Organizational Design for Strategic Success

VUCA

Organizational design is back. That’s what I wrote in an earlier blog. We are increasingly puzzled by the challenges that this VUCA-world puts upon the organisations that we are leading. In the past we had very clear principles of organizational design. We talked about span of control, reporting lines, division of labour, decision-making processes, …
And, we basically talked about two kinds of organisation: line-organisations and matrix organisations. Both of them are hierarchical but they vary on the principle of unit of command. In a matrix there are two (or more) sources of steering. In a line organisation there is only one.
Of course this is a simplification as there are many variations on a theme. Whatever the appropriateness of those organisational design models was then, they have become obsolete. We seem to have a problem because the ancient hierarchical organizations seem to be unable to cope with the speed of change, the complexity of the markets, the increased desire for autonomy, the ambiguous and uncertain environment. Indeed, hierarchical organizational design assumes stability and predictability. And if there’s something we do not have (anymore) it’s just that.
So, look around you. Many industries have been or will be disrupted by new entrants that simply do not care about the way things have always been done. Small pirate-like organisations destabilise the big enterprises. The latter lack versatility, agility, a capacity to reinvent business models. There is not one business model that is safe from disruption. And on top of all that the customer is better informed, better educated, more emancipated. So how on earth could anyone think that hierarchical designs will still be the main answer to these challenges? These new entrants do not worry about organizational design. They seem to change constantly. To established industries and companies they seem to be a virus that continuously evolves.

Yes, but

Many organisations look at the tidal wave coming towards them thinking that the robustness of their organisations, with the chain of command in place, will save them. Well, think again. Media, advertising, travel, music, services, … have been thoroughly disrupted by fairly new companies who do not have any legacy. They adapt according to the needs and they invent themselves as they go along. They have not been fossilised.
So we need to do something else knowing that

  • no organizational design solves a business problem in itself. At best an organizational design is a lever for the execution of strategy.
  • the success of an organisation depends on the behaviour of its “inhabitants”.
  • an organization should stimulate positive behaviours and dissuade people from behaving sub-optimally.
  • an organisation is as strong as the worst behaviour it tolerates. But that means that leadership is the true pulse of an organisation, not the structure.
  • organisational design is not about drawing boxes and lines. Organisational design should also focus on leadership, context, behaviour and creation of value.
  • experience, efficiency and effectives are cornerstones of any organisational design model.

Organizational Design as an Expression of Strategy and Culture

The key message is that there are many ways to look at organizational design. There is not one way. However, it is paramount that organizational design follows strategic choices. And something we should not neglect: organisational design should also an expression of culture, be it the current one, or the desired one.
There are not many answers in organizational design. There are mainly questions. In a next blogpost I will provide the questions to ask if you want to think about organizational design.
In a next blog I will discuss 6 possible ways to look at organizational design.

Politics or Polethics ?

nachtwacht

Are Politics negative?

Does an organization without political games or hidden agendas exist? If  I would ever see such an organization, I’d be very surprised. Political behavior is of all times and places. And it’s often seen as negative.
Why is that? The term refers to things we usually don’t like:

  • Manipulation, abuse of people or entire parts of an organization for the sake of one’s own interest.
    “(s)he simply use fear to manipulate, to have that position.
  • Putting the own interest before the company’s interest.
    “(s)he is only thinking about his/her own agenda”
  • Lack of transparency.
    “of course (s)he will say yes in your face, but behind your back…”
  • Lack of trust
    “Watch out for him/her: (s)he’s a very political player !”
  • Willingness to take “bad” decisions if they contribute to personal ambitions.

Politics - Machiavelli
Machiavelli wrote about Politics in “Il Principe”

This behavior reminds us about what Machiavelli described in his “Il Principe”. This kind of political behavior is the total opposite of  authentic, serving and vulnerable leadership. Is political behavior always negative ? Are the reasons to act politically always negative ? Are there other ways to be political?
I have met several leaders who were not “like that”. They did not fit the profile of the politician. But they were quite good in politics.
They shared with me an important reason why they were leader. Precisely because they had political skills.

