Organization Design: A Tool to Rebuild Post-Pandemic

Heather Lawton

While it may feel like the COVID-19 pandemic is never ending, it is time for leadership to start thinking about what their organization will look like post-pandemic. We acknowledge that the pandemic introduced significant challenges (e.g. heightened employee stress and burnout, increased turnover and retention issues), but it also introduced positive workplace attributes like flexible and remote working as well as increased worker productivity. As teams look to the post-COVID-19 horizon, it is important to consider how to mitigate negative impacts by managing employee support systems while also ensuring positive attributes endure. Organizational design can be a helpful tool to structure these decisions effectively and ensure that companies find their own way to ‘build back better’.

Leaders that continuously pursue this focus on organizational effectiveness enable their businesses to quickly adapt to change, scale effectively in line with shifting business strategy, support employee well-being, and build efficient and productive work systems. In the era of the ‘great resignation’, organization design is a powerful tool to avoid burnout and retain great employees.

Exacerbated by the pandemic, there are a number of industry trends that we are seeing continue to prevail to defray costs, increase digitization, and streamline processes. For a broad assessment of these trends, we recommend you refer to our 2022 Outlook, but for now we want to call out three prominent areas that all require a focus on organization design:

  • Continued attention on mergers and acquisitions – increased pressures on margins, accelerated by the pandemic, has led to a further focus on M&A activity as firms look to identify strategic business partners for scale and growth of AUM. As part of this approach, companies will need to be cautious in both assessing for cultural fit and considering thoughtful business design that creates enhanced management structures and effective oversight for remote employees.
  • Enabling operational efficiencies via outsourcing of highly commoditized functions – in a similar vein, as organizations seek back- and middle-office efficiencies by partnering with Asset servicing firms, leaders should consider how best to segment teams and design new organizational structures that optimize any retained or business oversight functions.
  • Consolidation of technology platforms – finally, as COVID-19 drives organizations to pursue enhanced digital strategies and shift towards consolidated front-, middle- and back-office systems (e.g. State Street Alpha or Blackrock Aladdin), leadership should place careful consideration as to how organizational structures can align with more streamlined systems and automated processes.

Optimizing Organization Design: A Three-Stage Model

As leadership navigate post-pandemic structural decisions, while also assessing these strategic changes, it is recommended that they keep an eye on optimizing organization design. We recommend following this simple model.

Once a leader has used these tools to build their new organization, how do they implement those changes effectively?

  • Consider appropriate change management practices – to avoid further increasing employee stress, changes should be communicated openly and transparently so that staff understand what’s changing and when, any potential hurdles that are anticipated, followed by the benefits that make those hurdles worth enduring.
  • Ensure employees are trained so they are equipped to operate in their new role – leaders should assess the impacts to employee roles and ensure that individual’s have access to training programs that enable them to feel prepared to support new processes and job expectations.
  • Establish governance groups to manage changes and continuously assess for optimization –appropriate groups should be set-up to oversee transitions and establish performance trackers that indicate if further re-structuring is required. Many of our clients have recently created Organizational Effectiveness or Business Architecture groups that usually reside in HR or Project Management Offices (PMOs) to support this function.

To learn more about how Alpha can assist you in successfully managing an organizational design initiative, please get in touch with our team.

About the Author

Heather Lawton

Heather is a Manager working out of Alpha's office in Toronto, ON, Canada. She is passionate about leading large-scale transformations with extensive experience providing strategic facilitation, operating model, change management, organization design and program delivery support across a variety of organizations primarily within the Asset and Wealth Management industry.