SECTION 13.30  ORGANIZATIONAL STRUCTURE

Last Update:  3/06

 

 

Organizational redesign is the process of realigning tasks and responsibilities within an organization to respond to changed conditions in either the internal or external environment with the human resources required to accomplish them.  Typical examples of these conditions include:

 

·         Reduction in funding, which may necessitate layoffs.

·         Retirement or voluntary departures of staff, who take with them expertise and organizational memory and knowledge.

·         Restructuring of service delivery to more effectively serve customers; in some cases, this may mean merging formerly distinct units into a new unit, in other cases, it may mean one unit absorbing some of the responsibilities of another unit that is then eliminated.

·         Redesigning processes by the combination or elimination of certain steps or addition of new or different technology.

·         Reducing services to core services only and addressing support services in different ways.

 

Organizational redesign involves two subprocesses:

 

1.       Determining the new structure of the organization based on the work to be done.

2.       Devising a plan for assigning either resident or acquired talent to do the work.

 

This section deals with the first process. Sections 13.40 and 13.50 address the second process.

 

Before settling on a structure, the following need to be considered:

 

·         Strategic intent of the organization

·         Core values of the organization

·         Results and outcomes

·         Core business

·         Supporting processes

 

Strategic Intent

 

Strategic intent involves the intentional visioning of the organization’s future rather than simply reacting to external forces and conditions. The organization does this by answering a series of questions that help it better define itself:

 

·         Who are we?

·         What is our purpose?

·         Where do we see ourselves in the future and why?

·         How will the organization add value to state government and to the lives of our customers?

 

Typically, this process includes the usual components of strategic planning: mission, vision, values, environmental scan/strengths, weaknesses, opportunities, and threats (SWOT) analysis, and goals to be accomplished in the next 3-5 years. The organization’s culture should also be considered. The culture is the unwritten side of the organization, but it’s every bit as real. It’s the unstated beliefs that define what the organization thinks is important and the standards it sets for conducting business.

 

Why is it important to consider the above before plunging into defining the organizational structure? Because designing the organizational structure involves decision-making, making choices. Those choices are based on something. It only makes sense that the decisionmakers understand why they selected one option over another to use as a frame of reference when future decisions, decisions that may be more difficult to make or less clear, must be made. High morale and effective communications depend on decisionmakers being able to clearly explain their rationale of their decisions to employees so that employees can relate those actions to their own jobs.

 

Core Values

 

Core values describe behaviors that are considered critical to the success of the organization. All members of the organization are expected to exhibit these behaviors as an integral part of their jobs. For instance, the organization may espouse “customer service” as a core value. What does that mean to each and every employee as they go about their jobs? What actions has the organization taken to define these core values?

 

Results and Outcomes

 

Results and Outcomes define the success of the organization, how it adds value to its customers’ lives and needs. Unlike the private sector, where profit defines success, success in the public sector is less easy to discern. Results are the tangibles that we aim for, that we say define success; outcomes are the intangibles, perceived value. Much has been written about Results and Outcomes in recent years as Iowa state government has focused on results-based management practices. We mention them here because any discussion of who we are and what we want to be (strategic intent) must include some measure of how we know we have achieved our goals.

 

Results and Outcomes are the focal point of organizational planning – what do we want to accomplish and how will we marshal our resources to get there? We need to be clear on this framework before setting the structure.

 

Core Business

 

Sometimes government agencies try to be all things to all people. When resources become scarce, there’s no way they can do that, supposing they even could before. Instead, they must focus on their primary purpose, their core business, by asking:

 

·         What outcomes are we charged by law to accomplish?

·         What are the primary results we want to achieve?

·         Who are our primary customers?

·         What customer needs must we address?

 

The organization’s core business needs to be clearly communicated to staff so every employee understands what is important to the organization and how that relates to their position.

 

Business Strategies

 

Business strategies are the “general methods or overall approaches used to achieve the goals of the strategic plan.” They are linked to the performance plan as a means of operationalizing the strategic plan. For instance, one of DAS’ strategic goals is to improve customer service. For DAS-HRE, one of the primary delivery systems for customer service is through the personnel officers; in other words, program service delivery made through personnel officers as the front line to agencies is a business strategy. As such, it suggests both organizational structure and staffing, because it is perceived to be a key part of the organization and because it focuses on a certain type of position.

