An organisation chart made of blocks, with an orange block at the top

People and organisationOrganisational design

An organisation that fits your strategy

Organisations tend to grow around people and habits, not around their strategy. The Next Organization designs your organisation around the direction you have chosen. That means structure, roles and decision rights, so decisions are made in the right place.

Sound familiar?

Everything ends up on the managing director's desk
Strategic plans have no owner and end up in a drawer
Departments work alongside each other instead of together, and tasks are missed
After a merger or acquisition, teams still work their own way
Decisions stall because nobody knows who makes the call
Growth has outpaced your current structure

You are not alone in this. Almost half of business owners say their organisation has become more complex than their processes and systems can handle.

Structure follows strategy

"Structure follows strategy", wrote business historian Alfred Chandler. An organisational structure sets out how work is divided, who decides and how teams work together. So there is no single best structure. The right choice depends on what your strategy demands.

From structure to roles and decision rights

Click a structure to see its organisation chart

Functional, by discipline

Example organisation chart

When it often fits

A single core activity, with a focus on efficiency and expertise

By market or customer group

Example organisation chart

When it often fits

Customer groups with very different needs, and a strategy built on being close to the customer

By product or service

Example organisation chart

When it often fits

A broad portfolio in which each line has its own development and margins

By region or country

Example organisation chart

When it often fits

International growth with local differences in markets or regulation

Matrix

Example organisation chart

When it often fits

When expertise and a focus on market or product both carry weight, and you are prepared to have people report to two managers

Group with shared services

Example organisation chart

When it often fits

Several brands or companies that gain the benefits of scale together while keeping their own identity

A new organisation chart on its own changes very little. The organisation only starts working differently once roles, decision rights and meetings are clear.

Ownership: one owner for each strategic goal, with a roadmap of actions
Decision rights: what each role can decide on its own, for example up to what amount
RACI: for each core process, who does the work, who decides, who is consulted and who needs to know
Meetings: which meeting decides on what, and who attends

A different design often also calls for changes to your Processes and your Culture and leadership. The people and skills the new roles call for are worked out in your People and HR strategy.

What you get

You get a structure that fits your strategy, with a clear organisation chart. Everyone knows who decides what, and the management team has time left for setting direction. You also have a transition path, so the new design takes hold in day-to-day work.

Frequently asked questions

Which organisational structure suits a growing business?

That depends on where your growth comes from. If you are growing with the same offering, a functional structure often works well. If you are growing through new markets or services, a structure by market or product is usually a better fit.

How does a RACI model work?

RACI stands for Responsible, Accountable, Consulted and Informed. For each task or decision, you record who does the work, who is ultimately accountable, who is consulted and who needs to be kept informed. Each task has exactly one accountable role.

How do you introduce a new structure without disruption?

Involve managers early in the design, so they share ownership of the choice. Set out for each role who is responsible for what, and plan the transition in stages. If you have a works council, ask for its advice in good time.

What is the difference between an organisational structure and an operating model?

The organisational structure shows how you group people and teams. An operating model is broader. It also describes how processes, systems and collaboration deliver your strategy.