Are Politics about skills ?

Is political behavior suddenly “promoted” from something evil into a skill ? Lominger defined political savvy in this way.
You have political savvy if (1) you can maneuver through complex political situations effectively and quietly, (2) you are sensitive to how people and organizations function, (3) you anticipate where the land mines are and plan your approach accordingly and (4) you view corporate politics as a necessary part of organizational life and work.
It is not just a skill. It is a necessary part of corporate life. It allows you to anticipate land mines and plan your approach accordingly. These two aspects drew my attention.

  • Corporate life

    Lominger talks about corporate life, not work. Life on the work floor and in the boardroom is about a lot more than performance, organization charts, KPI’s, logical decision-making. These things are visible. There are also invisible things like hidden ambitions, goodwill, emotions, conflicts. In order to live a happy, successful (corporate) life, you need to deal with both the invisible and visible aspects. You need skills that allow you to go beyond the visible. Political savvy is one of those.

  • Anticipate land mines

    Corporate savvy allows you to anticipate land mines, not set them up. You do not need to become a politician like Machiavelli described politicians. But there’s also no need to become a victim of land mines that have been set up by others. Is that it? Mastering corporate politics is necessary only to avoid becoming the victim of games other people play? And it’s about not setting up intrigues and land mines yourself ?

It took me several years of experience to find out myself what it’s all about. It’s not about finding out when you are (not) allowed to enter the political arena. It’s about finding out the most effective way of achieving your objectives.

The informal organization

The first blog I published on hrchitects.net was about the informal organization. I wrote about the way things get decided and done in an organization. It often differs a lot from how the formal organization works. Real power and real collaboration between colleagues make the difference. But they are often not visible in the formal organization. You need savvy to see them, to mobilize them, to make use (not abuse) of them. Name it informal savvy or political savvy. It’s not about the name. It’s about mastery of the skill.

Polethics

You may find this a play of words. I believe corporate politics can be very ethical. If they are, I call them polethics. You have a choice how you deal with difficult situations like how you achieve team and company targets (not your personal ones). You can choose what to do when personal ambitions, agendas, or emotions  get in the way. You can choose between complaining (becoming a victim of “their” politics) and the path of polethics:

  1. Choose to participate in the political arena, when it seems to be ‘the only way’.
  2. Define a strategy, partly formal, partly informal.
  3. Design various scenarios of how you can proceed. You can be sure things will go a different way,  but a man well prepared…
  4. Mobilize those parts of the (in)formal organization that are willing to help reaching the objectives.
  5. Reach for your objectives.
  6. Celebrate the victory (in ethical corporate politics).

This movie summarizes it:

HR strategy: Control + Alt + HR function ?

snale - HR Strategy

HR strategy, the discussion.

I’ve been in HR now for more than 15 years. In all these years the “strategic” role of HR has not been out of the debate.
Through the years I’ve noticed that this strategic role is complex and intangible. I will not try to define and describe the word strategic in this blog. You could check other literature for that. I am looking for what defines the strategic role. And I would like to answer the question how HR could become more strategic in the future.  I am aware it’s not perceived as strategic today.

The management team

There’s a perception that being a part of the management team is the most important indicator for the strategic nature of an HR manager. Only when you’re on the team, you are strategic.
But this is nothing more than a perception. I’ve known HR managers who are member of that team but who were not strategic at all and vice versa. So it’s not that. So it’s not team membership. Could the strategic role depend on the person?

The person

If an HR manager is not perceived as being strategic, surely it’s due to his or her own behaviour. There is one key question. Does the HR Manager have enough power to influence the strategic decision-making ?
Being able to influence is always an advantage. Sometimes it might be necessary. But it’s absurd to limit the strategic power of the HR function to the personal impact of the HR Manager.
So it’s not team membership or the HR Manager’s behaviour. What then is the determining factor for  HR to become strategic?

