Three Principles for Organizational Redesign

Organizational redesigning is one of the critical parts of the change process and the road map is a long and never-ending ride. There are three basic principles of enterprise architecture that help to embark on the journey.

Enterprise architecture provides a road map for the organizational redesign. Adopting three enterprise architecture principles — breaking key outcomes into components with designated accountability, empowering cross-functional teams, and allowing the business design to influence strategy — will help you embark on your journey.

Principle 1: Breaking key outcomes into accountable components

In the past millennium, developing an enterprise architecture involves designing enterprise-wide systems and processes that articulate a target state for the execution of transactions and the core business process. However, this method is no longer enough even though it added value.

In the present era, enterprise architecture is about componentizing company’s key outcomes into products, customer experiences and core enterprise process by assigning clear accountability for every component. This eliminates the gap between people-process-technology and facilitates operational excellence and adaptability to change.

For example, instead of having payment process for each product separately, a design that could integrate payment processing for all products will reduce the burden on the people and it turns the payment processing into one component of people-process-technology. This way the people can improve the processes in response to the changing needs of the customers and product owners. The component is reusable and becomes a living asset.

Research findings indicate that breaking outcomes into accountable components helps organizations utilize data more effectively and respond faster to business opportunities. Breaking down a business into components, however, is not easy. In addition, extracting reusable components from existing processes is a delicate operation.

Each new component adds value when implemented and companies can stage the development of new components when it creates value.

Principle 2: Empowerment of cross-functional teams

In the traditional enterprise model IT people design and manage systems, functional leaders design and manage processes, and business unit managers design roles and manage people.

The new model requires all people of each component to be empowered with responsibility for the process and technology to work.

The leadership task becomes more functional in formulating teams and coaching every member to understand their mission, establishing meaningful metrics and design experiments to test innovations. Team members define their goals and Leaders hold teams accountable to meet their goals creating autonomous in the system. The members of the component teams need to have diverse talent, thus the new model not only componentizes but also assigns cross-functional teams of experts to each unit. The team will be of product experts, software developers, user design specialists, data scientist, finance people and other specialists. On the long run, teams will articulate their own resource requirements.

Principle 3: Design to Influence Strategy

To respond to customer demands, empowered teams naturally identify opportunities with the capabilities of digital technologies. Every component teams will address strategic objectives, simultaneously reformulate strategy by continuous learning of customers’ requirement and how digital technologies can make it possible.

Here strategy becomes top-down and bottom-up exercise, where leaders can utilize the existing team or create a new team to seize emerging opportunities. When companies initiate a strategic or system development projects, this team can respond almost instantaneously, meanwhile, component teams can aim at goals for implementing high-level strategy.