 

Supporting Processes

 

In addition to determining your core business, you also need to identify the processes that are necessary to support it. We tend to dismiss the importance of these, because they are not directly involved in the core business. These are generally the first to be reduced or eliminated with budget cuts. But in designing the future organization, it is essential to know which are absolutely necessary in order to keep the main business going and how other secondary processes and needs will or could be addressed.

 

REDESIGN OPTIONS

 

Generally, if the organizational structure is not dictated by law, determination of what it should be rests with the department’s chief executive. The types and numbers of organizational units and unit leadership are set by law (see Iowa Code, chapters 7E.2 and 3).

 

Currently, in state government, most organizational units are based on:

 

·         Function

·         Product/service/program

·         Geographic/location factor (region, county, etc.)

·         Combination of the above

 

Function – Each unit has a separate function and specializes in that only. Jobs found within this type of unit tend to be narrowly defined because of this specialization, but this also allows the incumbents to become experts in their service areas. Upper management is responsible for coordinating all units, making the distribution of authority hierarchical. This type of structure is most readily understood by employees and outsiders, but because of the specialization, silos may result. For this type of organizational structure to be effective, it is imperative to establish effective channels of communications throughout the organization.

 

This is probably the most frequently used type of structure within state government. It differs from department to department in the types of functions the chief executive emphasizes. These are determined, in part, by the size of the department and also by its strategic intent and values, and in some cases, by statutory mandate.

 

Product/service/program – Units with this type of structure are based on the type of product or service delivered or program administered. The product or service may include a wide range of functions necessary to produce them or to run the program. One of the drawbacks to this type of structure is the duplication of functions that may occur from unit to unit as well as potential competition for the same customers or resources. Another drawback is that it does not promote economy of size; because each unit tends to obtain its own supplies and resources, these are usually acquired at a higher price.

 

Geographic – region, district, post, garage, nursery, forest, park, institution, etc. These are all parts of a larger whole, but within each, one or both of the above types of structures may be used. The very nature of being spread throughout the state geographically presents its own advantages and challenges. It allows for greater potential independence which may or may not conform to leadership’s expectations. It also means that most, if not all, support functions must be present or otherwise accounted for. If spread to the point where only a few employees make up each unit, it may also require dispersed supervision, which may present its own conditions and challenges. Finally, geographically spread units may also be somewhat limited in their potential applicant pool, which will affect staffing considerations.

 

With the possible exception of the matrix organization structure, most of the following types of organizational structure are not found in state government at this time.

 

·         Matrix/project

·         Boundaryless

·         Modular/networks/clusters

·         Virtual

·         Cellular

 

Once the organizational structure has been determined, the following steps must occur:

 

·         Assign tasks to individual positions

·         Determine position classifications

 

These are discussed in Section 13.40.

 

Steps for Determining Organizational Structure

 

  1. Determine which of the above type(s) of organizational structure the agency will use.
  2. Inventory all functions and/or program areas to be carried out by the department (or organizational unit).
  3. Cluster related/like functions and/or program areas into a few major groupings.
  4. Review the groupings for relatedness of entries, the logic and viability of the groupings.
  5. Once satisfied with the groupings, label them in simple, descriptive terms so that an outsider can understand their purpose.
  6. Divide each major grouping, where possible and reasonable, into sub-units based on like functions, program areas, or processes. These become bureaus and other sub-units.
  7. Review the logic of these groupings once more to make sure they make sense and are workable. Does the general structure conform to the values and perspectives of the chief executive officer? If the answer to either is “no,” it may be necessary to rethink the structure. Determine where it is not workable and devise alternatives to address that concern. For instance, the CEO or COO may want to have direct responsibility for one or more sub-units, but the structure has been designed so the management responsibility for all units is through the CEO’s direct reports; if this is case, the reporting relationships might need to be shifted or rethought.

 

Once the above steps have been completed, you have developed an organizational structure. It is a framework for the business, but it is also without complete definition.

 

The next step is to determine what kind of positions are needed to perform the functions identified or perform the various tasks of the identified program areas. That step is addressed in the next section.