“Organizational design is a process for integrating technology, people, and information within an organization. It is used to enable the physical organizational form (people, technology, processes etc) achieve the stated goals or strategy of the organization."
It is is more than just structures. It is having policies and strategies that are aligned with one another. When this is achieved, it allows organizations to operate at maximum efficiency and achieve Operation Excellence.
Organizations use several frameworks for effective strategy implementation. Here is Star Model Framework which is used by most of organizations to overcome negatives of any structural design and successful strategy execution. This model consists of 5 major components.
1. Strategy. This component is the company’s formula for winning. It is the goals and objectives to be achieved, as well as values and missions to be pursued. It defines the basic direction of the company.
2. Structure. The second component, the Structure, determines the location of the decision making power. It is placement of power and authority in the organization.
3. Processes. If the structure is skeleton of organization, processes are its functioning. Management processes are always designed around a workflow be it new product development or customer service experience , Process is an integral part.
4. Rewards. Rewards are recognition that influence the motivation of people to perform and address organizational goals. It becomes effective only when they form a consistent package in combination with other design choices.
5. People. People is the fifth component that focuses on influencing and defining an individual’s mindset and skills. It looks into the human resource policies of talent, learning and development of people needed by the organization to achieve its strategic direction.
Being OD Specialist ask your leadership team below questions.
Is what we’re doing clearly linked to the strategy? Do we have the right people and are decisions being made at the right level? Are we ensuring rewards in place for teams if they succeed? Do we have required skills in departments ? By asking these questions, using the Star Model as a basis, you can identify issues and can resolve them to achieve desired results.
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