What Every Organization Design Needs

Drawing-of-480-sqft-log-cabin

At the start of a recent organizational design the leader asked me to provide a list of outcomes for the effort. Being a good consultant, I turned the question back on him. I explained that he and his team needed to craft the specific design principles that they hoped to accomplish via our work. The leader pointed out that over the decades that I have helped organizations I must have observed some high level outcomes that should be true for all design efforts.

This leader had a good point. His question led me to develop the below list of general criteria that I have sought in every design I have ever facilitated. I often use building a house as a metaphor for carrying out organization design. Just as every house needs a foundation, walls and a roof, every organization design needs to have the below conditions:

  • Strategy and Goals
    • Supports business strategy, sales, productivity
  • Culture and Readiness
    • Fits our organizational culture and people are ready/able/willing?
  • Role Definition and Alignment
    • Leads to clear roles/alignment across the organization?   Enough resources?
  • Operational Model
    • Can be implemented? Appropriate span of control? Supports work flow?
  • Risk and Cost
    • Level of risk acceptable /mitigated? Power balanced? Cost acceptable?

This list turned out to be a good high level scorecard for what our successful organizational configuration should look like. I think we can all agree that all organizational designs need to be able to be operationalized at an acceptable level of risk and cost, while accomplishing the strategy and fitting with the culture. If any one of these key criteria was missing we would consider our work a failure.

Yes, the specific design criteria that an organization seeks such as agility, more collaboration, better products, etc. are still in play. However, the above bigger picture criteria must be true!

Note: This blog does not reflect the views of my employer.

Focusing on How to Execute Your Strategy Improves the People Side!

Keep Calm and Get Things Done blue sign

Keep Calm and Get Things Done blue sign with a crown making a great concept.

We have learned that some organizations execute their strategy based on the amount of money they have available in the bank, the skills of their current workforce or educated guesses about where the business environment is headed. However, more mature organizations are executing strategy by identifying and filling gap between the business capabilities they have today and the capabilities they need in the future. Doing so results in improvements across your organization – even in areas where you did not expect to see wins such as your structure, processes, people and even culture!

Business capabilities are what differentiates the organization and ensures that it is equipped to execute its strategy. Capabilities are the “What” is needed in order to execute, followed by the “How” to achieve the desired result. These are the operational things or what the organization must know how to do to execute strategy. For example, a manufacturing firm must know how to design and create innovative products. [http://www.accelare.com/strategy-to-execution]

What is a capability-driven organization good for? In short, running your organization based on capability models can improve your design, implementation and outcomes. Capability based planning involves getting real about what is needed to execute and about getting to the root cause of issues that are holding you back. As a result, capability-driven efforts improve:

• Strategy: Unpack strategy as part of exploring capabilities allowing strategy to become much more clear and likely to succeed

• Structure: Employ a capability based organizational design which ensures accountability of capabilities to execute the business strategy. [And bust through silos!]

• Processes: Improve the series of connected activities that make up the work you carry out for efficiency/effectiveness

• People: Clarify the skills, knowledge and abilities needed in order to deliver so that human resources are operating at peak performance

• Culture: Amp up the beliefs, values and norms which represent your organization’s unique character and makes it what it is

For example, a health insurance company adopted capability based planning solely to improve their performance via better execution of strategy. However, over time I observed that the strategy to execution work was positively impacting other aspects including people becoming more collaborative, processes becoming more efficient and technology tools becoming more useful for end-users. In fact, a common refrain from employees on the ground was that the culture had improved.

Hard to believe that capabilities can improve all these areas? It is not surprising given that capability based planning involves figuring out what it will take to succeed from a People, Process and Technology point of view and filling these gaps. This is all about becoming a high performance organization. A simple formula that works.

What challenges are you facing that may be solved through capability based planning?

Note: The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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Aligning Strategy with Employee Values for Improved Organizational Performance

Values Vintage Letterpress Type in Drawer

The word “VALUES” written in vintage metal letterpress type in a wooden drawer with dividers.

Part 3 of 4 part blog series discussing employee motivational challenges.

