Building agility and adaptability

Mercer’s organization design consulting helps you transition from a traditional multilayered organization to a simple, agile and distributed structure.
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Business goals need to be supported by the right operating models

Organizations must make complex decisions as they mobilize to achieve their business goals. Faced with competing priorities, limited resources and unsuitable operating models, many fail to reach their objectives.

The opportunities, challenges and barriers organizations may face include:

  • Enabling growth, faster decision-making, innovation and greater agility
  • Organizing work in the post-COVID world
  • Becoming truly customer-focused
  • Aligning workforce transformation to organizational structures
  • Making their strategy work 

Under increasing internal and external pressures, there may be a temptation to implement reactionary initiatives that might look good in the short term but do not deliver lasting impact. To overcome challenges and realize their business strategy, leaders must rethink how their organization functions and design operating models for sustainable outcomes.

Organizations can achieve their business objectives by getting the fundamentals right, beginning with holistically (re)designing business models, structures, processes, capabilities, governance, ways of working, metrics, incentives, funding and resourcing.

Greater adaptability delivers clear business benefits. Responsive companies’ revenues grow 37% faster and generate 30% higher profits than non-responsive companies.

The pillars of agile organizations

To thrive in times of transformation, organizations must continuously assess and align their business and organization models, people practices and culture. High-performing organizations consistently ensure alignment of these aspects to sustain success and deliver on their business strategies.

High-performing, agile organizations:

  • Embrace an aspirational purpose and clearly communicate their strategy
  • Monitor the environment and respond quickly
  • Know how they create, capture and deliver value
  • Test, learn and iterate
  • Have the ability and capacity to change and reconfigure their resource base quickly

Continuum of choices in organization design

To help organizations frame their decision making, we propose five dimensions of organizational design. Each dimension represents a spectrum of choices leaders must make, and any choice has broader organizational implications.
The graphic lists five dimensions of organization design. Under each dimension sits a spectrum of options labelled at each end with corresponding characteristics. The first dimension of organization design, stakeholder engagement, ranges from focused to complex. The second dimension, breadth of focus and scope, ranges from narrow to broad. Structure and governance ranges from locally embedded to centrally managed. Resource management ranges from stable to fluid. The fifth dimension, metrics, incentives and funding, ranges from role/project based to embedded organizationally. 

Organization design options

There’s no one-size-fits-all approach to creating an agile organization; there are several ways to inject agility. Some methods will be more suitable than others for different areas of your organization, with ease of implementation decreasing and the level of agility increasing as you move along the continuum. A few of the options that Mercer recommends include:

People work primarily in line organization but also contribute to cross-functional initiatives or projects (for example, an 80/20 split).

Self-organized (not self-directed) teams define their ways of working and are jointly accountable for employee-to-employee performance.

Sharing and sourcing capability across platforms or defined ecosystems (managing access rather than ownership of resources).

A pool of individuals staffed to different activities full time, based on the priority of needs — assignments can vary from hours to months.

Coordination between product owners and chapter leads to determine priority and vision; outcomes achieved through cross-functional teams (organized, for example, in squads and tribes).
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