices by companies have led to significant complexity. (Read the McKinsey Quarterly article http://tinyurl.com/42r9ey on this). The other BIG factors that have increased complexity is Technology interfacing with Business & Talent in ways not seen before. In fact Web 2.0 itself is probably going make significant disruptive changes in the way we manage People & Organizations (Read the Fastforward Blog on web 2.0- http://tinyurl.com/4splzx )
Growth focussed last 5 years - Most Organizations either execute well in the present or adapt for the future. Very few do both well. As organizations are getting a wee little breather from the scorching growth of the past few years; this is a good time to reflect on the synergy between the Organization Strategy & Design.
(Read Eric Beinhocker's book Extract - The Adaptable Corporation - http://tinyurl.com/3zket5 that talks about this)
So what does all this mean ?
In my view, simply that there are a whole host of reasons that will compel the Organization's architects & leaders to review the design. Its one of the more painful & clearly un-glamorous aspects of Organization Strategy. However, those who take this opportunity to review & perhaps tweak their Org Designs will be more nimble when the upturn starts. As an optimist, I will put my neck out & place a small bet that the economic situation will improve by Quarter 3 of 2009 -
Till then,
Happy Tinkering !!!
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