Organizations are dynamic entities that need to embrace and adapt to changes in the environment such as market, competition and demographics continually in order to grow, consolidate, and even survive. This is done by scanning the environment, reviewing the current business strategy, identifying gaps and implementing new initiatives (strategy) to address them successfully. In the global economy, even local organizations conducting business in a single country are affected by the momentum of change which is fast with significant impact on the viability of the organization.
Look at what is happening to organizations like GE, JCPenny, Macy’s, Krispy Kreme to name a few, whose businesses are in a serious decline. There are also examples of organizations like Walmart, Target, BestBuy,etc., who are able to embrace change and have been able to sustain and grow their business.
In order to implement new strategy and create sustainable performance, it is imperative for organizations to make relevant changes to structure, processes, people, and rewards that support the new way of doing business. Many organizations use consulting firms like Mckinsey and BCG to retool their business strategy investing a lot of money but fail to follow-through on making the required changes to the structure and processes resulting failed or sub-par results.
Two critical levers to improve organizational effectiveness, as a consequence of changes to the business strategy, are organization redesignand talent assessment/development. While other elements such as process and rewards are critical, I am going to elaborate these two levers on how they need to be used.
The outcome of an organizational redesign is to simplify the existing structure, build capabilities, embed relevant culture, accelerate growth and develop a winning organization. This will invariably result in roles with new accountabilities and skills needed. With the assistance of a relevant talent mapping exercise, the organization will be able to understand the current talent, gaps, and the new skills required to propel the organization forward in implementing the new strategy.
While there are several approaches to redesigning and talent assessment/development, we are going to elaborate on a leading-edge methodology, “Congruency Model”, based on the work of Elliott Jaques, known as Requisite Organization. Two critical elements of the congruency model are, Organizational Architecture and Talent Mapping. Using the congruence model and making changes to the two elements is guaranteed produce sustainable performance, satisfied employees and an engaged workforce, based on our experience.
Organizational Architecture measures the vertical, lateral and horizontal role relationships. Vertical role relationships (Manager-Subordinate) begin with the governing body and flow down through the layers of an organization. Congruency model uses “Time-Span” to measure the complexity of roles in the realm of vertical relationships to determine the optimal number of levels that the organization requires, starting from the highest role, President or CEO. This measure also identifies the relevant information processing skills required to perform the role in a particular level.
Talent Mapping offers a methodology to assess how people are matched with their roles and provides a road map on the skills and capabilities required to successfully perform the role, in addition to the potential of the incumbents, currently in such roles. Four dimensions of the skills and capabilities are:
- Information Processing Capability (IPC)
- Skill, Education, Experience and Knowhow (SEEK)*
- Role Affinity
* Competencies are part of this
In our next blog, we will elaborate Organizational Architecture and Talent Mapping with examples from real life organizational transformational work performed by us.