National Academies Press: OpenBook

Primer for Airport Organizational Redesign (2022)

Chapter: Chapter 2 - Understanding Organizational Redesign

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Suggested Citation:"Chapter 2 - Understanding Organizational Redesign." National Academies of Sciences, Engineering, and Medicine. 2022. Primer for Airport Organizational Redesign. Washington, DC: The National Academies Press. doi: 10.17226/26642.
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Suggested Citation:"Chapter 2 - Understanding Organizational Redesign." National Academies of Sciences, Engineering, and Medicine. 2022. Primer for Airport Organizational Redesign. Washington, DC: The National Academies Press. doi: 10.17226/26642.
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Page 6
Suggested Citation:"Chapter 2 - Understanding Organizational Redesign." National Academies of Sciences, Engineering, and Medicine. 2022. Primer for Airport Organizational Redesign. Washington, DC: The National Academies Press. doi: 10.17226/26642.
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Suggested Citation:"Chapter 2 - Understanding Organizational Redesign." National Academies of Sciences, Engineering, and Medicine. 2022. Primer for Airport Organizational Redesign. Washington, DC: The National Academies Press. doi: 10.17226/26642.
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Page 7

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4 Organizational redesign is a methodology that identifies aspects of workflow, procedures, struc­ tures, and systems that may be identified for improving organizations and how they function. The redesign process focuses on improving both the technical­ and people­side of the business. As such, organizational redesign is used to establish new ways of operating, working, collaborat­ ing, and determining how work gets accomplished. Fundamentally, redesign is about applying the structural design of the organization to translate business strategy into operational reality. While organizational redesign may be challenging, using the core components of redesign is essential for identifying how the future of the airport is shaped. The components of organiza­ tional design leverage the seven themes that emerged from the annotated bibliography: structure, processes, culture, people, systems, contextual setting, and leadership. Using the annotated bibliography, reputable organization redesign models were reviewed to identify themes and best practices. The models included The Center for Organizational Design’s Transformation Model (1), McKinsey’s 7S Design Approach (2), Organizational DNA Approach by Estupiñán and Neilson (3), Keidel’s Organizational Design Approach (4), Galbraith’s Star Model (5), Weisbord’s Six Box Model (6), Academy to Innovate HR’s Organizational Design Principles by van Vulpen (7) and ICF’s Four Prongs of Organization Redesign (forthcoming). Each model offers important decision points to consider when redesigning an airport as a whole or restructuring a division or function. For example, these models highlight contextual com­ ponents that may influence whether a redesign initiative reaches full implementation and is sustainable. Reoccurring themes include the inability to conduct redesign in a vacuum, the interconnectedness, inter section, and intertwining of elements within redesign models, and the influence of internal and external factors impacting redesign. Another best practice is the necessity of understanding that organizational design is a con­ tinuous process, not a single event. Not only that, but organizational alignment is based on how well the structure, processes, rewards, and people practices reinforce the desired actions and behaviors. When it comes to outlining the business strategy, the strategy should specify the criteria necessary for determining the priority task to accomplish, and the organization should then be designed to meet those criteria. It is important to consider that when conducting redesign, there are also consequences of a non­aligned organization. For instance, if the structure is not aligned to strategy, then resistance or confusion from key stakeholders and staff may occur as to why the structure needs to change. Further, it may prove particularly challenging to mobilize the resources necessary to enact and sustain redesign plans. Finally, a failure to align structure to strategy means the structural changes are being pushed along without a clear vision. Lack of vision most often translates to failure from the onset. The seven components of organizational design that resulted from the annotated bibliography and comprehensive literature search on organizational redesign include: C H A P T E R   2 Understanding Organizational Redesign

Understanding Organizational Redesign 5   1. Structure: How people are organized hierarchically, how organizations form to conduct business, and how organizations use their line of businesses to strategically achieve out- comes. Organizations with a dynamic structure that can be easily and proactively recon­ figured may better take advantage of market opportunities, and the organization’s design is viewed as a competitive advantage. Also, they can quickly combine and recombine skills, competencies, and resources across the enterprise to respond to changes in the environment. Dynamic structures are characterized by active leadership, knowledge management, learning, flexibility, integration, employee commitment, and change readiness. 2. Processes: The methods and technologies organizations leverage to guide organizational effectiveness, steer employees in completing tasks, and streamline decision-making. Orga­ nizations foster commitment to the outcome of the organizational redesign when organiza­ tional members are highly involved in each aspect of the redesign from start to finish. As the airport makes decisions about the structure of its organization, the airport must reevaluate whether its current business processes still make sense and result in effective and efficient decision­making. Making sound decisions may require a framework for considering the adoption of one business process over another. With a guiding framework, the selection or elimination of specific processes will be based on clear rationale and promote buy­in by those responsible for executing the processes. It is important that as new processes are executed and institutionalized as part of a redesign, the new processes follow alongside a longer­term strategy rather than more immediate demands on the airport. Ultimately, an airport that evaluates each business process, maps process flows and swimlanes (i.e., who “owns” the pro­ cess), and justifies the purpose for each during redesign will have a better understanding of why certain changes are more difficult than others to implement (i.e., the root cause for any resistance) and will promote alignment throughout the redesign implementation. 3. Culture: The set of values, ideals, and beliefs shared by employees. Culture is influenced by approaches to communication and collaboration, managerial styles, and behaviors. Employee motivation can differ based on the culture of the organization. Culture contains elements of structurally sustainable reorganization that can be used as readiness factors to drive change. Alternatively, focusing on culture and its elements may show resiliency factors needed to sustain changes and mitigate negative impacts. Dynamic, reconfigurable organizations are characterized by people practices and cultures that support learning and developing strategi­ cally important capabilities. 4. People: The type of talent and skill sets that should be hired across departments to meet company-wide goals. People need to have a clear view of what success means. During rede­ sign, organizations aim to identify or grow the talent required by the new strategy and struc­ ture of the organization. This process of redesign often presents changes to the existing skill gaps whether those are magnified in importance or become less relevant. While redesign should always be first about job mapping and then about placing the right staff in those roles, versus mapping based on current staff capabilities, it is important to ensure staff are highly engaged in the redesign and can voice their interests and capabilities to perform new roles. The airport must pair its approaches to developing current staff and hiring new talent based on the new roles and job demands created as a result of the redesign. 5. Systems: The processes for guiding organizational change, interdepartmental collabo- ration, or resource allocation. Reward systems define and encourage expected behaviors. They align the goals of the employee with the aims of the organization. The most important challenge is identifying systems that incentivize collaborative behavior throughout the orga­ nizational redesign. 6. Contextual Setting: Internal and external factors that shape an airport. The external contextual setting consists of factors outside the airport that can influence or be impacted by airport performance and outcomes. Internal factors are aspects of airport jobs and employees as they relate to those jobs. The environment outside an airport changes rapidly