The functions and roles

Dave Ulrich has introduced one of the most influential models in HR. He clearly described 4 roles for HR. HR was to become next to the administrative expert also a champion for the employees, a change agent, and a strategic partner.

The 4 HR roles, inclusive the HR strategy role.
Dave Ulrich’s model of HR

This offered a framework that helped HR departments to develop into what they are  now. Various people fulfill the different roles within the department. Those people need to collaborate with one another and with the internal client.
The focus on the internal client cleared the way for the HR business partner. This is a generalist who functions as a single point of contact for the internal clients. This function also integrates a change driving and strategic dimension.
So here we were and are.
HR finally became a full function, covering the four roles. And the people in  HR departments started integrating the strategic dimension in their roles. The strategic HR role was born.
Was it ?
If all of this were true, why hasn’t the discussion about the strategic role of HR not stopped? Why have certain HR functions dramatically felt the crisis? Why have they been hit by serious cost cutting? Why was HR unable to turn the continuous “noise” about its HR strategy into satisfaction ?
Could it be that we have forgotten the people?

The people

Employees and their managers do not benefit a lot from the fact that the HR function is strategically positioned. That’s because there’s a long way between the definition of a strategy and the experience in the field.
Suppose your manager:

  • is a member of the management team.
  • supports and communicates the HR decisions to the own department.
  • is actively participating in the HR decision-making process.
  • has the active support of an HR business partner.

Then chances are that

  • the implementation of the HR strategy will go ahead smoothly
  • you will effectively feel “something” of what the HR strategy is all about.

But even then. Interpretations, convictions, emotions and misunderstandings about roles and responsibilities between the business and HR could spoil the party.
Should we conclude that an HR department can be as strategic as it wants, but that at the end of the day it’s the people who mess up ?
Absolutely not.
If people perceive the collaboration between HR and their department negatively, there is a problem. People do not experience the  HR strategy as intended. In that case HR has seriously messed up.
HR and the company face a huge challenge here. An HR strategy can only be successful if there’s a good collaboration between HR and the line managers. And I’d take it a step further. The line manager should become the real owner and executor of the HR strategy in his/her department. The HR business partner can give support and not drive the HR agenda. It’s about coaching business people towards HR (strategic) decisions. The HRBP should not take this decision him/herself.

The people processes

So the line manager is responsible for HR. And the HR business partner has a supporting and coaching role. We cannot expect our line manager to set up a “mini HR team”. That would not work. That would only lead to ineffective fragmentation of the HR function.
But line managers manage a lot of processes. So they can also manage HR-processes if they’re supported by experts and coaches. Some examples are:

  • Recruitment
  • Performance management
  • Outflow of weak performers
  • People Development
  • Team building

Let me introduce a new process the business could perfectly drive: the HR strategy process.

Control + Alt + HR function

HR Strategy is about the continuous improvement of people processes. It’s driven by the business. HR is no longer a function. It’s a process, driven by the business.
How do we have to understand these processes?
Some examples. Improvement of:

  • Hiring. How and where to attract our future talents ? Business people  know the market better than HR people.
  • Talent acquisition and development processes. Which competencies will we need within 5 to 10 years? Business people  know the future needs of the customers better than HR people.
  • Industrial relations. How can we convince the unions better than by telling them how the business is working ?
  • Internal communication. How can we integrate social media in the existing employee communication platforms?
  • Retention. How can we use the output of exit interviews more appropriately?
  • Team building and collaboration. How can we better deal with conflicts in our teams?
  • Leadership development. How will our own leadership have to evolve if we want to stay successful ?

Imagine managers becoming responsible for driving and managing these people processes. They are not only responsible for driving existing people processes but also for co-creating new ones. Of course, they are supported by colleagues and HR.
Screen Shot 2014-06-07 at 20.13.24
I think these managers will be much more willing and able to:

  • see the HR strategy as their HR strategy
  • make it much more concrete for their people.
  • transform employee’s negative perceptions about HR into transparent understanding of it.

That is the real meaning of strategic HR.
 
Read also: