Organisation is defined as a group of people working towards a common goal to deliver value to the customers. To explore the fundamentals of an organisation, let us define organisation in terms of capabilities. An organisation is an amalgamation of capabilities in terms of people, processes and systems, to deliver products and services to customers. Again, these products and services are also capabilities. After all, why would anyone buy a product which doesn’t add/deliver any capabilities to him/her.
Any new organisation that is coming up must be very diligent in answering these three questions. (1) Who is my Customer? (2) What is the Product? and (3) How am I going to deliver it? The exercise carried out by an entrepreneur or by a management to answer all these questions amounts to organisational design. These three questions are like the three legs of a stool, one affects the other two. In other words, ‘Organisational Design’ refers to the scientific selection and assembling of people capabilities, process capabilities and system capabilities to deliver the right product to the right customer. An organisation may have several objectives, but this one objective is fundamental to all other objectives. If this one objective is delivered effectively and efficiently, all the other objectives are taken care.
Is the organisational design a one-time exercise? Not at all. As the internal and external environments change, organisations must revisit its design to bring equilibrium with the internal and external forces and that is continuous improvement in organisational design. As and when the management feels that the original design is not supporting the organisation, this exercise must be carried out or it could be audited once in a year.
Any organisational design is specific to a given capacity. As the capacity requirements change either it may result in alterations incapacity or a complete redesign may be required, but both would be called as organisational design. For example, a company would like to manufacture 100 kg of raw sugar per day. For this, it may have to crush 1000 kg of sugarcane per day (10% yield). This may be done with simple equipment. But if the same company would like to manufacture 250 tonnes of raw sugar per day then it must crush 2500 tonnes of sugarcane per day. This requires a complete redesign of this organisation. By adding multiple 100 kg units to achieve 250 tonnes will prove to be an inefficient design.
The organisational design and continuous improvement are performed by Certified Business Analysts, either they may be working within the organisation or they may be hired as a consultant. The list of activities performed by the business analysts under ODeCI are below:
Recognizing the symptoms and problems of the customer | Customer and market segmentation | Define the solution and product | Define Vision, Mission and Values of the organisation | Draft the job descriptions (people capabilities) | Develop the primary, secondary and management processes (process capabilities) | Prepare the process maps | Identify the infrastructure, software, machinery etc. (system capabilities) | Define organisational policies and Establish the Standard Operating Procedures (SOPs) | Develop Business Model Canvas.
If you are interested in Organisational Design and Continuous Improvement Services of Fhyzics, please email us at cs@fhyzics.net.
About Author
Venkadesh Narayanan is the Principal Consultant at Fhyzics Business Consultants Pvt. Ltd. with over 25 years’ experience in business consulting, business analysis, process improvement, supply chain and new product development. He is a mechanical engineer and an MBA worked for several organizations in India, USA and Canada prior to joining Fhyzics. He is a former Indian Civil Servant [IRAS 2000 Batch] and served in Ministry of Railways, Government of India. You can find some of the videos of Venkadesh Narayanan on various topics in our YouTube Channel Business Analysis Digest and also feel free to connect with him through LinkedIn.
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Keyword: Organisation, Organisation Design, Customers, products, Entrepreneur, Amalgamation, Legs of a stool, Objective, Infrastructure, Scientific Selection, Environments Change, Equilibrium, Capacity, Certified Business Analysts, ODeCI, Marget Segmentation, Organisational Policies, Standard Operating Procedures, Business Model Canvas.