Redesigning commercial teams

In a quieter market, such as many markets are experiencing right now, the shape and scale of your organization should be on your agenda for review.

 When we have worked with companies looking at organization structures, we often find that there is a degree of legacy baked into the design, reporting lines, and roles & responsibilities of many organizations. The barriers to redesigning an organization particularly one that runs well are significant. There is the potential risk of disruption to customers, confusion and concerns among employees, and the potential cost of any restructuring.

 The thought of upsetting the balance of how an organization is running can be sufficient justification for many companies to defer indefinitely any review of the org structure.

 In a growth environment the opportunity to refine and streamline an organization is frequently overlooked. A slower market provides a strong case for taking the opportunity to look at the org design.

 When looking at the design of an organization we always recommend starting with a blank page. We look at the markets that the organization is working in, the strategy and the complexity of the customer base. We look at the geographic spread of the manufacturing units and the customer locations.

 It is very important to keep all names of current managers and employees off the page and out of the discussion. This is key to a strong design approach. The structure should begin with a logic that is not built around personalities or individual’s specific skill sets.

 Look for functions that interact, look at the interaction points.  

 Look for levels of responsibility. Look at the size of the teams and how many people each manager is responsible for. A good guide is to have 7 – 10 direct reports. If a management position has two or fewer direct reports, you probably don’t need to be compensating a manager to manage those two people only and should look for a wider net of direct reports.

Build the org design with a small group of critical and high potential employees and managers. Test it with each other, sketch it out on flip charts or white boards and allow everyone to critique the draft proposals. This will minimize the risk of a gap in the deliverables being left unnoticed, will ensure that your key talent buys in to the process and change from the beginning, and gives them an opportunity to take part in the redesign.

 Once the design is set, and the key roles have their deliverables defined, then bring in the existing names of employees and managers and see how they fit in the structure.

 This step can be more emotional and will require critical thinking from the team to ensure that there is a solid coverage of the facts, analysis of observations backed up where necessary with data and prior results.

 At that point, the design is done. The process then moves to an implementation plan that will include communication steps for the employees in the organization, other internal functions, and key external stake holders such as suppliers and clients.

 This approach supports fewer layers and a wider network of reports for each manager position. There are additional benefits to such an approach including faster decision making, greater levels of responsibility and empowerment, these will be looked at in a future blog post.

To close this post, I would like to highlight that reviewing an org design does not require restructuring and reduction of employees, although it does provide an opportunity to look at the number of employees compared to the deliverables and expectations set for the short term targets (the year) and the strategic goals, typically 3-5 years. In a slower market such as we are seeing in 2023 cost productivity initiatives can support the business performance to offset any shortfalls in top line revenue.  

Julian Cass

February 2023

This blog post represents thoughts based upon our observations and experiences. It is written to be thought provoking and not intended to be acted upon directly. If you would like to discuss your specific scenario or would like to know more about how we can help with creating & implementing revisions to your organization design, or a new design from scratch, contact us here