Do you have the right jobs in your Non-Profit Organization (NPO)? Is your organization properly designed to meet your goals? Is your structure fully aligned with the corporate strategy of your Board? How do you know? These issues may be costing you money and negatively impacting your service delivery capability.
The answers to these questions lie in the functional structure, known as the Organization Design, of your work place. But first, let’s look at the sector.
The Non-Profit Sector
The non-profit sector is quite large. There are over 1.5 million non-profits in the United States. This is a very diverse sector. NPOs (in our definition) include non-governmental organizations (NGOs), para-public agencies, professional associations, lobby groups, foundations, institutes, and charities. NPOs can be found in the arts, cultural, sciences, sports, recreation, religious, finance and social services sectors. A broader definition of NPOs would include hospitals, libraries, museums, colleges and universities.
Some NPOs are large, most are small (less than 100 staff), some are well funded, and others struggle for donations. Many NPOs have a ‘cause’; they are mission-driven and exist to achieve a social, political or environmental objective of some type.
What they have in common is not what they are, but what they are not. They are not the government (municipal, state or federal) nor are they private sector for-profit companies. They are in between.
Another key differentiator is the type of jobs. NPO’s tend to have far more unique (one employee) positions than private sector companies where many people do the same job. They tend to have far more generalists (people wearing multiple hats) than specialists.
What is Organization Design?
It is the way your NPO is structured to comply with the strategic plan. It is the link between your program goals and how managers and staff achieve those goals. It helps achieve full alignment between your corporate strategy, your structure, and the key functions and roles in your organization.
Organization Design focuses on determining the proper assignment and division of labor; establishing the appropriate level of coordination, control, authority and responsibility; and designing jobs that match the needs of your NPO and the skills of your employees.
Why is it Important?
Effective organization design drives productivity, communications and innovation. It creates an environment where people can work effectively. Benefits include improved:
- Employee, client and stakeholder satisfaction
- Financial performance
- Relations with your Board
- Return on resource investment
When Should I Review my Organization?
Today! Symptoms of ineffective organization design to look for include:
- Poor inter-office coordination
- Excessive friction and conflict among internal groups
- Unclear roles or misused resources
- Poor work flow
- Multiple Boss Syndrome
- Reduced responsiveness to change
- Proliferation of extra-organizational units such as task forces, committees and projects
A redesign may be called for when your organization evolves to the point where there are substantial congruence problems between the formal organizational arrangements and the other components of your programs (such as reporting, business processes, information, performance measurement, and control systems.) These situations may be driven by:
- Mergers and acquisitions (even in the Non-Profit sector)
- Growth or downsizing
- Staffing changes (when a key long term employee leaves)
- A new leader (who comes in and doesn’t like what s/he sees)
- A change in the strategic plan by the Board of Directors
What to Consider
There are six key elements to address in Organization Design:
- Strategy – The basic approach to achieving your mission. Do you have an overall strategy?
- Work Processes – The interconnected program activities and employee tasks. What are the key work processes in your workplace?
- Structure – This includes work units, job design, the span of supervisory control, and delegation of authority. How are your jobs organized – by team, function, location, program unit?
- Systems – The procedures that make your organization work. Do you have the right systems in place?
- People / Skills – The competencies and skills needed to perform the work. Does your workforce possess the competencies and skills required to achieve success?
- Culture – The norms of your organization, the “way we do things around here”. What are the beliefs and values held by your employees? Do they support your strategy?
In Part 2 of this series we will look at applied Organization Design; how to run an OD project and practical tips for success.
Tim McConnell is the Managing Partner of McConnell Consulting Inc. in New York. More information on Organization Design for NPO’s can be found at www.McConnellConsulting-NY.com.