10
Organization Design, Rewards
and HR Value Chain
The emergence of the millennials in the labour market, the diverse nature of global teams and the need to innovate and work intimately with customers and vendors are triggering a never seen before kind of flexibility among highly customer-centric organizations. Their operating model is based on a network of teams working in tandem with traditional structures, with people flipping from team to team rather than remaining in rigid, formal hierarchies.
Organization design demands holistic systems thinking. It involves reviewing a range of options, each one backed up by numbers and charts. Processes must be defined, accountabilities mapped, headcounts rightsized. You also need to under- stand the impact on employees and track the benefits. Doing this quickly and accurately has been difficult or impossible.
This is where People Analytics could be leveraged to:
• Challenge your existing organization design: explore working your way around rigid structures to form specific “mission-critical” teams focused on unique problems or tasks or projects around customers, markets, technology or products and services and then once the project is complete the teams disband with individual team members moving into either different teams for solving a different set of problems or slipping back into a more formally structured role
• Build real-time networks: such a configuration pulls information from multiple sources to provide integrated data on customers, products, people in real time, enabling decision-makers to take quick decisions to respond to marketplace challenges. In today’s ever-changing business environment, the need for agility supersedes all else
• Do more with same or less: the need is to optimize in today’s environment and do away with all bad costs. Design your organization in a manner that drives process efficiencies as opposed to accumulating headcount and flab. Service and support functions ideally that serve the front-end business side of organi- zations ideally should be converted into shared services. How can you leverage analytics to identify underutilized spans of control to highlight inefficiencies?
• Recast your Goals and link to Rewards: focus on the team as opposed to the individual; flexible work teams are going to rule the roost in organizations, so the need of the hour is to figure out ways to better manage and reward them.
Reward and recognize teams for project results, collaboration, supporting oth- ers; team innovation etc.; work out performance management processes around teams and stop giving importance to titles
• Team-based processes and tools: embed processes and tools that measure net- working, collaboration and supporting others across team-based environments as work is going to become less structured, more amorphous, and team-based organizations are more likely to win and deliver results. The competencies and skill sets that people would need to develop are a far cry from the old tradi- tional skill sets, and these new ways of working need to be adopted fast for companies to start winning in the marketplace
• Inverted Goal Setting: certainly, teams need to deliver results and would need to own that accountability—but, let them be self-managed; decide how to allo- cate and schedule their work among themselves and to communicate with each other; in a sense empower them to run on their own with minimum interference from the formal structure or hierarchy
• Articulate a shared purpose and vision and then communicate down the line:
leaders should be leaders and not do jobs that are several notches lower; they must be left to think strategy, innovation, customer and growth; the day-to-day operating results should be left to the teams.
Analytics Response
• Build and model organizational scenarios whatever method you want to use and whatever level of detail you want to go to. There are cloud-based technologies today that enables easier workflow and better results
• Build your baseline using data from existing HRMS and other multiple sources—more quickly and effectively than you thought possible
• Communicate your new design by clarifying and recording goals, objectives, processes, decisions, competencies and activities
• Define your new role tree and assign employees to it, so you can see the impact of your design at aggregate and individual level.
As a microcosm of the larger organization design changes taking place, the Human Resources organization itself is undergoing rapid transformation to meet the new challenges (Exhibit 10.1).
Exhibit 10.1 Evolving HR operating model
Human Resources will be reorganized into essentially three separate areas of focus:
• Business partnering
• Centres of expertise
• Shared services.
The transactional repetitive tasks would either be transitioned into a “self-service”
model (employee and manager) or outsourced completely.
The HRBP will now proactively contribute to business strategy and business performance using data-driven insights.
The centres of expertise will now leverage external leading practices to apply a consistent global approach to creating and implementing global programmes, policies and solutions.
Shared services solution delivery teams create and deliver consistent data- driven insights through analytics, solutions, training courses, programmes and core processes that are globally relevant and scalable.
A case example where a global services company sought to rationalize its central functions through modelling organization design scenarios basis span of control analysis in quick time to meet project time lines.
Case 1: Organization Redesign and Transformation for a Global Services Company
Situation and Context
• A global services company sought to rationalize its central functions, to deliver better services at 20% lower costs
• The project team led by Deepak needed to transform its organizational structure and to map costs into roles
• The traditional solutions: Excel, Visio and Power Point were too cumbersome for the fast-moving project.
Analytics Solution
• Converted existing spreadsheets into new organization diagrams within a day
• Helped the client model and share the financial and resource impact of each scenario, allowing fact-based decisions on new structures.
Key Outcomes
• Decisions on change made in 2 weeks, where the project had previously been stuck for two months “in Excel hell”
• Span of control issues identified and corrected
• Decisions communicated simply by managers to their teams
• Cost savings targets achieved (Exhibits 10.2, 10.3 and 10.4).
Under- stretched?
Sweet spot
Twilight Zone
Over- stretched?
Copyright: Acumetric Global Solutions Pvt Ltd – all rights reserved
Exhibit 10.2 Analytics helped identify large (and small) spans of control
Exhibit 10.3 Other views were used to explore the data—e.g. identify current fragmentation of reporting lines
Copyright: Acumetric Global Solutions Pvt Ltd – all rights reserved Exhibit 10.4 Spans of control were resized across departments and teams
What-if Scenarios were then developed
• What-if scenarios depicted reflecting change in headcount, structure and costs
• What-if scenarios using FTE’s in roles, not named individuals
• Blue chart is current organization and orange chart is a what-if chart reflecting the changes projected post the planned restructure (Exhibit 10.5).
Copyright: Acumetric Global Solutions Pvt Ltd – all rights reserved Cost Optimization: INR ….million Headcount Optimization: …. FTE Exhibit 10.5 a Current organization. b Post-restructure—what-if projection