Competing through organisational design
The world is changing in some fundamental ways that require a rethinking of many, if not most, organisations' design. Most organisations are reformulating their strategic positioning which requires a consequent rethinking of their design. Crafting the operating model of an organisation is one of the actions making up the portfolio of key tasks that have to be performed by management in an organisation.
It is widely recognised that the way an organisation is designed has a profound effect not only on an organisation’s ability to execute its strategy successfully, but also on optimal resource deployment and utilisation. The efficiency of its mode of working, the conduciveness of its culture and dynamics, consequently, on its overall performance and ultimately on the organisation’s continued sustainability. One can indeed compete by design.
OD can only be ignored at the peril of the continued effectiveness and efficiency of the organisation. For example, a study by the Bain & Company in eight industries and 21 countries found that companies with top quartile operating models — clear, robust, fit-for-purpose designs — had a five-year compound average revenue growth that was 120 basis points faster, together with operating margins that were 260 basis points higher, than for those in the bottom quartile.
A fit-for-purpose OD capacitates an organisation to compete effectively through its design, because it serves to ensure a best fit between the organisation and its context, now and going into the future.
Additionally, an appropriate OD can help an organisation to:
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