Posted by John Ellen on September 4th, 2018
This article was published in the July Issue of NZ Management Magazine.
The way a business is structured and operates will go a long way towards its success. Of course, when an organisation grows, it can be tricky to work out who should be doing what. Should this factor be based on skills or in-line with what customers are demanding? This is when organisational modelling can be implemented.
Organisational modelling is the art of taking the accountabilities that must be met by an organisation and developing logic for the distribution of these among the constitute parts.
There is one element every organisation needs - structure. It doesn't matter whether you're a small business with a handful of employees or a multi-faceted council with countless departments, the more structure and process in place, the greater chance of success.
With this in mind, organisational modelling might be the best way to approach growth and change.
What is organisational modelling?
Organisational modelling represents multiple parties with different purposes where each team has its own goals and objectives. Most organisations have an organisational chart, where there are clear reporting lines and hierarchy. However, in modern businesses where growth is inevitable, this isn't always the most ideal way to holistically look at structure and process.
Instead, organisational modelling represents multiple parties with different purposes where each team has its own goals and objectives. This system helps to show how these teams interact with each other and the external environment. As a result, organisational modelling splits responsibility and allocations across a team. As such, they can take greater ownership of their purpose and relate tasks more closely to what is happening outside the organisation. This could be based on what skills and expertise a team has, geographical areas or even the needs of the customer group.
Organisational modelling - a case study
A good example of organisational modelling is in the form of a council. With this entity wide-reaching and multi-faceted, there are countless people doing different tasks. The challenge for a board or a CEO is to ensure the right people are doing the right tasks for the right result.
For simplicity, a council can be broken into three core outputs - regulation/democracy, infrastructure and community services. The rules let us live together, the infrastructure makes it possible to live there and the community services make it nice to live there.
When an entity starts to understand its core deliverables, it forms the basis of an organisational model. In the council example, if an issue around dog control or public toilets cropped up, it's easier to work out what output is most responsible for the issue. Topics could come up across multiple outputs, but the structure in place will help determine the right solution.
Of course, behind each output are different measures of success. For example, following procedure will be important around regulations, good engineering around infrastructure and positive engagement around community services.
Basically, we have different ways to build our model. Instead of having an organisational diagram that says this task needs to go to community services because that team has fewer people, this model is logical and decides where tasks go based on other metrics.
While these three outputs are siloed, there can be departments that are spread across all. For example, corporate services such as IT and administration will be required across the board. Below this, sits people, customers and communications who aren't embedded in these departments, but can still provide important HR and customer service processes. This is an organisational model. It describes what the teams are and how they both work with the community and internally.
We help clients use coloured organisational models to understand the core purpose of their teams and how they work together.
Over several years, we have developed a unique process for organisational models. For example, there's a colour coding system (Organisation Model Drawing Conventions) that allows business leaders to have a more holistic view of their organisation and who's responsible for what. With the model and conventions together, the story can tell itself and be a blueprint for the future.
One of things I can tell from the council example is that the communications team is not accountable for external communications because it's marked brown (internal). Therefore, the green teams are responsible for external communications. We help clients use coloured organisational models to understand the core purpose of their teams and how they work together - a more rich flavour than the typical organisational chart.
Overall organisational modelling can ensure that a business is structured and operates in a way that ensures long term success.
Find out more on organisational modelling and how Strategic Pay can help by getting in touch today.