Organizational Restructuring: Identifying Inefficiencies, Risks, and Opportunities
May 8, 2017 in Change, Transparency, & Communication
By Whitney Huskey
Spring is here and the Federal hiring freeze has been lifted. In its place, the Office of Management and Budget (OMB) released new guidance this month for agencies to reduce their workforce. The document not only requires agencies to submit plans for a reduction in workforce but also for how to optimize employee performance. By following our series on how to remain strategic during these times of change, though, you are going to be well positioned to articulate the human capital plans that most benefit your organization! Last month we introduced “Breaking the Ice: How to Be Strategic Through the Hiring Freeze and Beyond” where we discussed the potential challenges of the recent hiring freeze and budget cuts as well as some recommended solutions to address your workforce needs. While these strategies are beneficial to any organization, we are highlighting them in this context as they can help to address the specific challenges restrictions in recruiting efforts or budgets may impose. In this post, we will take a closer look at the first strategy: organizational restructuring.
Organizational restructuring involves conducting an organizational assessment to identify areas of competence, improvement, and potential risks and applying the findings to inform strategic solutions. By identifying inefficiencies, you can streamline your processes by eliminating redundant or unnecessary programs and focusing your efforts on your higher priorities. The areas for assessment of an organizational assessment are grouped into five principle categories: people, process, structure, technology, and culture within which various elements are evaluated. Research has shown that organizational performance is optimized when these five factors are aligned appropriately to support the organization’s goals and priorities.
Assessing the people within your organization requires an analysis of your staffing levels, required skillsets, and leadership and management. It’s critical that you have the right people, in the right place, at the right time. Some questions you may want to ask yourself include:
- “Do I feel that my employees have the right skills to meet my organization’s goals?”
- “What factors drive the workload of the employees in my organization?”
- “What challenges are we facing to meet our goals?”
Determining where the potential gaps in your workforce are, either in workforce capabilities, staffing levels, or perhaps employee engagement levels, can lead to a variety of insights and potential human capital solutions. Some strategies you can use to address these gaps include a training and development program, a succession management plan, or employee engagement programs, which are topics we will discuss in more depth later in our series.
Unclear procedures can lead to employees making incorrect assumptions about their tasks and inconsistent policies may lead to unnecessary layers of supervision and review, both of which can create inefficiencies. When assessing your organization’s policies and processes, you should focus on four components: efficiency and effectiveness, well defined documentation, consistency, and accountability. If your policies and procedures are not clear, well documented, or applied consistently across the organization, look for opportunities to strengthen and enhance consistency.
The structure of an organization includes governance, functional alignment, and customer service orientation. Is your organization siloed or is there high collaboration? Are there clear divisions of labor, or do multiple teams work on similar types of work? Do decisions require several layers of review to get approval? These are questions to ask yourself when assessing the structure of your organization. Collaboration and interdependency can be beneficial to an organization by fostering a culture where everyone works together and understands the big picture, but if roles and responsibilities are not clearly defined, it can also lead to duplicative efforts and redundant functions. When assessing this factor, look for areas of the organization that may be repeating work or adding excessive layers of governance, leading to a waste of resources. By identifying these areas, you can eliminate duplicative efforts and reprioritize the efforts and resources of your workforce.
Assessing your technology includes reviewing your system’s interfaces and interconnectivity, which will allow you to create an architecture from which you can make future strategic decisions. By knowing which systems feed into others, you will have better insight into future acquisitions and how they may impact your processes or current systems. This part of the assessment also includes identifying your automated processes, which may help you identify areas of opportunity for further automation and, therefore, increased efficiency.
An organization’s culture is embedded into all other aspects of your organization and can have a large influence on how change is accepted and promoted. The trouble with culture is, however, it is difficult to define as includes a variety of factors such as employee engagement, communication, innovation and creativity, and mission, vision and shared purpose. This Forbes article defines culture as consisting of “group norms of behavior and the underlying shared values that help keep those norms in place”. Changing needs and priorities, which may be dictated by new leadership, the shifting needs of our country, or budgetary constraints, have the potential to influence an organization’s culture. Specifically, during this time of great change for our federal government’s workforce, it is important as leaders to determine the desired culture of the organization and strategically promote it through communication and employee engagement activities.
Now that you’ve assessed your organization, identified inefficiencies and areas of opportunity, you are better able to put a plan together to implement initiatives related to people, process, structure, and culture. The next post in our series about how to stay strategic through the hiring freeze and beyond will take a closer look at how you can implement workforce planning strategies to close workforce gaps. Please continue to stay tuned as we highlight additional strategies to use in the months ahead.
Whitney is a Consultant at FMP Consulting with a Master’s in Industrial/Organizational Psychology and experience delivering a variety of human capital solutions to the Federal Government. Outside of the office, she can be found exploring D.C.’s many outdoor activities, including paddle boarding or hiking.