How to tackle reorg challenges in large enterprises with organizational design software 

Written by: Philip Hofton, Director, Business Development and Strategy @ Nakisa

Large enterprises, such as those among the Fortune 1000, face numerous challenges when going through organizational design changes. Those obstacles vary in nature and come in various shapes and sizes, so it’s no wonder that, according to recent research, only one out of ten companies manage to align their strategies with their organizational design. 

In this article, which is based on an interview I gave recently (video below), we’ll check the challenges organizations encounter while restructuring and how HR software—organizational design software in particular—can help business leaders overcome them and achieve the best possible results. 

What are the key organizational design challenges during a restructuring? 

Reorganization is often an intricate dance that involves aligning people and optimizing business mechanics to achieve desired outcomes. In other words, within large enterprises, challenges will arise on two fronts: the human element and business practices. 

What are the main human challenges in organizational design? 

Human interactions are at the core of organizational design. Reshaping and restructuring teams will bring together individuals with diverse backgrounds and work experiences, which can surface personality differences and even spark conflict, requiring highly adept management. 

Let’s see what the main human challenges in org design are: 

• Culture clashes - In scenarios like mergers and acquisitions, people from different backgrounds might be put to work together to try and optimize their talents. However, this can lead to conflict due to the collision of perspectives and organizational cultures. 
• Personality clashes - On a more basic level, each individual has their own approach to work based on their personal characteristics. So, when distinct people start collaborating after a reorg, they might just not accept the other’s way of doing things, disrupting work. 
• Managing role transition - A key hurdle in organizational design changes is ensuring a smooth transition into new roles and responsibilities. Employee buy-in will highly depend on understanding the nuances in this renewed, changed, or optimized structure. 

What are the main business-related challenges in org design?

Beyond the human dynamics, the complexity of aligning business practices poses its own set of challenges during organizational design changes. Failing to address those issues can generate serious blockers to people doing their work and damage the organization’s results. 

Here are the most common business-related challenges in organizational design: 

• Harmonizing business practices - After an organizational restructuring, it’s crucial to reconcile different business practices. This involves aligning processes to create a seamless operational framework that supports the new organization’s overall objectives, ensuring efficiency. 
• Implementing new tools - Organizational design often leads to implementing new tools and altering processes based on these new solutions. The challenge lies in facilitating this change without disrupting the operations and unsettling the workforce. 
• Navigating workforce changes - The difficult decision to let some individuals go during a restructuring can demotivate those retained. Managing the aftermath of such changes is crucial for maintaining morale and ensuring continued productivity. 

How does HR tech support organizational redesign?

Organizational design is a dynamic, complex landscape, so harnessing the capabilities of human resources technology (or HR tech) is vital to successfully face the challenges of reshaping large enterprises. But how does HR tech help in a reorganization? Let’s see: 

• Dynamic analytics and visualizations - Gone are the days of static reports and dashboards. HR teams can now explore org modeling and workforce planning tools that provide cutting-edge visualizations based on real-time people data, allowing quicker, better-informed decisions. 
• Integrations - Another aspect of the HR tech evolution is the seamless integration of these sophisticated tools with financial systems. With those capabilities, organizations can access more comprehensive views of their talent landscape. 
• Org scenario simulations - With software, HR can go beyond mere speculation and visualize real-life scenarios. These tools allow decision-makers to model situations, cost out different structures, help explain the reorg to employees, and simulate the integration of new or alternative forms of talent (like outsourcing or sharing a service center to streamline operations). It’s a low-risk way to game out hugely impactful decisions. 

What are the actual results of using HR tech in a reorg? 

As we’ve seen, turning to HR tech can totally change the game of organizational restructuring when it comes to navigating its complexities. But what are the actual results of doing it? 

Those outcomes encompass both tangible and intangible benefits, meaning that the success of adopting HR tech is not only measured in numbers but also in the development of a human environment that will be essential for sustained growth. Here are the main expected outcomes: 

• Return on investment - A well-executed reorganization always results in optimizing talent. Consequently, organizations will see a clear return on investment (ROI) through enhanced performance, streamlined business practices, and reduced or optimized headcount costs. 
• Higher employee engagement - Using HR software for communicating organizational changes increases employee engagement around the new roles and responsibilities set up by the restructuring, improving individual performances and boosting collaboration between teams. 
• Talent and skill retention - HR software is strategic for retaining key talent and preserving growth-type skills inside the organization, ensuring business continuity and contributing to long-term success.

Working on “To-be” mode: the true power of HR tech

Instead of looking at the organization in “as-is” mode, the ideal HR software allows you to simulate different scenarios in “to-be” mode and make decisions based on that. However, organizations typically use manual tools like Excel, Visio, or PowerPoint for visualization and, sometimes, PowerBI to analyze employee data—a demanding, error-prone approach that requires lots of back and forth to get approvals and opinions on organizing talent.

The real payoff is to have an all-in-one organizational design software to simulate scenarios in a safe space, give people visibility on those simulations, and allow stakeholders to request and get approvals. That’s the case of the Nakisa HR Suite, the HR solutions that offer full workforce planning capabilities, ranging from supporting day-to-day operations such as regular talent needs assessments to facilitating long-term organizational design.

Here are the three pillars of the Nakisa HR Suite that will totally transform your HR work:

• Organization visualization - With Nakisa’s workforce analytics, deep-dive visualization, org charts, and reporting capabilities, you’ll make better sense of your organization. 
• Predictive HR analytics - Predicting the outcome and impact of reorganizations is made easier by its proprietary problem detection and root cause analysis functions. 
• Organizational design - Create and compare as many what-if scenarios as you need to determine how to best modernize your organizational design and build your organization’s future state. You can then write back your chosen scenario to your core ERP, HCM, and HRIS systems to speed up implementation. 

With those features and capabilities, your organization will be able to overcome any challenges presented by a reorg and see itself set for long-term success. Check out our product page or just book a call with our experts to see firsthand how Nakisa HR Suite caters to your organizational design and structure needs!