Designing government bodies to deliver on priorities: A how-to guide

With an election around the corner, departments and agencies must prepare for potential machinery of government (MOG) changes. While the changes are usually beyond their control, that does not mean the process needs to be entirely a reactive one. Indeed, any organisational change, regardless of whether it arises from a MOG change or not, presents an opportunity to actively re-think the department or agency’s role, its strategic priorities, and how well it can be set up to deliver on its objectives.

Unfortunately, when these opportunities arise, many senior leaders default to familiar organisational structures or the consensus of their executive team, which can jeopardise the organisation’s success. 

This article provides guidance on how to align your agency, group, or division’s constituent parts, and to help it deliver on your priorities and objectives. It draws on Nous’ Organisation Architecture Framework and our proven six-step model for designing organisations, developed over the course of 15-plus years’ experience reviewing hundreds of government entities at the Commonwealth and State level, and working with them to design fit-for-purpose organisation structures.

When setting up or restructuring a government agency, it is always useful to start with the fundamental questions about role: the role of government in the space where you are operating, and the role of the agency as set out in any enabling legislation or any ministerial directives. Then you can turn your attention to key outcomes and priorities. The reason for asking these foundational questions first is that it can prompt a re-imagining of what you do and how you do it, rather than simply thinking in terms of rearranging the furniture.

Summarise what the government expects the agency to deliver. If possible, try to identify higher versus lower priorities. At this point, it is pertinent to also consider the forward budgets and approved FTE relative to current state. The output should be one- or two-pages, with a prioritised summary of what is expected of the agency. 

Next, develop a short set of criteria to help select between different organisation structures. Nous often develops criteria drawing on the work of Goold and Campbell, which considers alignment to strategy as well as general principles of good organisation design, such as removing duplication of roles (see below). 

The criteria need to be defined in a way that they help select between different organisation structures, identifying the structure that best fits the criteria, and that will best deliver the outcomes sought from the organisational restructure. Examples of criteria include maximising spans of control, minimising the number of layers, and group and centralise similar work or capabilities (where possible). Save $𝑥 million can also be a valid criterion.

Again, this step provides an opportunity to challenge your own assumptions about hierarchies and the alignment of functions. Maybe the organisational redesign can open up new ways of working, or create different models for accessing specialist expertise. 

When Nous does this, we work closely with our clients to refine and weight these criteria, as this not only ensures a well-informed and appropriate set of ‘tests’ but helps build broader buy-in to the final preferred structure.

Staff engagement and consultation is of course important throughout the process. In the early stages of an organisational design project, Nous recommends: 

• An up-front briefing advising that the work is underway, outlining the timelines and opportunities for staff to provide input.
• Opportunities for staff to provide input on key aspects of the organisational redesign. Ask questions like: “What isn’t working well?” “What is, and shouldn’t be lost?” “Are there ideas for improvements in how the organisation works?”
• During the project, provide updates on process against the timeline so people know where the work is up to and when a draft structure will be announced. 

You should next develop a taxonomy of the different types of work (functions) the agency should do. Functions could fall into categories of policy development, program management, regulation, service delivery, corporate functions and so on. Next, for each function, identify the work to be done at the next level of detail down (sub-functions). For instance, under a grants programs function, the sub-functions might include designing grants programs, managing grants programs, auditing grants programs, and reporting on outcomes of grants programs. 

Depending on the size and complexity of the agency, the outputs of this step are likely to be between 50 and 100 functions and three to nine sub-functions for most functions. 

Next, brainstorm possible future organisational structures. This is where all the different ideas about possible structures can be brought into the process in a productive manner. Be sure to let stakeholders know that the team have included their recommended structure for consideration. 

Nous once worked with the CEO of a large water utility on a new organisational structure. On day one, the CEO put his proposed future organisation structure to the Nous team. We suggested that we follow the rigour of the process, and that the CEO’s suggested organisation structure be one of the possible organisational structures to be considered in the next step. To his credit, the CEO agreed, and his structure was one of those rated using the criteria. It wasn’t the structure that received the highest rating, or the one the company ultimately adopted, but the CEO was comfortable that the robustness of the approach delivered the best design for the organisation. The value of the criteria and assessment approach set out in this article is that it enables a more robust approach than the otherwise subjective views of participants. 

