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DESIGNING
GROWTH-ORIENTED ORGANIZATIONS June 2010 The following morning I sauntered into his office for a tete-e-tete over a cup of coffee. What he told me excited me no end. He exclaimed, “We have done so much work together as colleagues in several companies and put organizations and people together to jell so very well. But, I find that even by putting a bunch of extraordinary people together today, I am simply unable to achieve the outcome desired. Like in the past, we put these guys into brainstorming sessions. We also created a Special Task Force and got HR to pitch in. Whilst they are working earnestly, somehow I am unable to feel the confidence that we are on the right track. Need your help! I want this business to double in the next 3 years.” I heard him out patiently and told him that whilst this would be extremely challenging, would it be prudent to set such a target? He was adamant. He gushed that, as a business person he was fully confident that this target was not only achievable but within a reasonable timeframe could also be easily surpassed. These potentialities were based on the premises that: 1. None of the people in business
actually had an idea of the real size of the market. I came back to my office with mixed feelings, bewildered, confused, doubtful, nonetheless reasonably happy and energized. My biggest concern was to ensure that I did not let him down. I had no experience of running a business, yet here was someone, that too, a dear friend pushing and forcefully persuading me to give him the correct response. I thought hard and made a list of
the things I should do : The penny dropped when suddenly it occurred to me that the reason I was doing the above was because somewhere in my subconscious, I wanted to understand what kind of capabilities were required to achieve this ambitious goal. From that point onwards, my mind constantly revolved only, on wanting to know what capabilities would be required by an organization to achieve the desired outcome. Then, it would be a matter of enumerating those capabilities and identifying organizational interventions and initiatives to build on them. This would fuel the growth agenda. On my walk that evening, I was wondering as to how I could go about it, when I recalled Amy Kates and Jay Galbriath from my TISS days and their treatise regarding Designing Your Organization. I recalled their axiom that anything that is internal or intrinsic to an organization is a source of competitive advantage. Furthermore, all these can be put into 3 buckets – First – Technology - by which I meant not mechanical or engineering, but the method of doing work, Second, Processes and Systems which guide the sequence of working events through the organization and third, human ability. And this is what capability is all about. From the following day I started my rounds of meeting business heads and meeting their direct reports as well as the CFO and the CHRO. In the first round of meetings, I got to know from each one of them about the economic environment in which they operate, underlying factors in the environment which impact the demand for their goods and services, who their customers are and who their consumers are and why do they buy from the Company, what are the kinds of segments of population and industry that a specific business serves, what is that business’s strategy to make the business grow, how does one organize oneself and last but not least, what are the sources of competitive advantage that would be needed to succeed in achieving a target of double the turnover from the present, within the next three years, or by the end of the third financial year. The one important aspect that hit me after a series of interactions with all of them was the simple fact of this Company simply having no synergy, within itself. Each department was outstanding in technology, product, and average on delivery and customer satisfaction. There was very little, meaningful horizontal communication and almost negligible evidence of resource sharing and of course, a lot of one-upmanship. This made me believe that this was more a problem of people, structures, processes and systems than the business itself. I quickly understood why my dear friend had called upon me, consciousness dawning, that it was not only a People’s people problem, but it had something deeper in terms of nuances and culture. Having recognized this, I once again met my friend and gave him a detailed account of my observations. I mentioned to him that I would be playing the role of a facilitator and not a consultant. The work would be done by a team cutting across businesses, levels, and functions and would mandatorily have business heads as part of this team. My idea was to break down barriers of horizontal communication as well as one-upmanship. I also told the CEO that he should assign a task force bonus of one million US dollars which would be shared between the 8 or 9 members through a process of consensus and where no two individuals would be eligible to get the same quantum of incentive. The CEO called for a meeting of the task force and put forward a one line brief “I want you to sit together and recommend to me the design for our organization to enable our Company to double its net revenue in the next 3 years.” I then went about the task I had laid out for the company and myself, and went from one milestone to the next, covering four of them in all. At the end of the first one i.e. three months from day zero, when the team would present the report on the new organization design, 0.1 million dollars were earmarked for the same. Milestone 2, 3 and 4 were to be at the end of Financial years 2, 3 and 4 and each milestone would carry 0.30 million USD pool money. At the end of milestone 4, inside of 30 days, based on the outcome, the total pool money would be available to the team for distribution as mentioned earlier. I promised to review the strategic direction and their performance as a group each quarter. With that, the meeting concluded, the CEO moved out, and my role as a facilitator got crystallized. ' With this backdrop, the group started to work.
