E26 Part 1: A Global View: Mastering Organizational Structure for Growth & Stainability

I'm your host, Laura Perez-Ehrhardt, I'm the CEO of Apprentice Consulting Solutions, and I'm the consultant and executive coach. It's exciting to have you here today, and I'm looking forward to our conversation about organizational design. And for those of you that are chiming in right now, we are recording from Oslo, Norway. Thank you so much, Laura. Thank you for having me. I've been very much looking forward to this. This is going to be a fantastic conversation. Rachel Wilson Rudisham is the founder and CEO of Level Up HR, a renowned expert in strategic human resources practices specializing in culture building. Her influential presence on LinkedIn as a top voice in business strategy and HR consulting is a testament to her expertise. Let's just get right down to it. I read some information through McKinsey Company, who conducted a survey, and here's what they revealed around organizational design. Fifty percent of companies had no objective way to set or assess targets from their design initiative. Forty percent of companies are not talking to their end users during development. That's not a surprise. And 95 percent of executives could not make objective decisions about their design actions. Let's talk about OD, organizational design effectiveness. Organization is driven from the top. You and I know this. And through incentives, matrix, clear roles and goals, it is everyone's job to put the customer at the center of every decision, right? What are the key elements that contribute to an effective organizational design? Is it just the part metal or is it cross-functional talent? I mean, Laura, I think this is the ultimate question. It's a great one, and it covers the whole field in a sense. I mean, I work as a leadership organizational culture design strategist and consultant, and all of these elements are interwoven. And what it comes down to is businesses being able to execute, deliver on their strategy through people. My mantra, my personal mantra has always been creating business results, sustainable business results through people that thrive. And one of the key tools to do that is having an effective, appropriate organizational design. Aligning that structure, that organizational design to the strategy is absolutely crucial for its delivery. We need a design that's going to support the strategy and also enable an environment where people are going to excel and they're going to thrive to create those business results that we need. So it's almost like you create your shared vision, understand your strategy, and then design your organization to make it so, to make it happen. How do we do that? In many ways, right? It's structure, you mentioned, it's talent, and it's adaptability or flexibility. If I think about from an employee's perspective, employees need clarity. They need clear old definitions. They need to understand their responsibilities and the mandate within that. And they need to understand how they fit into the bigger picture. I think that's the one thing I hear almost consistently throughout my career and in multiple different organizations. You know, how do I make an impact? How do I make a contribution? People want to be making a difference. That's largely why people come to work, to contribute to something bigger than themselves. So that element is absolutely key. How do you kind of filter it down, cascade it, bring the strategy to life, make it meaningful for everybody? And then, of course, a big part of how to do that is through communication. Communication, communication, communication, and leadership as being a very important conduit for that. And, of course, the culture, the culture that drives performance, that drives results, that drives innovation. A few elements for you there that you alluded to also in the introduction, but I feel like that's the essence of it for me. So what I hear you say is the key tool to effective OD is aligning it to the strategy. So how do leaders ensure their organizational structure align with their strategic goals? I'm going to do the fact you also mentioned design thinking. I think there's an element of, you know, kind of understanding within design thinking because, you know, for me, that means very much a human centered, creative approach to solving complex problems within organizations. It's about innovation, collaboration, adaptability to align with strategic goals. It's much more than just an org chart, you know, organizational design to enable a strategy to be to come to life. You know, isn't just drawing a nice, pretty matrix or a load of boxes on a Excel spreadsheet that becomes a beautiful PowerPoint. You know, I think the old way was much more to focus on department structures. And then we've seen much more of a shift in organizational design towards the cross functional teams. We know we need to collaborate. We need to get much better at working across the company and leveraging the matrix in a good way, but also breaking down these silos that we're all so familiar with. And then I think the third part is the leveraging of tech and AI, something that I'm really passionate about, the opportunity that tech for good brings us. It's an org design needs to be much more than just functional. So when I say it's not just about an org chart and it's not just about moving boxes, it's about understanding what work is is carried out in a company and how it flows across the organization. And does the structure enable that to flow or does it actually inhibit that to flow? And then we have our leaders that play a really vital role in ensuring that it fits a purpose, ensuring that where there are blockers and barriers, they're helping to break them down. They are listening to employees having that. I mentioned communication, communication, communication, having those forums to allow that to happen, having the feedback loops, having what I like to call a holistic employee listening strategy. It sounds very grand, but, you know, much more than just your annual employee engagement survey where you are listening, you are getting information from the people doing the job to find out, you know, does the design, does the structure