Actively seek to identify very different organisational structures, rather than variations on the current one. We usually aim to create four to five as-different-as-possible structures for consideration.  To provide decision makers with clarity, ensure that there is a list of the key functions and sub-functions that each group will perform under each possible organisational structure.

The next step is to rate the identified possible organisation structures from Step 3, using the agreed decision criteria. This can be done in a spreadsheet with numeric weightings and ratings of each possible organisational structure using a 0-5 rating scale, or using low, medium, and high ratings (see example below). 

It is important to determine at the outset of the work who will be making the decisions, and the roles of other key stakeholders. Generally, the Secretary or agency head, rather than the full executive team, should make the decisions, the better to enable a top-down assessment of the options and whole-of-agency decisions. 

The next step is to write up the preferred organisation structure in more detail, and then to test it with senior staff. Draw the top-level structure and ensure all the functions and sub-functions have been allocated to a group. Consider:

• Key work that the agency will undertake: Is it clear how that work will be done and which groups will do what?
• The main interfaces and coordination mechanisms required between groups and divisions, and between the agency and other agencies and key stakeholders: Is it apparent where the point of contact will be for external stakeholders and how to access a functional area?
• Important decisions the organisation will need to make: Is the decision maker identified by a position within the structure or will there need to be governance mechanisms established and presented alongside the organisational structure to show where decision making occurs and how it is supported?  

Once the top-level draft design is complete, there are two possible pathways. Some agencies try to map out each layer of detail, layer by layer, over months or even years. Other agencies do faster analysis for each group or division, fleshing out their organisation structure in terms of deliverables/accountabilities, reporting lines, required capabilities, FTE at each classification level, and measures of success for the whole organisation. 

Nous generally supports the latter approach. The uncertainty of the detailed, layer-by-layer analysis over long time periods approach is very unsettling for staff. Rather, leaders should quickly determine the most likely top-to-bottom organisation structure, then run consultations and engagement. 

Staff consultations, undertaken in accordance with any Enterprise Agreement arrangements, are an important part of testing and finalisation of the new organisation structure. Test emerging designs with a small group of internal stakeholders and then run staff consultations in line with the organisation’s enterprise agreement and Regulation 2.09 of Fair Work Regulations 2009. The consultations should be designed to provide a range of channels for feedback. Communicate the proposed structure with detailed briefings on the mapping of current roles to new roles, and on timelines for consultation and, once the design is finalised, target dates for implementation. 

Consider the feedback and, if warranted, adjust the proposed organisational structure Collate and be clear on the response to each piece of feedback received. Nous usually prepares a spreadsheet summarising each item of feedback, the decision/response to that feedback and the rationale for the selected response.  

Based on the feedback from consultations, finalise the organisational structure and the modelling of where each current role and person will or won’t be within the future structure. For those who won’t have an ongoing role, work with relevant teams to implement the structure, in accordance with your obligations, and ensure that dignity is afforded to people who are impacted by the change. For those who will have a role in the new structure, ensure each team’s organisation structure is clear, and that each role has a relevant role description. 

It is important to plan the changes well, and to ensure that good, clear briefing materials are provided. Set a changeover date when people will move into the new reporting structure. Don’t leave it too far in the future as it is hard for the organisation to be fully effective during this period before moving to the new structure.   

The six steps above set out how to successfully redesign an agency, group or division. Following them can help senior leaders avoid the most common mistakes in organisational redesign, including the establishment of structures that are not set up to deliver on the expectations of the agency, inability to manage and coordinate the work that needs to be done, and low staff morale and negative customer outcomes due to endless delays in moving to the new structure.

Get in touch to discuss how effective organisational design can help your department or agency deliver on its priorities.

Connect with Greg Joffe on LinkedIn.

Prepared with input from Tanya Smith.