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Organizational Design: Get it Right or Risk CRM Failure

Nearly every article on CRM references organizational challenges as a common barrier to success. Yet businesses continue to overlook organizational development aspects of the customer centric initiatives. Technology, data, and analytics are tangible elements of CRM, while organizational development remains elusive.

So what is organizational development?

There are several approaches, models, and theories on the topic of organizational development dating back to the 1950s, but one that I find particularly applicable to CRM adoption is Jay Galbraith’s Star Model. The Star Model introduces an organizational design framework made up of the five points on a star: Strategy, Structure, People Practices, Processes and Capabilities, and Reward Systems.

  • Strategy: the vision — the value proposition that differentiates a business from its competitors in the minds of the consumers. Whether it’s product-focused, operational-focused or customer-focused, strategy is the basis for all other aspects of the organization.
  • Structure: the roles, jobs, and teams — the associated reporting relationships that make up the bones of the organization. The most common structures are functional, geographic, product-based, customer-based, and front-back hybrid.
  • People Practices: the recruiting, development, and performance management to attract, develop, and retain staff.
  • Processes and Capabilities: the formalized (e.g., task forces, documented processes) or informal activities (e.g. networks that enable work getting done) that propel information and decisions forward, across functions.
  • Reward Systems: the values and behaviors necessary to make the organization successful, ways of measuring those behaviors across individuals and teams, and the compensation, incentives, rewards, and recognition to drive the desired behavior.

These principles have served our client base well across multiple industries, with the latest being a retail banking client focused on transforming into a more customer centric organization. Often overlooked, a business’s ability to succeed hinges on organizational effectiveness. Don’t let bad organizational design hinder your success. It’s more concrete than you may think.

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