Organization Design and Effectiveness

Today’s organizational challenges are multifaceted, requiring the use of data-driven, evidence-based approaches to understand key issues and craft the required solutions. L.E.K. Consulting’s Organization and Performance practice helps clients define the right organizational choices to drive business success. Each organization is unique in its history, culture and strategy. We tailor our work to explicitly incorporate these dimensions.

Whether our clients are looking to redesign their overall operating model (see below) or seeking a health check on their current organization, we provide a robust and objective service to ensure they meet their desired organizational objectives.

Operating model design — L.E.K.’s holistic approach to organizational strategy

On their own, strategic plans are insufficient to propel an organization to successful execution. Even in organizations with a best-in-class corporate strategy, their enterprise design, structure, processes, systems, governance and/or people may be ineffective in implementing that strategy. This impacts organizations of all sizes, industries and maturity stages; most, if not all, organizations will struggle, at some point, to bring strategic choices to life.
 

The operating model is the vehicle through which an organization continuously converts its strategy into day-to-day execution. A thoughtful and intentionally designed operating model will guide the organization as it operationalizes its corporate strategy. As organizations increasingly look to scale effectively with an optimized cost structure, a carefully designed operating model has the added benefit of illuminating and unlocking operational efficiencies, synergies and new growth opportunities. Ultimately, a well-designed operating model will lead to cost-effective and sustainable operations, differentiation from competitors, and a solidified value proposition. 

L.E.K.’s operating model framework includes six key elements, which collectively represent an operating model.

1. Enterprise design (the foundational starting point): At the core of every operating model, enterprise design incorporates the organizational guiding principles and clarifies the relative positioning of business units (BUs), enabling functions and the corporate center. Enterprise design also outlines where profit-and-loss responsibilities sit across the organization and reflects all in-/outsourcing decisions.
2. Structure and accountabilities: The organizational structure includes all reporting lines and accountabilities to enable the most efficient work, cross-collaboration and execution. The structure addresses spans of control, ensuring that spans and layers suit the organization’s size, geographic footprint and life stage.
3. People: The people element helps illuminate whether the organization has sufficient human capital (employees and skills) to operate effectively. When role and talent gaps exist, this part of the framework guides organizations in how to approach deficiencies and remediation.
4. Processes: Workflows within teams/functions and across the organization must be clearly defined, widely understood and automated when possible.
5. Systems, data and infrastructure: For an operating model to succeed, it must factor in the enterprisewide and function-specific systems that are necessary to support daily operations and promote the sharing of data and insights. Technology must serve as a true enabler that underpins all organizational activities and facilitates the sharing of knowledge and insights.
6. Governance: Clear decision rights and recurring decision forums are integral to ensuring corporate-, functional- and asset-level adherence to operating norms and governance. Leaders must align on how key organizational decisions are made and the ideal degree of decision-making centralization.

We help clients design and execute on a broad range of operating model solutions, from partial redesign and corporate governance changes to full operating model transformation. Our comprehensive framework closely links organizational choices with a client’s business portfolio and strategic positioning choices.

Organizational effectiveness

You can’t manage what you don’t measure. Our Organizational Excellence (OEX) Diagnostic Tool provides a rapid assessment of existing organizational performance using a structured online or app-based survey.