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Organisational design, causes of failure

Organisational design, causes of failure

What prevents businesses creating an effective organisational design?

Let’s start with an overview of Organisational Design.

The purpose of organisational design is really simple: create an organisation that delivers maximum value to customers with minimum chance of service or product delivery error for the lowest cost consistent with not incurring costs by trying to save them. 

Throw in some flexibility and market responsiveness and that’s the core of organisational design.

With something so simple, why do so many organisations get it so spectacularly wrong?

Here are just some of the causes.


In an organisation where the leaders have allowed politics to trump everything else (usually because they came to occupy their positions through politics rather than commercial nouse), politics eventually strangles the organisation. It may take many years, but it always eventually happens when politics is allowed to dominate.

The Perfect CultureSome readers may be asking: “How do you prevent politics becoming the dominant force in an organisation?” The answer is simple in concept, but requires specific know how to deliver: knowing how to lead the culture so that customer service is the main focus (whether it is a product or service company or hybrid).

Even when politics do not dominate an organisation, the aspirations of the stakeholders have to be considered in every organisational design programme.

Even if the stakeholders are supportive of the aims of the organisational design, they may not be willing to cooperate with the methods. That is the point at which another of the factors impairing organisational design emerges…


Perhaps the easiest way to convey the leadership problem is with a question and answer.

You ask a CEO, how many people have you fired for failing to deliver on the objectives in the last 12 months? The answer is: none.

The Perfect Change Book CoverNow you can predict the likelihood of organisational design success. Any answer other than zero should be re-thought until zero is the answer.

CEOs who oversee an organisation that does not address and dismiss staff for failing to deliver objectives have zero chance of any major change success. Every organisational design project is a change project.

Back to the political problem. Even if staff support the aims of the organisational design, some may oppose the means, the method. Why?

Usually for at least two reasons.

1. Self-interest – it may cause some extra work to change, it may disrupt their comfort zone, they may have to learn new skills or techniques or working practices.

2. Poor management communication.


If the communication around an organisational design project is not excellent the chances of success diminish quickly: a small deficit in communication effectiveness causes a huge amount of resistance.

The Perfect Communicator Book Cover“Our leaders and managers are excellent communicators, that can’t be the problem!”

Is a line that any senior performance consultant will have heard often. Alas, it is simply false. High levels of articulation, perfect grammar, high-brow vocabulary, together, great communicators they do not make.

If you want examples that may support that observation, think of Ted Turner, think of John Prescott, and many others. Being a great and effective communicator does not involve the factors that most people think. Those factors are outside the scope of this article.

Suffice to say, organisational design change projects often fail because of what appears to be excellent, but is actually poor communication.

The Galbraith model

Alas, many OD projects fail for this reason: slavishly following the Galbraith Star model. Anyone who has lead an organisational design project of any size or complexity quickly found that the Star model is, well… less than stellar.
Yes, it does cover SOME of the factors that MUST be addressed,  but if those are the only factors considered, then failure is guaranteed. Even the factors it does cover are rarely addressed properly, as is demonstrated next.

Unclear or uninspiring vision

The Perfect Vision Book CoverHow long was your business school course on vision formation?

What? There wasn’t one?

Of course not, it is only recently that the factors involved in creating a successful vision have been identified. What does that mean for organisational design? That even if the Galbraith model was effective or complete, few leaders have the knowledge or skills to create a sufficiently clear or inspiring vision necessary to give the organisational design project any chance of success.

Back to our original question: what prevents businesses creating an effective organisational design? We have listed only five of the many causes.

If you want to ensure that your organisational design change projects succeed, there are many skills you need to acquire, either directly or through others.

If you want your organisational design to deliver as hoped, you may wish to contact PsyPerform.