actually work? What I'm hearing you say is beyond functionality, right? And you are so spot on when you say, you know, it's important to have a culture of collaboration. It is the responsibility of not just independent departments, but it is a cross-functional focus. And it's really important to also partner and leverage technology within the organization to make this all come together. Let's talk about the challenges that business throws. So this is one of the big deals when it comes to organizational design. There's a saying, first to scale beats first to market. Adopting a design-driven culture involves significant transformation. However, in our experience, Rachel, it shows that these changes are both achievable and invigorating. Revitalizing an organization as we work together to embed innovation, customer satisfaction are at the core of their operations. Let's talk about common challenges companies and their leadership face as they scale up. In your opinion and your observation, what are some of those issues? I do find it really invigorating. I love that word that you use because there's so much potential here. There's so much opportunity. And at the same time, it's an absolute necessity because as cliched as it is, change is the only constant. And, you know, we have to keep pace with it or abreast of it and ready for it. You know, you mentioned growth. I almost feel that growth outpacing organizational design is almost what I see in every company I work with. A little bit of that is probably because of the macro picture that we've seen in the world. You know, we've had a global pandemic. You know, we have wars going on. They have significantly altered the landscape for organizations. Therefore, many businesses just haven't been fit for purpose anymore because they have these old business models. And I think as companies grow and scale or pivot and adapt based on the market that they're operating, what they struggle with is these old legacy models, designs, legacy technology, not least. A lot of the challenges that I see at clients of mine, you know, both in the Nordics and across Europe, is maintaining that agility, which maybe once made them really successful as well. You know, the smallness, the flat structures, the agility, the ability to move quickly, and also preserving the culture as they grow and as they add talent and grow headcount. And then, of course, there's an element of as you grow, you can become more complex. You want to grow and maybe add, but you don't want to create silos or bureaucracy. A necessity of growth is often for a smaller company adding structure. But how do you do that without adding bureaucracy? How do you grow and remain cohesive and collaborative? And how do you avoid diluting what you have, you know, from a starting point? I'm thinking more along the lines of a smaller business, although a lot of the work I do is with large corporates. But I think it's maintaining that agility. Sometimes it's – or oftentimes it's letting go, from a leadership perspective, letting go, empowering others around you and beneath you to be the decision maker. Because you can't have your finger in every pie. You can't be involved in every detail and minutia. And then that brings me to talent, your talent strategy and talent acquisition, hiring the right people. And that doesn't necessarily mean culture fit. I'm much more interested in culture add with all that means from a diversity perspective, being able to harness diversity and make it successful. What I'm thinking is more around values, you know, hiring for people that will buy into your company, values that will be aligned with your company values so that you can do that, so that you are safe in the knowledge that you can let go a little bit, because you've hired the right people in the right roles. There's a lot of friction, a lot of challenge. I don't think it's an easy job and a lot to consider when scaling, when growing, for sure, but also a massive opportunity and something, as you say, that is really quite invigorating, certainly in the work I do. You know, what I'm hearing is that organizations get caught up in the legacy of their models, past models and designs that are no longer providing them with their current needs. Something else I've heard you say is for leadership and the organization, as they're going through this transformation, as they're growing and looking to scale, they need to stay nimble, preserve the culture, the talent, and empower the stakeholders. That is so true. Leaders, they should know the business but stay out of the day-to-day minutia and let their stakeholders do their job, right? Definitely know what's going on but fingers out. Yeah, and I have a lot of understanding and respect for legacy and what works and concerns around change or rapid change. You want to do things as fast as possible to seize the opportunities and harness the momentum but as slow as possible to make it stick, not increase your risk too much. So I understand where there's resistance, where there's conservatism, where there's been keenness to preserve what works and what's good. So I don't say, you know, you're not doing things without careful thought. But I think there's also reluctance, you know, those with this conservatism, perhaps there is a reluctance just to try things. You don't have to, you know, rip up your whole org chart, throw away your current organizational design. I think managers worry about, you know, changing people's jobs, job descriptions, contracts, employment law. All of this is important. I, you know, I work in employment law as well myself. I'm a true hybrid so I do a lot of work in that space as well. You can make tweaks, adjustments, include your employees as part of how are we making our strategy come to life through the organization and through the design and using the talent that we have. It doesn't need to be rigid. Rigid, exactly. That's the word, rigid or, you know, gigantic. So that, you know, this is maybe incremental changes or maybe testing, you know, back to your point on design thinking and design thinking at scale. An element of design thinking is after you've understood the problem and you're, you know, in alignment with your strategy, you're doing