Organizational Architecture Definition
The organizational architecture is a description of the systems existing in the organization. Each organization has a lot of systems in place, some of them are extremely formal and many are informal and they are not described in any official document. The organizational architecture describes the systems, which make the organization living organization. The ability to design, develop, integrate and use such organizational systems is the basis for the efficient organization.
The organizational architecture is about creation of roles in the organization, processes to handle inputs and outcomes and formal reporting lines in the organization for the management purposes. Traditionally, Human Resources is expected to play a significant role in the organizational architecture and for HR Business Partnering concept, the organizational architecture is extremely important as the HR Business Partner can provide the regular consultancy to the business leaders and managers.
There are many models describing the organizational architecture around us. The most classical ones are the Star Model by Jay Galbraith and 7-S organizational architecture description by McKinsey.
The Galbraith’s Star Model describes 5 most important factors of the efficient organizational architecture:
- Business Processes and Lateral Links
- Rewards Systems
- Human Resources Management
The McKinsey’s 7-S organizational architecture model describes 7 factors of the successful organizational architecture:
- Super ordinate Goals/Shared Values
In both models, there is a huge responsibility of Human Resources as in both models, HR Role is significant and has a significant impact on the efficient organizational architecture and operation of the whole organization. The competitive advantage always starts with the winning organizational architecture and HR Business Partner is a key player in the setting of such an organizational architecture.
The HR Team has to understand the theory of the organizational design as they can play a useful role in the creation and design of the new architecture. Without the theory behind, the advices given are just based on the gut feeling and they cannot be respected by the internal clients.
The HR Business Partner should be responsible for the organizational diagnosis, but they can use the resources given from HR Team and the internal client’s employees. When the team knows about the organizational architecture, they can start the internal organizational diagnosis.
It is important that the team will decide about the organizational architecture as the organizational architecture sets the limits and the scope for the team. When the architecture is not given, the result can be a complete chaos. The architecture pushes the team to use a long-term view and not coming into short-term decisions. The organizational diagnosis is similar to the financial audit process. The audit process is defined and the auditors strictly follow the given rules and procedures.
The team has to follow the procedure of the organizational diagnosis and it has to set the correct frame for the new organizational architecture or to identify the gaps in the current one.
The organizational diagnosis helps to set the right frame to make the business strategy successful. The management sets the right goals in all the important areas of the organizational architecture as the organization can keep the success in the long term view.
Role of Human Resources in Organization Diagnosis
The organizational diagnosis should not be used just for the introduction of the improvement in the organizational architecture. The HR Business Partner has to use the outcomes from the organizational diagnosis to further enhance the co-operation and the relationship with the internal client.
The HR Business Partner has to lead serious initiatives to propose and design new approaches and new organizational processes. The results of the discussions and approaches should be the proposal for the changes of the corporate culture, in the area of setting new skill sets needed for the new job and new challenges, desired results and management approaches.
The HR Business Partner has to use the organizational diagnosis as the source for the improvement of the job done by Human Resources. The HR Business Partner has to use the organizational diagnosis as the source of the advices for the internal client and as the source of the improvement, which can play significant role in the strategy implementation.
Evaluation of a Good Organization Architecture
Organization diagnosis changes the organization architecture to the evaluation tool. The factors identified during the discussions about the organizational architecture helps to identify the strength and weaknesses of the organization.
The HR Business Partner has to transform the organizational architecture to the strong evaluation tool. The organizational architecture defines the ideal, the evaluation of the organization against the model identify the gaps.
The HR Business Partner does not have to make the evaluation on his or her own, the discussion during the evaluation is more important than the final scores. As the discussion shows different point of views, the real evaluation can be adjusted according the outcomes from the discussions.
The discussion is done against the organizational architecture (current one) and the defined business strategy. The HR Business Partner has to understand, the main goal is to prepare the organization to accomplish the business strategy, which needs definitely some adjustments in the current organizational model and organizational architecture.
The purpose of the whole discussion is to find the connections between the organization and the rest of the business strategy as these connections can be hidden for many managers. When they are not pushed to discuss them, they can completely ignore them and it can hurt the performance of the organization in the future.