5 Ways to Design an Organization for Maximum Potential
In today’s business climate, the design of an organization must account for many factors to work both efficiently and effectively. Yet there is no universal way to design organizations, let alone achieve optimal results.
One complication is that new organizational structures, processes, and tools can lead to lost productivity, employee disengagement, and pose serious threats to profitability.
Though a somewhat risky undertaking, designing an organization for maximum potential — one that thrives in the face of uncertainty versus simply surviving — is a smart hedge against disruption.
The good news is that organizations don’t have to look too far for guidance on how to achieve this. They can start with their most precious asset: their people. Yet having the right people in the right roles is only a subset of organizational design.
If you’re embarking on an organization design process, you should build employee engagement into your model. By having employees directly engage in the process, you’re illustrating, by example, how important your people are and how much they are needed to make the organization thrive.
And by the time the organization design process ends, you’ll have engaged employees bringing positive impact. “Engaged employees can help your organization achieve its mission, execute its strategy and generate important business results,” according to a 2011 report from the SHRM Foundation. When this compounds across teams, it will realize a reinvigorated workforce.
With that in mind, here are five ways you can design an organization for maximum potential by starting with your employees.
1. Align Core Values to Core Decisions
We often hear companies that excel have a set of values that differentiates them from their competition, where brand-loyal customers make buying decisions based on the perception of the company they are buying from. By aligning with shared beliefs, they believe their purchase carries a purpose.
The same is true for your employees. Candidates seek workplaces that align with their values and employees stay loyal to companies where their values are reflected in their work, which motivates them to share their skills in meaningful ways.
Whole Foods is a great example of this. CEO John Mackey has put the company’s core values as central to its business model, which is seen in everything from its products to how those products are delivered to consumers to its sustainability practices. Being mission-driven has helped the company achieve sustained growth despite economic turbulence.
Aligning your organization’s core values to core decisions — about your products and services and your people and culture — matters. So if employee wellness is one of your values, don’t just say it, show it. Don’t offer unlimited paid time off and create a culture where people are afraid to take a vacation. Instead, match what you say with what you do.
A values-centric approach means communicating and behaving in the business as one sees the business. Modeling authenticity internally will not only impact your employees but will also naturally translate to your customers and clients.
2. Improve the Quality of Work Opportunities
It’s no secret that being a world-class organization means attracting, hiring, and retaining world-class talent. And world-class talent usually demands to work on interesting projects and wants high-quality work opportunities. Gallup research, for instance, shows that 87 percent of Millennials rate “professional or career growth and development opportunities” as important to them in a job.
One way to offer higher quality projects is to create a dynamic self-organizing and self-managing team based on project and collaboration needs. When leaders complain about employee attrition, perhaps they should look at their internal structure; a hierarchical one may not work for their growth goals. When employees get placed into positions with low growth opportunities and feel stuck with routine work, they start looking elsewhere.
Consider W.L. Gore & Associates as an example. The manufacturing company, which has consistently placed on Fortune’s 100 Best Companies to Work For list, relies on self-managing teams to innovate new ideas and products and has been known for a culture that is as imaginative as its products, as Fast Company shared back in 2004. Their innovation projects become a core part of everyone’s role, leading to higher employee engagement and overall work satisfaction.
So take the time to invest in developing exceptional work opportunities, and ensure that when new projects get created and assigned, they are high quality from the perspective of your talent. You’ll benefit from employee retention, productivity, and engagement.
3. Increase Opportunities for Employee-Driven Innovation
In a 2019 study, McKinsey found that innovation performance is strongly and positively correlated to financial performance. If that correlation is as strong as McKinsey suggests, investing in employees to develop their innate innovation talents is not only valuable but likely a very profitable endeavor.
To succeed, create a strategy for employee-driven innovation. This strategy needs to be clear about why innovation is important, there needs to be a framework for it, and employees need the training to identify their strengths and opportunities to reveal and offer their contributions.
As Natalie Turner, author of Yes, You Can Innovate, shared with the Innov8rs corporate innovation community: “People need to know where they can best contribute to the innovation journey. They need to be able to generate ideas that match market opportunities and then be able to drive them into implementation.”
4. Encourage a Workplace of Wellness
Employee well-being has emerged as a key area of focus for many leading organizations today. It’s not only good for the workforce, it’s good business. Workplace stress costs U.S. employers around $200 billion in healthcare expenses every year, according to McKinsey.
While it’s no surprise that workplace wellness can lead to increased productivity, higher morale, and better bottom lines, how can this be achieved in a largely remote workforce?
The key is to start simple. If you provided free lunches as a work benefit, shift to offering subscriptions to mindfulness apps like Headspace. Once the basics are covered, move to something bigger, such as redesigning employee incentive plans to achieve employee wellness objectives. One way to do that is tying health insurance premium reductions to the outcomes.
Johnson & Johnson took that approach: It started offering a $500 discount on health insurance premiums for employees who joined its wellness program. The result? A 90 percent increase in participation.
5. Adopt and Evangelize an Agile Mindset
As the business climate changes at a rapid pace, great leaders are seizing opportunities to optimize the evolving normal they find themselves in.
Some are looking to past successes to guide present and future approaches to running their organizations, often bringing unconventional approaches designed to help their workforce become change-agile. These leaders know they have the best possibility to reinvent and reinvigorate their organization.
PepsiCo is a great example of this. In 2018, its Central and South America (CASA) division launched an agile mindset initiative focused on “self-organizing teams.” The intention was to help employees maintain a work-life balance while quickly addressing customers’ needs. By promoting less formal work structures and evangelizing creativity and cutting-edge customer success models, the company built momentum that made for effective and efficient use of employee time and contributed to the bottom line in terms of profitability.
Reaching Your Organization’s Maximum Potential
It’s important to remember that not all of these ideas need to be undertaken at once. An incremental approach tends to achieve the best results when it comes to organizational change. Start with one idea. Be sure to include your employees in the process. Over time, adoption from internal stakeholders will occur, and rolling out the next initiative will be an easier undertaking.
As each initiative becomes infused into the workplace’s design, culture, and outward efforts, external rewards will be realized. Only then can the door be unlocked for profitability and sustainability to occur, and maximum potential realized. In the end, the effort will have been worth the risk and your organization will stand out among your employees and your customers.