Organizational Design

Required Inputs

• Organization: Company or business unit name, current headcount, revenue, and geographic footprint.
• Current Structure: Existing org chart or description of reporting relationships, layers, and key roles.
• Strategy: The business strategy the organization must execute (growth, transformation, cost efficiency, market entry, integration).
• Pain Points: Known structural issues — slow decisions, unclear accountability, duplication, silos, coordination failures.
• Constraints: Budget limitations, regulatory requirements (e.g., mandated roles), union agreements, key-person retention needs.
• Timeline: How quickly the redesign must be implemented.

Execution Steps

1. Current State Diagnostic

1a. Spans of Control Analysis

Calculate average and median spans of control at each organizational level.

Industry benchmarks by function and level:

Red flags in spans of control:

• Span < 3: Manager may be unnecessary; candidate for layer removal or role consolidation.
• Span > 20 (non-frontline): Manager likely cannot coach, develop, or performance-manage effectively.
• High variance within same level/function: Signals inconsistent design, not intentional differentiation.

1b. Layers Analysis

Count organizational layers from CEO to frontline. Benchmark against:

Symptoms of excess layers:

• Decisions require 4+ approvals to execute.
• Information distortion ("telephone game") between frontline and leadership.
• Managers who manage managers who manage one person.
• Titles proliferate without corresponding scope increase.

1c. Decision Rights Mapping

Map decision rights for 8-12 critical business processes using RAPID framework:

Decision rights red flags:

• "Decide" role unclear or shared across multiple people (no single point of accountability).
• Too many "Agree" roles slowing decisions without adding value.
• Frontline decisions (e.g., standard customer requests) escalated to senior levels.
• Decision rights exist on paper but are routinely bypassed in practice.

1d. Role Clarity Assessment

For each major role, assess:

• Is the role's primary accountability clear to the role holder, their manager, and their peers?
• Are there overlaps with other roles (two roles doing the same work)?
• Are there gaps (work that no role is accountable for)?
• Does the role have the authority to match its accountability?

2. Design Principles

Define 4-6 design principles that link the future structure to the business strategy. Each principle must be specific enough to resolve a design trade-off.

Framework for writing design principles:

Test each principle: Does it help resolve a real design disagreement? If everyone would agree with it regardless, it is too vague.

3. Structural Archetypes

Evaluate which archetype best fits the strategy and design principles.

Hybrid approaches: Most real-world designs are hybrids. A common pattern is Divisional at the top with Functional shared services. Document which archetype applies to which part of the organization and why.

4. Future State Option Development

Develop minimum 3 distinct structural options. Each option must be a genuinely different design, not a cosmetic variation.

Per option, document:

5. Role Clarity Framework (RACI for Key Processes)

For the recommended option, build a full RACI matrix for the top 10-15 business processes.

R = Responsible (does the work), A = Accountable (owns the outcome), C = Consulted, I = Informed.

RACI rules: Every process must have exactly one "A." If a process has more than 3 "C" roles, simplify.

6. Headcount Impact Analysis

One-time costs include: severance (typically 1-4 weeks per year of service), outplacement, retention bonuses for critical talent, recruitment for new roles, relocation, and systems/process changes.

7. Transition Planning

Phased approach with clear milestones:

8. Change Management Requirements by Structural Change Type

9. Communication Plan Template

Output Template

## Organizational Design: [Organization / Business Unit Name]

**Date**: [Date] | **Headcount**: [N] FTEs | **Revenue**: $[X]M

### Executive Summary
[Organization] requires a structural redesign to support its strategy of [strategy summary].
The current structure has [X] layers, an average span of control of [X], and exhibits
[key pain points]. We evaluated [N] structural options and recommend [Option Name], which
[key changes]. This will result in a net headcount change of [+/- X] FTEs, annual savings
of $[X]M, and one-time restructuring costs of $[X]M. Implementation will take [X] months.