All the above combined and led to a comprehensive recommendation on Structure, Work Flows / Information Flows, Reward – Recognition and Talent harnessing. For each, the group identified 2 -3 metrics to measure the shift from day one. It was a monumental piece of work. Lastly, the task force identified the Metrics to measure the effectiveness of the proposed organization. The task force used real life experiences extensively. They also utilized available market and industry insights, customer behavior and data collected by me during the diagnostics the sum total of which went into creating the final output. The group also identified new competencies for inclusion in the Leadership Competency Framework viz. Innovation Management, Integrity and Trust, Organizational Agility, Collaborative Working, Peer Relationships, Understanding Others and Overdependence on a single skill. Similarly, some of the Professional Skill areas were redefined to meet the revised combination of skill sets necessary. The entire presentation, lasting five hours, was made to the CEO. The CEO wanted absolute clarity on each individual-led group’s responsibilities and how he would know whether it indeed so happened. To me, it looked more like an exercise on linking the 8 individuals together in a tight crystal star jigsaw puzzle. Having successfully completed the presentation, the CEO announced an additional 0.1 million USD to the task force’s pool kitty. Epilogue: Post-meeting with the CEO, the group disseminated the plan through a Large Scale Interactive Process involving all employees at a location. This led to clarity on the new structure, matrix relationships, revised set of accountabilities and performance measures, with each LSIP lasting 2 days. For this purpose, the entire agenda was broken up into several teams, which represented a particular Theme towards the achievement of the larger goal. Further, the enabling functions like Finance, HR, IT, Technology and Quality were spread out in the Theme teams. A considerable amount of work was done prior to the LSIP and captured as part of Format 1, which was titled broad action plan and is at Annexure 1. During the LSIP, the Theme teams culled out a detailed work-plan, which is at Annexure 2. The role of the enabling functions in each of Theme teams was listed out in Format 3, which is at Annexure 3. And to conclude, each Theme consolidated the targets and milestones to be achieved during the period 2011 – 2014 in Format 4, which is at Annexure 4. In conclusion of the LSIP, the Theme leaders presented Format 4 to the group whilst the enabling function leaders presented Format 3 clearly iterating the support that they will provide to each of the Theme teams. One of the spin off benefits derived was that these milestones became a part of the Performance Plans of the participants, which were accorded equal weightage across team members so as to drive suitable behaviours towards achievement of the targets. The Leadership team ensured strict adherence to laid-out plans and in a case or two, where fine-tuning was required, the task force would quickly meet in a focused manner over a conference call or VC enabling everyone to be on the same wavelength. Quarterly business reviews were conducted by the Task Force of 8, irrespective of which business vertical was making the presentation. LSIP is a Large Scale Interactive Process in which all concerned people get under the same roof, are subjected to same communication, have the same level of opportunity to contribute and the Leadership Team decisions get to be known across the participants in real time at the conclusion of the LSIP. The power of this process was fully exploited in development of the execution plans by the various teams in respect of their individual projects for achievement of the larger goal. End of year one – saw the Company achieve 36.5% growth in net revenue, 25% growth in PBDIT. It’s now year two. My friend again called me – this time for a drink to a local club. Obviously pleased with the results of our earlier tete-a-tete, he exclaimed, “Now you understand the power of HR”. Most companies have requisite skills and competencies to deliver superior performances. Again, in most companies, more often than not, organizations are not designed on sound empirical data and tend to be so structured as to meet personalities’ expectations and are not talent based. Here is an example of creating self-empowered groups of people cutting across business lines to hold accountability for growth and setting an example of how HR moves to become the epicenter of a successful Company’s functioning. Bibliography:
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