Publication
Organizational Structure for the Future: How to Succeed with Digital Transformation
To remain competitive in an increasingly digital and data-driven world, companies face the challenge of keeping pace with changing times and adapting to new and constantly evolving challenges. Digital transformations are not just a technical challenge; they also require the enthusiasm of employees to actively participate in these changes.
To successfully carry out transformations, a variety of factors should be considered – a few of which we will examine more closely in this article, such as how organizations should be structured in terms of their structure, processes, and collaboration. Flexibility, agility, and an open communication culture are crucial to involve employees in this change process and motivate them to actively participate in the implementation of new technologies.
There is no universal “one size fits all” solution when it comes to defining the optimal organizational structure for the successful implementation of digital solutions. Each company is unique and brings its own specific challenges, objectives, and cultural characteristics.
Optimal Organizational Structures
A well-thought-out and flexible organizational structure can play a crucial role in how well a company is able to implement and live digital changes, as it creates the basis for effective action, clear communication, and rapid decision-making. There are a variety of organizational structures, and each has its advantages and disadvantages that must be adapted to the needs of your company.
The matrix organization combines functional and project-based structures to promote flexibility and expertise. This organizational structure is particularly advantageous for large companies in dynamic markets, as it allows for faster decision-making through close teamwork, but also brings potential for conflict and more complex communication paths.
Agile organizations, on the other hand, focus on autonomous, cross-functional teams that increase their adaptability to challenges through agile methods such as Scrum or Kanban. However, this structure can present challenges due to the complexity of implementation, particularly with regard to consistency in processes.
The central control structure organizes decisions and processes tightly with clear guidelines from the leadership level, which sets standards and utilizes resources more efficiently. However, it suffers from a lack of flexibility and slow decision-making, as creative solutions and employee ownership are often limited. This structure is mainly suitable for large companies in stable markets and facilitates the handling of compliance requirements.
The choice between a matrix organization, an agile organization, and a central control structure depends heavily on the specific goals, the corporate culture, and the industry. Together with our customers, we advise them on the choice of the appropriate organizational structure and accompany our customers during implementation. Because each model has its own strengths and weaknesses that require careful consideration and a well-thought-out implementation.
Challenges in Implementation
In our experience, every form of transformation faces a number of different challenges, which are best addressed before the transformation even begins:
- Resistance to Change: Employees may resist the use of new technologies and the adoption of new processes. Effective change management and training are therefore necessary to involve employees early on. When developing change management initiatives, we orient ourselves on the ADKAR model: Awareness, Desire, Knowledge, Ability, Reinforcement. The model describes the five required elements for successful change at the individual level and is a helpful tool to ensure that all important aspects of a change are considered, thus ensuring successful implementation.
- Lack of Expertise and Future Skills: Important topics such as change and innovation competence as well as key digital skills must first be developed or trained within the company. It is also important to maintain foresight and prepare now for the skills that will be relevant in five to ten years. For this, we use our Zoom-In and Zoom-Out approach, where first the big picture (Zoom-out) is considered to gain a comprehensive understanding of the context and interrelationships, before focusing on specific details (Zoom-in) to develop targeted measures.
- Insufficient Resources: Lack of prioritization of implementation and change management activities and lack of urgency limits capacities and resources that can be involved. Often, employees are expected to manage the change “on the side.”
People at the Center – The Most Important Part of Every Project
In today’s fast-paced and complex business world, it is essential to put people at the center when designing organizations. This is especially true when developing and implementing projects, where success depends significantly on the individuals involved. The various forms of organizational structure, as mentioned above, should always be designed to promote the needs, skills, and engagement of employees. Involvement in decision-making processes is another key to success. When employees feel that their opinion counts, suggestions are accepted, and they are allowed to actively participate in shaping the changes, this leads to higher engagement and stronger identification with the goals of the organization. Participative leadership, in which employees are actively involved in shaping projects and processes, not only strengthens team cohesion but also promotes ownership and responsibility.
In order to implement digitization projects efficiently, the organizational design, processes, and working methods that are appropriate for the organization are crucial. The challenges mentioned can be addressed and overcome through targeted strategies and activities. Companies that are willing to face the challenges of digital transformation and create the right structures will be able to gain competitive advantages and successfully implement innovative solutions. An organization that considers people as a central building block will not only implement projects successfully but also create a sustainable and positive corporate culture. The key to success lies in dealing with people, their skills, and their creativity in the right way – because in the end, they are the ones who make the difference.
Together with you, we develop customized strategies that take into account your individual processes, collaboration models, and existing corporate culture to successfully carry out your transformation..
