What challenge(s) do our clients face?
Business strategists and corporate leaders face a unique era where the business landscape is being disrupted by radical digital transformation and new business models are overlapped with an important generational change in consumers and employees
To thrive in times of change, organizations need to continually evolve their business model and strategies. This may be through the development of new products/services, expansion to new geographies, or integration of new technologies for example. However, in the shift towards these new models and strategies, old ways of working may no longer work. Indeed, they may in fact hinder progress and generate inefficiencies.
Integration believes that organizational design and the governance model are key aspects to support the organizational strategy and culture and, for this reason, they must evolve and be reviewed whenever there is a change in these areas. Depending on the size of the change, revision of the organizational design may be necessary within the entire organization or in specific business units and/or areas.
However, it is not a trivial task to define an organization model that guarantees efficiency in the processes and decision making of a company. Many challenges and trade-offs need to be evaluated, such as:
- Efficiency and flexibility in the day-to-day vs maintaining visibility and control
- Integration vs autonomy and associated authority limits
- Pace vs risk management
- Career paths vs project orientation
- Matrix vs siloed structures in team cooperation
- Coexistence of traditional structures with flexible and agile teams
- Multifaceted roles vs specialized roles
How do we help?
Our methodology helps our clients to define an efficient organizational structure, that supports decision making and is aligned with culture and business strategy.
Finding the correct balance considering these trade-offs requires a tailor-made solution. We believe that each organization has a specific DNA and is made up of unique individuals and teams and has specific needs. There is no ‘one size fits all’ package of deliverables in this context and so we help organizations answer varied questions such as:
- Which organizational model is best considering the strategy defined?
- How should the business portfolio be organized? Which areas must be stand-alone and which areas must be part of a shared services center?
- What kind of governance is required in this new organizational model? Which rituals need to be established?
- What should the decision-making model and authority limits be?
- What profile and competencies are needed for each position?
- What should be the size of my organization and the ideal span of control of each area?
- What are the steps to conduct the organizational structure transition? How can I be prepared for the main risks and challenges?
What are the benefits?
- Establishment of an organizational model that enables the business strategic objectives, reducing internal friction and improving productivity.
- Greater alignment between stakeholders, structure, processes and governance, increasing the likelihood of delivering the desired/planned business results.
- A clear and efficient decision-making model
- Improvements in both direct and indirect costs
- Ability to leverage hybrid structures, which take advantage of the benefits of merging more fixed/traditional structures, with more flexible/agile structures
- Clarity of competencies required to support the strategy and sizing for each organizational function
- Reduced resistance during the organizational model transition as a result of clear communication and detailed transition planning adherent with client reality
How does it work?
Across the project we aim to balance important trade-offs which are authentic to your context and needs (e.g. centralized vs. de-centralized, streamlined vs. customized, downsizing vs. investing, control vs. bureaucracy).
Our methodology goes through 4 steps:
We start our approach with a deep understanding of the company strategy and culture and of what motivates the organizational adjustments. This gives us the key drivers which inform our approach e.g. If the company needs to strengthen its digital capabilities to address a new market, we may look to the capabilities which are currently missing and whether a new area is required to centralize product innovation. Our ability to connect with other experts across Integration’s practices is a key differentiator in this context.
From here we define, alongside the client and considering its context, the organizational architecture and governance model in the detail level that is needed; designing rituals, committees, authority limits, macro policies, procedures, structure sizing, job descriptions etc. This is followed by a pragmatic implementation plan to actually embed these changes in reality and without disruption to the company’s operations.
A large Financial Sector organization (supporting more than 100,000 direct and indirect jobs) was undergoing an expansion process driven by market shifts and changing customer habits; and was looking to new product platforms and customer segments.
They were transitioning from being a mono-product company serving a single client segment into a multi-client and multi-product one; and asked Integration to support with a new organizational model to help them with this new dynamic.
Based on the understanding of the company’s strategic plan and the identification of key success factors, Integration helped define a ‘customer-centric’ organization model that would help drive the company’s expansion into new clients and products.
Alongside the client, we defined the necessary business units and the governance between them; detailing for example, the information exchange processes and decision-making limits, ensuring the necessary autonomy and compliance of each area and business unit (key for this regulated market).
We also designed a 3-phase transition plan which aimed to ensure no harm to business continuity, going first through hierarchical changes, into structure adjustments and finally with professional/job profile adjustments.
The direct result was a faster decision-making process, the independence between structures to enable the expansion of the company to new segments, and the clarity of roles and responsibilities, which brought a higher service level of corporate areas and helped to increase the time to market.
One of the largest private equity funds in Latin America made a major investment into its infrastructure business, expanding its portfolio to three companies. The main challenge was to design an Organizational Model that would that would give the PE flexibility to incorporate and disincorporate companies and capture synergies between them.
Integration undertook a wide consultation process to further deepen our already strong understanding of the dynamics and typical organizational structure of businesses in this industry. This involved interviews and group discussions with the client and the teams of the investee companies, discussions with external experts (and ex-executives) and benchmarking of main competitors.
We brought to the client a range of suitable options which considered their strategic goals and allowed them to decide between certain trade-offs such as internal cost vs risk appetite.
As a result, we were able to agree on a new structure, which facilitated strategic supervision of the companies and gave autonomy to execution. This structure was costed and proved able to benefit the client in terms of scale gains and flexibility to incorporate new companies – a key requirement for their growth aspirations.
We defined a governance model, new roles and responsibilities and main committees that allowed an exchange of knowledge between their portfolio companies, supporting best practice adoption and faster decision-making.
A family business in the health sector had recently passed through a moment of CEO succession, with the founder going to the Shareholder’s Board and his heir assuming his position.
Historically the business had been run guided by trust and reliant on the strength of various key professionals. Here, the challenge was to define the structure needed for the company’s aggressive growth strategy, which included an expansion to other regions, a technological transformation, a new business model, and preparation for an IPO.
Integration supported with 3 work-fronts.
- In the first, we evaluated all existing functions and identified the ideal org chart and architecture, ensuring a power balance between business units and positions.
- In the second, we worked with the client to redesign and detail the entire governance model, ensuring a decision-making process cascading from the operational base to the Board of Directors and Shareholders. We defined KPIs for the different levels and detailed rituals to guarantee the visibility for managers, directors, and Committees and to link them to important processes, such as budget and purchase decisions, strategic planning, etc.
- In the third, we detailed a transition plan for the structure and job profiles, evaluating the tenure for family professionals to exit, the competences/functions that needed to be contracted in the market, and the development of successors – considering internal and external market professionals.
The IPO process was very successful, in which the high internal organization was a key strength to show formalization of standards, clear compliance and governance to the market.
The company implemented the transition plan as designed, and through the training and competences embedded, they have been able to constantly evolve being recognized as a high-performance option in the stock market.