Creating Organization Structure – Strategy, Operations and People

  

There are so many views about how does one create structure for an organizations that usually it boils down to ones conviction about what will work and what will not work. Given the far reaching impact of structure on delivering strategy, unfortunately this can have unpredictable implications. In addition due to the lagging effect and gestation period, it’s too late by the time one discovers if the structure designed is working well or not.

 

While structure is such an interesting point of view based exercise at times, there isn’t any laundry list of dos and don’ts for an effective exercise; in my experience some of the following factors impact the same in one way or another:

 

-          Strategy (future scenario) and Process (operations management) are two key levers in any situation. However it’s very critical to understand the trigger for the exercise. Basis the strategy and trigger the relative focus on the two levers could change.

 

-          A very deep process view based exercise is usually triggered by productivity and efficiency enhancement kind of strategies, which is only one of the possible strategies. Basis whether the business strategy is of growth, returns, diversification, product focus, market focus, efficiency focus, productivity focus etc. the approach to the exercise could be drastically different. High level phases might read the same though to naked eye.

 

-          Broad dimensions of structure are Product, customer and geography/market. Even though these elements will remain in any structure, depending upon how the interplay of these dimensions plays out at various levels in the organization, number of structure options is almost endless.

 

-          Matrix structure is more articulation of reporting relationships and MIS and not so much of structure. This is more about how one wants the operations to flow in terms of people interactions and decisions.

 

-          MECE (Mutually Exclusive and Cumulatively Exhaustive) is a very simple but important concept that every structure options must qualify. This in itself can ensure better traction and growth compared to a rather convoluted structure.

 

-          In most cases distortion happens when you start to map people and make adjustments due to ‘sensitivities’… but that’s the reality of every organization.

 

-          Structure, MIS, Variable pay can impact behaviors and culture in a desired direction

 

 

~~Rohit~~

 

 

Recruitment to Exit – Mapping Life Cycle

I have grown up understanding a basic concept of input, processing and output. Any value chain, any process, any methodology has these three basic features. However interestingly no one looks at this complete cycle from an employee’s life cycle point of view. Everyone seems to be satisfied with specialization in one activity in the chain.

 

There are search firms which specialize in only hiring and selection, broader people consulting firms that specialize in aspects related to employee’s life within the organization, and almost no one except to some extent internal human resource departments looks at exit part. Weird how they are all working without acknowledgement and understanding of other parts of the chain.

 

Last evening I was talking to a friend who runs a search firm in North of India and we were debating on them creating services around exit analysis for clients. At a time where talent is scarce and hiring as well as exits are taking place in large numbers it would be hugely valuable for people to start connecting more parts to this chain then just activity specialization.

 

Else I guess we will continue to look towards each other for every objective not met not really knowing what went missing. What accountability can you really create for activity delivery? J

 

~~Rohit~~

 

Process Consulting – People, Process and Technology

 Process consulting is an interesting amalgamation of varied skill sets: strategy to process, people to technology. It is never about just one particular aspect, which is why you find human resource consulting firms, strategy firms, business process re-engineering firms and lots of technology and third party outsourcing firms doing this work.

 

Reasons for the above phenomenon is very simple: any process consulting work requires strategy knowledge to make fundamental business structure changes, process knowledge for cycle time changes, deep people knowledge since any change is finally going to filter down to someone’s role and contribution, technology change for any sort of automation or consolidated.

 

Like any other knowledge area, fundamentals of process consulting remain very simple, no matter in how complicated framework does one put it in. Let’s look at key dimensions of this work in a bit detail:

 

• Action Alternatives: Any analysis around any process would finally get down to one of the four alternatives:

-          Eliminate,

-          Optimize,

-          Outsource,

-          Captive Shared Service

 

• Improvements in Process: This finally has three simple objectives to it:

-          Time (Cycle Time)

-          Quality (Output)

-          Cost (Transaction Management)

 

• People Impact: This will get down changing the following:

-          Structure

-          Role

-          Bandwidth Utilization (better utilization of available time of people)

-          Resource Utilization (better skill set and experience match)

 

• Technology Impact:  Technology impact is around following dimensions usually:

-          Automation (Reducing manual intervention)

-          Consolidation (creating economies of scales and shared resources)

-          Outsourcing (this is the single biggest impact many a times)

-          ERP Implementation (for entire process being automated)

 

So now the big question is which expert or skill set is required in different organization situations. Assuming ofcourse neither teams/people would have deep expertise on all key dimension (Process, Technology, People), though they might have expertise of one and appreciation of others. Well I guess with experience you have to identify this aspect. There are situations where what matters most is effective implementation and end result of efficiency been visible in lives and daily activities of employees, in which case someone with deep people and process expertise may be required. In another situation we might be looking at huge volume of transactions and better management of operational processes, in which case technology intervention may be required.

 

Given in the current economy organizations are divided into either those gearing up for quantum growth and hence creating efficiencies for future, OR they are fighting dipping margins with increased competition and hence improving the historic situation, there is tremendous value add in process consulting work. Also given plethora of possible complexities and organization situations there is market for people/firms with varied skill sets to exist.

 

~~Rohit~~