Organisational Design: a major Future Business Driver
JOH Partners had the pleasure of recently sitting down with Mark Lindley HR Director for EMEA and APAC to discuss a number of topics related to the changing world of HR. In the first in a series of thought leadership discussions Mark and Oliver Helvin, Associate Director, JOH Partners discuss how Organisational Design has become a key Business Driver for leading businesses of tomorrow.
JOH PARTNERS: AS A LEADING HR PROFESSIONAL, HOW DO YOU FIND ORGANIZATIONAL DESIGN WORKS ON A PRACTICAL LEVEL?
Mark: If I look at organisational design there have been many companies, pretty much any company I have ever worked for, you assume there is an organisational structure and chart. The reality is, that even if people can find these charts, they are never updated and if they are, there is always a caveat saying “these are subject to change.”
So, my question always back to stakeholders, managers, CEOs and MDs is, why would this be the case? I always find an interesting response is, “Well we haven’t actually found where organizational charts fit. What function is it? HR? the MDs, is it QHSE?” My response is always the same – it belongs to every person that is leading teams within the business.
JOH PARTNERS: THIS IS AN INTERESTING POINT. HOW DO YOU THINK ORGANIZATIONAL STRUCTURES SHOULD WORK?
Mark: As a start, you should be able as a leader (of the whole organization, a region or a team), quickly on a piece of paper, draw your team’s structure and identify any roles that are vacant, why and when is it going to be filled. If you ask people “why are there these gaps?” they often say, “I don’t have the time…things are always changing… this is subject to further changes within the business.” To this, I tend to respond and say, well what you need to look at is, what your organisational structure is now and what you would you like it to be. To be able to answer this and get off that treadmill you need to understand the overarching objective of the business – effectively, what are they there to do?
"Ask people to articulate the vision and you will find that not a lot of people get it right"
JOH Partners: Do you see a disconnect between employees and their understanding of the business goals?
Mark: Completely - people are often not clear on their actual organizational objectives. Sometimes people are not even clear on the vision of the business. You ask people to articulate the vision and you will find that not a lot of people get it right.
JOH PARTNERS: DO YOU SEE THAT THE VISION AND MISSION ARE ACTUALLY ORGANICALLY GROWING OR ARE COMPANIES FORCING PEOPLE TO LIVE THEM?
Mark: That’s a good question, I was speaking to a company a couple of weeks ago and they asked me a very interesting question. They asked, “How do you get people to live to the values?”. My response was, well you can’t force people to live the values if they are not clear on what those values are, or more importantly, why the values were put into place initially. I think within reason, values are fairly standard in the sense that companies tend to have between three to nine values which usually come out of a pool of probably 30 different values. What therefore becomes key is how people link them together and feel that they are the pillars for their business. Evidently some industries are going to put health and safety as their number one value, for obvious reasons, because they are in an environment where health and safety could be paramount or of high risk to injury or worse, every day. Businesses might place integrity and compliance as their number one value, as in their environment this is their key business driver. But where I think companies have great challenges, is that there is not enough linkage. The linkage needs to come, I always say, from the top. The CEO needs to live and breathe the values, they need to know the values, but they also have a responsibility to ensure that the people directly reporting to them understand the values fully too. If it doesn’t cascade down consistently, then you are going to get these levels of disconnect.
In an ideal world, if you did a survey on values and asked employees do you know the values and how to apply them, the CEO, directors, middle management and right down to the front lines should all have pretty much the same answers. If you can’t get that correlation, then there is a disconnect between how the values are being lived within the company.
Values and vision should also not be too static – employees and the culture help develop the values and vision, back in the direction of the business. If you are happy with your company’s values, then great, and if not, then maybe you need to change them.
"People need to be held accountable"
JOH Partners: Once you have your values agreed, what tips do you have to help managers cascade them to their teams?
Mark: Values are also something that people need to be held accountable for, so that when things do go off in a potential wrong direction by any employee in the business, and they are clearly not living the values of that business that there are consequences. Discussions need to be had along the lines of (if a senior manager for example). “Well you aren’t living the values of ‘team work’… because if you were, then we wouldn’t be in this situation, these dysfunctional or fragmented aspects of your team need to be dealt with visibly.”
JOH PARTNERS: SO WHEN YOU HAVE GOT PEOPLE WHO ARE LIVING THE VALUES, HOW DO YOU, IN YOUR CAPACITY AS HR, ALSO ENCOURAGE PEOPLE TO BE CREATIVE WITHIN THESE?
Mark: I think businesses small, medium and large, will always have different levels of agility and rigidity as to how they can apply vision, values and organisational structure. I think with the organizational structure it goes back to that top level: What do we do? What services are we providing? Is it products across the market? What are we delivering? Is our existence based on how effectively or how well we deliver that?
Once that is clear, then you need to look at what resources or which people do we need to deliver our business to its target market. These resource requirements will then be broken down – many will be process related, such as you need people to pay bills, people to recruit, to market, to produce, inspect and such.
"Encourage people to come up with their 'ideal' structure"
The next step then needs to be a level of discussion with the leaders of each function. They should be asked: “If this was your business, and you were running it, then what would you need to ensure that you are going to deliver, meet the required compliance? How will you retain the right people, develop or manage those that may not have the required skillset or experience to support your business unit?” I always encourage people to come up with their ‘ideal’ structure first.
This is often challenging – for example in businesses that I have worked in, the team which probably has the greatest flexibility in structure is usually the sales and commercial environment. They often end up in a cycle where they are asking one of these three questions:
Why aren’t we selling?
Why aren’t we generating revenue?
Do we have the right people selling?
In structuring discussions, they’ll do one of two things, they’ll either want to expand their headcount in the sales teams, or they’ll say, we’ve got the wrong people in. In the latter case they will often bring people in from closely aligned competitors or bring people in that they ‘believe’ have a perceived great attitude and then they can grow into the role. However, in my experience, the managers of these teams never seem to get total clarity on what they need.
So, if we are looking at the organizational structure, getting this clarity of business objectives and values in place is key. To keep these alive, they should be spoken about weekly at team meetings. I find this clarity prevents conversations where people say “We’ve not got the right people”. It’s more about having the right structure and ‘then’ the appropriate resources. We then need to ask where the gaps are and what are we doing to close these on a weekly basis.
In summary, you cannot underestimate the importance of knowing what the business’ overall goals are and how your team fits into them, if you are to establish an organizational structure which can work to improve the output for both you and your team.