your problem framing, you're doing your ideation, you're doing your prototype testing, and then you're doing iterations. And so you can do incremental changes. You can make changes and go back if it doesn't work, but you can't stand still. Let's talk about red flags around growth. What red flags indicate that an organization's growth is outpacing the structure? And what can leaders do to get ahead of it and take charge? Oh, that's a good one, Laura. So many, so many red flags out there. And, you know, not to dwell on too much, but I remember a red flag that I had, you know, some time ago earlier in my career in a global HR department in a large organization. And it's just a basic thing, really, but it's a good example of where the structure doesn't work and it doesn't enable workflow. We had the recruitment team, the talent acquisition team, and we had the head of comp and benefits. They sat in separate areas of HR. This wasn't a large HR team. The business partners and the talent team, the recruiters, actually didn't have access to salary data, didn't have access to comp and bend information. The very team that needed this information in order to be able to do their jobs, in order to be able to liaise with external headhunters, meant decisions around the right pay level. Quite low level, but very impactful organizational design that just didn't work. It wasn't set up for the purpose. And it meant that not only could recruitment not do their job successfully, but what you've got is inbuilt friction in the structure. What I often see is a lack of understanding and a lack of appreciation around the consequences of getting organizational design wrong. It tends to become personal. It always impacts people. And I think leaders, particularly at the top of the house, they're not necessarily aware or privy to these org structures that just don't work. And these things grow and become issues where they're actually real simple fixes. So there's a lot of opportunity there. I do a lot of work with high-performance teams, with how to make teams more effective, collaborative, and cohesive together. And a lot of the time it comes down to org structure, org design, and workflows. And that, for me, is an example that I've always carried with me because it was so easy to fix, so simple. But there lies the gold, right? There lies a lot of opportunity to fix things. Setting people up for success, giving them the right tools to succeed, it's seldom a person's fault, actually. There's a seldom people, reasons, and issues for things going wrong. It's much more often than not, in my experience, a cultural or environmental source behind organizational challenges. That's where, when I'm working within these organizations, this is where I come in and I tell them, it's not about pointing fingers. It's about fixing it. It's about understanding what those barriers are. To your point, in your experience, or in this instance where HR was limited access of data and it created a barrier for them to do their job, I see that out here in the U.S. often. I scratch my head and stand there saying, you know, how is it that you're not able to access this data? There are certain parts of the organization, this is where the silos come in, that the people that need data are limited. They don't have access. They're not given pass codes. It takes a whole team to realize what the setbacks are and how to implement a more productive and holistic OD and moving the organization forward, going through these changes. The folks at the top of the house, they don't realize what the existing barriers are. This is where it's really, really important to have that collaboration. Invite your frontline folks to the table. Let them tell you what they're experiencing as to do the job they're expected to do. There's no one better to deliver this message than our frontline leaders. They are hearing first thing that's coming up as far as issues and what they need in order to break down these barriers. We're talking about organizational design, strategy, but to your point, communication, communication, communication and OD is not a phase but a continuous iteration, as you've mentioned. It's a process that needs deliberate attention and testing. It's never a one and done. Sometimes throwing pasta at the wall, seeing what sticks and some things don't stick, including continuous communication and strategy. Talk about best practices and approaches to communicating OD effectively as a part of that strategy. It's interesting because you have me reflecting this continuous improvement. They focus a lot on this in Asia, in particular in Japan, with the Kaizen technique, way of continuously improving and being really plugged into the frontline. You call them the worker bees, right? Hear it from the source. I think this is what I mean by this holistic employee listening strategy. Whatever methodology you choose, wherever you are in the world, it's getting and channeling this information back so that you can do something with it. When I think back to my corporate career, which has been predominantly in fortune companies, in investment banking, finance and in tech, I feel that a lot of feedback that's fed up through management and leadership is not necessarily ignored, but I think middle management are often in a squeeze because the amount of times I've heard the expression, I only have a limited amount of silver bullets, because they feel like they can't always do anything with this feedback, with these organizational design issues, with these bottlenecks and these roadblocks, because they have two silver bullets and one of them has to be on client X and the other one has to be on promotion Y. We're not going to get this organization redesigned, we're not going to get this piece of technology, we're not going to get this workflow fixed, even though it's actually the source of an incredible amount of frustration, maybe even burnout, certainly reduced engagement leading to potential attrition, but very hard to scientifically demonstrate above. So yeah, you just got me really thinking of that methodology that I know is used so successfully in Asia and how can we harness this and get much better at this. And I think we have now five generations