4 Golden Rules of Organization Design: Do not Ruin Your Company By Creating Unnecessary Roles

4 Golden Rules of Organization Design: Do not Ruin Your Company By Creating Unnecessary Roles

As company grows, people grow in titles, salary etc. At some point, the growth slows. You will be tempted to create opportunities to keep people happy. Is it good thing to do ?

Never Ever !!

4 Golden Rules To Follow While Creating New Roles:

  1. If the role does not add business value, do not create it.
  2. Do not waste your people on dummy roles. Be creative while role design. If you are unable to utilize the high experience of your people, you are missing some opportunities. Find the opportunity which actually will earn new revenue or strengthen existing revenue stream.
  3. If stakeholders do not understand the role clearly, they can not support the role. Hard time explaining the value of the new role to all stakeholders ? Postpone the decision. 
  4. Remember – The other alternative could be worse for the organization. No one is convinced about new roles. But if you do not create the roles, people will leave. What to do? Just do not do anything. If people leave, deal with it. The other option could be worse for the larger organization and the stakeholders.

Ok. What if you still gone ahead and created unnecessary roles?


Case Study of An R&D Center:

R&D center of a global organization always charged per hour to get its revenue. For 5 years,, it had excellent grown in headcount. Lot of busy and happy people. Then, something happened. Growth slowed down. Now how do you promote people?

Organization created several new career streams – one for program management and second for domain specialists. This is apart from architect, process and line management streams. This created havoc. There were not enough large programs for the program managers to prove their worth. For domain specialists, their roles clashed too much with architects.

Instead of improving the situation, the employees

  • Spent entire time in figuring out their boundaries.
  • Invented more work on their own which did not align with business objectives.
  • Efficiency came down. So did the value of every hour of work billed out
  • Then followed strict bell curve to contain cost.The ones marked as low performers were flushed out. Needless to say – an insecure manager considers many factors other than performance. Within no time this cut into the flesh of the organization, not just the weed.

End of the day, neither organization gained nor the people.

When there was no business growth, the organization created more roles than needed. It led to all the more confusions. More office politics. Stagnation and people leaving would have been better off than creating chaos. In that case, some employees would have been unhappy. But would have taken care of the majority of the issues.

This happens at all levels – from smallest unit of management i.e. the line management till the head of the organization.

Have you seen this issue?

Here is an example of good organization design.

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