When considering reducing the cost of an organisation, our brains can naturally flick to radical ideas; how much could we do? Can we employ robotics? Is our location strategy efficient? Do we need to redesign our entire operating model?
But what if what the business actually needs is to generate immediate savings, with certainty to make the right choices while limiting the unrest caused by change? What if overall the business is driving the right outcomes but we want to ensure that it is also efficient?
At one end of the cost transformation spectrum, this could mean full redesign of a team or organisation. At the other, this could be a tactical review to identify a few quick options to increase efficiency that are easy to deliver and create minimal unrest within the workforce.
A tactical review can often shine a light on things that anecdotally an organisation might be aware of but hasn’t had the time, or evidence, to tackle. By using tools to interpret data, it’s possible to highlight potential areas of inefficiency, such as too many reporting layers in a structure, duplicate teams carrying out similar activities or managers running small teams without justification.
When running tactical organisation design projects it is key to run consultative sessions with leaders to discuss the findings. Armed with the data, a process of co-creation enables us to generate ideas that won’t “break” the business. Engaging individuals in conversations that are difficult to have, understanding what the best-in-class organisations are doing and where their efforts are focused. These tactical reviews can provide the insight to spur transformation, allowing teams to think differently and focus on what’s next…
To do this, it is important to encourage sustainable behaviours by working to a set of agreed guidelines. As an example, insisting on a blanket minimum team size for managers can create nonsensical reporting lines, but optimising team size on the basis of team activities and desired outputs can challenge the status quo and create effective (and reimagined) structures.
By employing the approach outlined, organisations can continually review their structures (for example, through services such as periodic reviews or health checks), in order to ensure structures are comprehensively and regularly assessed to drive relevant behaviours in the business.
In 2019, at one UK General insurer, our tactical organisation design work contributed more than 30% of an annual savings target and even brought about commitment to combine functions and think differently about how work gets done across business units. The work demonstrated that tactical cost reviews are more than a gateway to sustainable savings, they are also a means to challenge leadership on wider conversations about their more radical ideas.
It is human nature to think big when presented with business challenges, but by using data to pinpoint areas of incremental improvement you can highlight the recurring value in doing the small things well.