Why Organizational Design (OD) is a Business Imperative, Not Just an HR Function

We have all witnessed firsthand how business landscapes evolve, often faster than organizations can adapt. The most successful organizations don’t just react to change — they anticipate it.  And at the heart of this adaptability lies Organizational Design (OD). It’s more than a set of HR processes or structural tweaks to org charts; it’s a powerful business discipline and tool that drives agility, efficiency, and alignment across an entire organization.

So why, then, do many companies still view organizational design as an HR responsibility, separate from the day-to-day operations of the business?

The Disconnect Between HR and Operations

Having been a Chief Operations Officer and company owner prior to moving into a HR career, I have seen a disconnect more often than not. Business leaders mistakenly assume that OD is purely a function of the HR department. They wait for HR to facilitate organizational change. HR, on the other hand, assumes that it is Operations responsibility to initiate organizational change. And, depending on what HR does for the company, many HR teams don’t even have people on staff that know how to do Organizational Design.

While HR plays a pivotal role in the implementation of change, Organizational Design is a critical business strategy.  It should be aligned directly with the organization’s mission, vision, and strategic goals.

At the highest level, OD is about designing systems, roles, and structures that enable the organization to execute its strategy efficiently.  When the design of an organization is disconnected from its strategic vision, employees and leaders alike are left scrambling to make sense of their roles, contributing to silos, inefficiencies, and disengagement.

The Strategic Role of Organizational Design

Organizational Design is about optimizing how work gets done, ensuring that roles are structured to maximize both individual performance and cross-functional collaboration. It’s the framework that enables an organization to adapt to changing market conditions, foster innovation, and enhance the employee experience.

I learned firsthand that the following three things are key elements of OD that are critical to driving business performance:

1.       Aligning Structure with Strategy

An effective organizational design ensures that the structure directly supports the business strategy – and by that, I mean, its business model. It should answer the question, ‘what are all the things we need to do to make this make money?’

In today’s dynamic marketplace, organizations often need to shift from rigid hierarchical structures to more flexible, networked models that can pivot quickly.

2.       Empowering Cross-Functional Collaboration

Once that finite list of ‘all the things we need to do to make this make money’ is created, successful organizations create functions (aka departments) that make sense while breaking down silos and encouraging collaboration across them. Leaders of individual business functions need to talk openly about what they do and ensure there is minimal to no overlap in responsibilities and roles.

The right OD approach fosters seamless communication and shared accountability across departments, which in turn leads to faster decision-making and problem-solving.

3.       Building Organizational Resilience

A well-designed organization can weather uncertainty and adapt to change without losing momentum. Effective OD helps businesses stay resilient by building a culture of continuous learning and empowering leaders at all levels to drive change.

What Does It Take to Get It Right?

To move beyond the “HR-only” view of OD, business leaders, especially those responsible for back-office operations functions like general management, finance, accounting, IT, HR, payroll, marketing, PR, legal, purchasing, etc. must be actively engaged in the design process.  HR should act as a strategic partner to business operations, ensuring that organizational design is aligned with the broader business objectives.

Here’s how HR leaders can ensure successful OD initiatives:

• OD must be directly tied to business outcomes. It should reflect the company’s business model (i.e. how it makes money). HR should work closely with leadership to identify strategic priorities and align the organizational structure accordingly.
• Consider the employee experience: Companies make money because the people and technology within them. Organizational design isn’t just about efficiency—it’s about creating an environment where employees feel empowered and connected to the organization’s mission. Incorporate feedback from employees at all levels to ensure the design supports a positive work culture.
• Keep the future in mind: As we move into an increasingly agile and digital world, organizations need to be future-proof. OD must not only address current needs but anticipate future shifts in technology, workforce demographics, and global markets.

Organizational Design is not just an HR initiative—it’s a business imperative. The organizations that succeed in today’s fast-evolving, chaotic world are the ones that embrace a holistic approach to OD, ensuring that their structure, strategy, and culture are in lockstep. As HR professionals, we have the opportunity to lead this transformation, working in tandem with business leaders to create organizations that are not only efficient but also resilient and adaptable.

People Matter in Business.

Cindy Goyette, SPHR, MAOM, CC – cindygoyette.com 2025

Accountability, Company Culture, Organizational Effectiveness, People Matter, Performance, Productivity