in the workforce and I really feel at least what I'm experiencing of the newer generations coming in, they have less tolerance for this, they expect things to be fixed, they're not going to stick around while we make a mess of it. The technology we have in our pocket now does a multitude of different things. They don't want to come into an organization using paper, string and glue. Things need to be fixed and they need to be set for purpose. So something that I've noticed around effective communication, I see that leaders typically assume, especially those at the top of the house, that everyone is clearly understanding the why behind the vision and the changes. Not necessarily true. Because if I walk to someone in a certain department, I'm walking to stakeholders, these employees, and I ask them to articulate the purpose of the mission, the vision, the changes, they struggle. When I'm talking to the chiefs at the top, they don't understand why their frontline people are not clear as to what that mission or vision or changes are and the why behind it. Based on your observations, what are some steps that leadership needs to take to articulate this vision or mission or change clearly? And I'm with you on that. I'm in complete alignment. I see it massively. And I think with the best intentions at the top of the house, I think there's a feeling that a really concerted effort has been made to set the strategy and cascade it through the organization. But the organization is large. It's busy. It's matrixed. It's in constant evolution. It gets lost. So that town hall, that great PowerPoint deck, and those roll-ups in the hallways, they're just not sufficient anymore. There's technology now that we can harness to enable strategy sharing and bringing strategy to life to cascade it down so that every employee knows how their work and how their contribution delivers to the strategy. There's a company called Blue Gem that has a strategy platform, a piece of software that helps make that happen. And so definitely one of the steps is in communication, but using more agile, fit-for-purpose, modern technology. Those leaders can't be in meetings and running workshops and rolling out the strategy to the extent which, you're right, I think is needed throughout the organization. I think it's also looking for opportunities to keep the strategy alive, making sure it's as basic as making sure it's referred to at every all-hands or town hall meeting, every departmental meeting, that it's featured on the intranet, a bullet point in team meetings, that it's part of leadership one-to-one. Make it part of your culture, your rituals, your traditions, the behaviors. There's a lot of work that needs to be done to embed it, but there's a lot of opportunities and forums that exist in a workplace anyway, and I think we often miss using the most obvious ones. It doesn't have to be perfect. It doesn't have to be all bells and whistles, but it should be on the agenda. It should be present. You know, it goes back to communication. It goes back to communication, and it does, like you say, often stop at a level. Right. You and I both do a lot of work with leadership and with 360 leadership programs and receipts. One thing I've found in particular this last year, six months, and it's led me to dig into the stats and the research, I've learned that strategic thinking is actually one of the most challenging and one of the facets or capabilities of leadership that is actually the lowest in management lead 360 feedback, and that's telling us that we need to do a better job at translating that strategy into action, operationalizing it, and bringing employees along on that journey, and these are very talented, very capable leaders, but they're on the top of the mountain before their team has got their boots on, and it's not because the team is slow or not capable. They're also very talented, but they haven't been given the map. They haven't been given the equipment or the compass, so it's about taking them along on the journey. It's cliche, but I think it's such a good way to describe what strategic thinking and strategic leadership is. I think we could go a lot further if we both develop that capability, that focus on it, because employees want that. They want to be a part of something bigger. Something bigger goes back to being part of contributing to the bigger picture. You're hitting some really important points and giving some really good insights here as to what leaders can do to be more effective in their communication. The CEO is communicating the vision. It's really important for the CEO and the C-suite to really be aligned with the content and the context behind that message. Whatever the CEO is saying, their team should be articulating the same exact message throughout the organization, beyond the CEO. These leaders take the message forward, and then they're sharing it with their direct reports. The more fluid, the more consistency and continued communication, that is going to really be an effective channel. Rachel, I could listen to you all day long. This has been a delicious conversation around organizational design, strategy, communication. You have shared so many great insights of how leaders can really evolve in these areas and take this information and use it in their own organizations. Thank you, thank you, thank you. Oh, you're so welcome. It's been an absolute pleasure, Laura. So nice to talk to you and hear your perspective, too. Likewise. Thanks, Rachel. Hey, maybe we need to do a part two. Yeah, I think we do. To learn more about Rachel and level up, check her out on LinkedIn under Rachel Wilson Rubichon. That's it for this episode of Coaching on Ms. Presents Podcast. If you're interested in being a guest or you're a subject matter expert, please go to my website, www.epiphanyconsultingsolutions.com and submit your request on the left chat link. You can also find me on LinkedIn under Laura Perez Earhart or my website, epiphanyconsultingsolutions. We hope the content and conversation will give sparks of inspiration. If you love and learn from the show, pay it forward and share my podcast with your colleagues and friends. I'm Laura Perez Earhart. Until next time, stay safe and live well. ♪