6 Primer for Airport Organizational Redesign and is turbulent, so it is important that airports consider how these environmental changes that comprise the contextual setting will affect their future operations. Organizations should be able to change as rapidly as the environment does, and agility should be a consideration from the outset of the redesign. 7. Leadership: Those in a position to enact change, demonstrate support for change, and influence others to achieve success following changes. Starting from the very top of the organization and trickling down, leaders must set goals, monitor results, scan the external environment, define vision and strategy, design (consciously or by default) the infrastructure of the airport organization, develop people, and build culture. Without all layers of leadership, even down to the frontline leaders, being fully committed to the redesign objectives, it will be nearly impossible for the airport to recognize successful implementation of the redesign. Interestingly, the current trend of enterprise leadership is to de­layer and flatten leadership teams, which means all personnel need to have a clear understanding of their role in leading the organization through redesign changes. Fewer layers of management can bring decision­ making and communication closer to customers, develop more autonomy and accountability lower in the organization, as well as decrease operational costs and inefficiencies. Organizational redesign involves the integration of structure, processes, culture, people, systems, contextual setting, and leadership to support the implementation of strategy. Facets of redesign are interdependent, and one is not intrinsically better than the other. Organizations ought to choose a design that matches their strategies and goals, suits their environment, and is right for their people. Best Practices to Achieve Maximum Benefits During Organizational Redesign Best practices should be considered when undergoing an organizational redesign to avoid common pitfalls such as frequent changes of direction or stalling and failure to meet intended objectives or improve organizational performance. Before undertaking a redesign, airport leader­ ship and managers should assess the core competencies of the organization (8). Core competen­ cies are the capabilities and resources present within an organization that allow it to operate successfully and provide the organization with a competitive advantage. They are derived from the skills and abilities of staff, unique resources specific to the organization, and the ability of the organization to successfully coordinate resources. When planning an organizational redesign, leadership should develop a strategy that leverages and expands existing core competencies to create the most value for the airport. As part of this strategy, airport leadership should identify training or developmental opportunities that will be needed for staff to operate successfully in the new organizational structure. Leadership should also scan the surrounding environment— including other industries—to gain awareness of changes that may impact their airport oper­ ations, identify innovations that may benefit their airport, and understand potential future industry trends. Organizational culture, both at the overall organization level as well as the departmental and division levels, is also critical to consider during organizational redesign. Organizational culture is a shared set of embedded values that members of the organization use when interacting with each other and stakeholders. It gradually emerges based on a variety of factors including char­ acteristics of the organization’s ethics, structure, and leadership and management. Overall, to maximize the benefits of organizational redesign, the process should be guided by a strategy that leverages and grows core organizational competencies, taking into consideration both the func­ tional structure and organizational culture. Further, by understanding the culture and values of the organization and the micro­cultures across divisions, airport leaders can tailor communica­ tions about impending changes to the topics that will best resonate with the workforce.

Understanding Organizational Redesign 7   Chapter 2 References 1. Allen, Roger K. 2015. “The Transformation Model” (website). The Center for Organizational Design. http:// www.centerod.com/2012/02/transformation­model/. 2. “McKinsey 7S Model” (website). Strategic Management Insight, updated November  11, 2021. https:// strategicmanagementinsight.com/tools/mckinsey­7s­model­framework/. 3. Estupiñán, J., and Neilson, G. L. 2014. “The 10 Principles of Organizational DNA.” strategy+business maga­ zine. https://www.strategy­business.com/blog/The­10­Principles­of­Organizational­DNA. 4. Keidel, R. W. 1994. “Rethinking Organizational Design.” Academy of Management Perspectives, 8(4), 12–28. 5. Galbraith, J. R. n.d. The Star Model. https://www.jaygalbraith.com/images/pdfs/StarModel.pdf. 6. Weisbord, M. R. 1976. “Organizational Diagnosis: Six Places to Look for Trouble With or Without a Theory.” Group & Organization Studies, 1(4), 430–447. 7. van Vulpen, Eric. n.d. “Organizational Design: A Complete Guide” (website). Academy to Innovate HR. https://www.aihr.com/blog/organizational­design/. 8. Jones, G. R. 2010. Organizational Theory, Design, and Change, 6th ed. Prentice Hall.

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Periodically, airports want to redesign their workforce and organizational structure. They are seeking to be responsive to their current and emerging business needs, which can change over time.

The TRB Airport Cooperative Research Program's ACRP Research Report 240: Primer for Airport Organizational Redesign provides guidelines for airport leaders on strategies and steps as they navigate the process of reorganizing their structure.

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