Tackling strategy, and the corresponding projects, in a manner which fits with the organizations’ larger culture, leads to employees with enthusiasm (and even passion) for their efforts. This is about helping employees feel part of an effort which is bigger than themselves. As a result, your workforce will be connected and committed to your efforts.

You are providing your workforce with purpose since their efforts have meaning for them. Employees signed up for a tour of duty with your organization because of your culture, mission and values. If you are asking your employees to execute a strategy or carry out projects which are inconsistent with fundamental tenants of who they are, employee motivation will plummet.

Garth Morgen (1986) sums up the ability of organizations to chart their own destiny perfectly in his classic book Images of Organization:

“By appreciating that strategy making is a process of enactment that produces a large element of the future with which the organization will have to deal, it is possible to overcome the false impression that organizations are adapting or reacting to a world that is independent of their own making. This can help empower organizations to appreciate that they themselves often create the constraints, barriers, and situations that cause them problems.” [p. 137]

Case and Point:

The Situation: A nonprofit organization I worked with launched a state-of-the art technology learning center in the heart of a booming metro area. The center attracted mainly business people who worked near the center who had no problem paying top dollar for the Internet and application training.

The Challenge: The center was exceeding goals in terms of usage and financial results. Who could find any fault in such a successful endeavor? The answer is mission driven employees at the nonprofit who were advocates of the organization’s educational efforts aimed at disadvantaged populations. This new effort, aimed at serving the business community, did not fit with these employees’ values, nor their belief about the mission of the nonprofit.

The Outcome/Lesson: All the success in the world was not going to move the employees of the organization to be fully behind the business focused technology project. How could this effort be fully embraced when it was not fully aligned with the mission of the organization? Over time, the educational efforts of the nonprofit shifted back to serving the core audience.

Key Questions: Sense of Purpose and Connection
• Is there a clearly articulated and understood employee value proposition?
• Are there mechanisms in place to help ensure that the strategies being considered are aligned with the employees’ values and beliefs about the purpose and mission of the organization?
• Do employees feel their work adds value to the organization?

Note: The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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Process Improvement: Let’s Understand the Basics Before Going to the Complex

Process Improvement  on Metal Gears.

Process Improvement on the Mechanism of Metal Gears.

Process improvement professionals tend to do a deep dive into the methodology immediately after an introduction.  The conversation tends to go something along the lines of “Nice to meet you as well, do you use the DMAIC approach to get at root cause?”  While this is an important question, let’s consider a few fundamental questions which may be useful to understand before we debate methodology.

A Definition of Process improvement

Process improvement is essentially an exercise in problem solving.  One is typically trying to address an organizational problem or create an opportunity.

  • A problem is some unwanted state of a person, place, thing or operation.
  • Problem solving transforms the unwanted state into a wanted state—e.g., Customers who are complaining about poor quality are satisfied with your product.
  • The process consultant typically facilitates the organization to reach goals and create transformative change.

A Process Improvement Approach

The process improvement problem solving approach is typically carried out by considering the individual presenting symptoms (indicators of an issue) and extracting the root cause(s).  You then develop solutions for the root cause(s) to help ensure that you are solving for the key issues versus symptoms…

Process Improvement Outcomes

Process improvement can have a positive impact on a number of organizational areas

  • Build a sustainable, competitive advantage globally
    • Invest in process management to deliver meaningful results
    • Common to see a 2-3 times return on investment of your resources
  • Support organizational strategy, goals, and objectives
    • Sustain growth of the enterprise: Revenue and earnings
    • Accelerate, expand and improve what you are already doing
    • Build competencies globally
  • Build a culture for growth
    • Provide a common approach to process improvement
    • Develop transferrable leadership skills at all levels
    • Enable predictable processes, innovation, and growth

So let’s consider the definition, approach and outcomes of process improvement before we get into more heady discussions.  I find that when my clients understand these baseline concepts we have a much more useful discussion re: the more advanced topics.

What additional fundamental process improvement topics do you find are useful to discuss?

Note: The views expressed in this blog are my opinions and do not in any way reflect the views of my employer.

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