### Current State Diagnostic

**Spans of Control**
| Level | Current Avg Span | Benchmark | Gap | Assessment |
|---|---|---|---|---|
| Executive | X | X-X | [Narrow/On target/Wide] | [Commentary] |
| Senior Manager | X | X-X | [Narrow/On target/Wide] | [Commentary] |
| Mid-Manager | X | X-X | [Narrow/On target/Wide] | [Commentary] |
| Frontline Manager | X | X-X | [Narrow/On target/Wide] | [Commentary] |

**Layers Analysis**
- Current layers (CEO to frontline): [X]
- Benchmark for organization of this size: [X-X]
- Assessment: [Over-layered / Appropriate / Under-layered]

**Decision Rights Issues**
| Decision | Current Issue | Impact |
|---|---|---|
| [Decision] | [Issue] | [Business impact] |

### Design Principles
| # | Principle | Strategic Link | Structural Implication |
|---|---|---|---|
| 1 | [Principle] | [Strategy element] | [What it means for the design] |
| 2 | [Principle] | [Strategy element] | [What it means for the design] |
| 3 | [Principle] | [Strategy element] | [What it means for the design] |
| 4 | [Principle] | [Strategy element] | [What it means for the design] |

### Structural Options
| Attribute | Option A: [Name] | Option B: [Name] | Option C: [Name] |
|---|---|---|---|
| Archetype | | | |
| Layers | | | |
| Avg span of control | | | |
| Headcount impact | | | |
| Annual cost impact | | | |
| Implementation time | | | |
| Complexity | | | |
| Alignment to principles | | | |
| Primary risk | | | |

### Recommendation: [Option Name]
[Rationale for selection — why this option best supports the strategy and design principles.]

**Org Chart (Top 3 Levels)**

[CEO] ├── [L1 Role A] │ ├── [L2 Role] │ ├── [L2 Role] │ └── [L2 Role] ├── [L1 Role B] │ ├── [L2 Role] │ └── [L2 Role] └── [L1 Role C] ├── [L2 Role] └── [L2 Role]

### RACI Matrix (Key Processes)
| Process | [Role A] | [Role B] | [Role C] | [Role D] |
|---|---|---|---|---|
| [Process 1] | A | R | C | I |
| [Process 2] | C | A | R | I |

### Headcount Impact
| Category | Current | Future | Change | Savings / Cost |
|---|---|---|---|---|
| [Category] | X | X | +/- X | $___M |
| **Total** | **X** | **X** | **+/- X** | **$___M** |
| One-time restructuring cost | | | | $___M |

### Transition Plan
| Phase | Timeline | Key Activities | Milestone |
|---|---|---|---|
| Design Finalization | Weeks 1-4 | [Activities] | [Milestone] |
| Leadership Appointments | Weeks 3-6 | [Activities] | [Milestone] |
| Organization Announcement | Weeks 6-7 | [Activities] | [Milestone] |
| Detailed Slotting | Weeks 7-12 | [Activities] | [Milestone] |
| Operational Cutover | Weeks 10-16 | [Activities] | [Milestone] |
| Stabilization | Weeks 12-26 | [Activities] | [Milestone] |

### Communication Plan
| Audience | Message Theme | Channel | Timing |
|---|---|---|---|
| [Audience] | [Theme] | [Channel] | [When] |

### Change Management Risks
| Risk | Likelihood | Impact | Mitigation |
|---|---|---|---|
| Key talent attrition during transition | [H/M/L] | [H/M/L] | [Action] |
| Manager resistance to span increases | [H/M/L] | [H/M/L] | [Action] |
| Productivity dip during transition | [H/M/L] | [H/M/L] | [Action] |

Quality Checks

• Current state diagnostic includes spans of control, layers, and decision rights — all three assessed with data.
• Spans of control benchmarked against relevant industry and function norms (not generic averages).
• Layers benchmarked against organization size with source cited.
• Design principles are specific enough to resolve actual design trade-offs (not motherhood statements).
• Each design principle explicitly links to a strategic priority with a stated structural implication.
• Minimum 3 structural options presented that are genuinely distinct (different archetypes or fundamentally different groupings).
• Each option assessed on: headcount impact, cost impact, implementation complexity, timeline, and alignment to design principles.
• RACI matrix completed for at least 10 key business processes with exactly one "A" per process.
• Headcount impact quantified by category with annual savings and one-time restructuring costs.
• Transition plan is phased with specific milestones, timelines, and owners.
• Communication plan addresses all stakeholder groups (board, leaders, managers, employees, external, unions if applicable).
• Change management approach tailored to the type of structural change being made.
• Recommended option has a clear rationale tied back to strategy and design principles.