Today’s UK economy has been sluggish for a long time now.  Consequently, most businesses would benefit from reviewing how they are organised to minimise the cost of labour and ensure a sharper focus on delivering strategic goals.  However, the challenge many leaders face, is how to drive down costs to survive whilst also preserving the ‘magic’ that makes their business flourish.

OE Cam recently hosted a lunch-debate for HR executives to explore this challenge and below is a summary of some of the key takeaways for smarter organisation reviews:

 

1. Look Up Before You Look Down

There is often too much emphasis on cost-cutting without first getting the shape and essence of the organisation right.  To create a blueprint that is aligned, accountable and agile, we encourage our clients to ‘look up’ before they look down into the detail:

  • Principles: We begin with a clear set of organisation design principles to ensure a strong foundation.
  • Value Chain: By examining the organisation through the eyes of your value chain, we identify critical touchpoints and areas for improvement.
  • Magic: It’s crucial to identify and protect what makes your organisation unique and special. This ‘magic’ is what sets you apart from competitors.
  • Primacy: We establish clarity on where the power currently lies within your organisation, and where it needs to be to optimise decision-making and efficiency.
  • Creating the space to build the New: We create the necessary space for building new strategies and initiatives that align with your organisation’s goals.

 

2. Establishing Effective Cross-Functional Alignment

Once you are clear about how to cluster your accountabilities, you then need to establish clear guidance and principles for how they interface with each other.  Strong decision-making is the cornerstone of high performing organisations and quite often, things fall down in the interface between functions.  Our approach brings accountability to life; ensuring that everyone understands who the critical consults are and where the real power lies.

 

3. Identifying Cost Savings

Cost efficiency is a critical aspect of any successful organisation.  We help rank-ordering your cost-saving options alongside risk analysis with a focus on:

  • Scale & Focus: Striking the right balance to ensure clear accountability for economies of scale through process improvements, without losing customer focus.
  • Optimum Spans & Layers: Determining the optimal structure to enhance productivity and reduce redundancies.
  • Combining Roles: Streamlining roles to improve efficiency and reduce overlap.
  • Stop/Reduce Activities: Identifying and eliminating non-essential activities to free up resources.
  • Outsourcing: Implementing outsourcing strategies while ensuring clear accountability and acting as an intelligent customer to maintain quality.

 

Embrace Change with a Robust Change Methodology

Organisation reviews need to be underpinned by a robust change methodology to effectively engage the senior team in evaluating the current state and developing options for the future.  Decisions need to be made at the highest level to guarantee alignment and commitment across the organisation.

Executive leadership fulfils a critical role in the change process. They should:

  • Think carefully before acting
  • Understand their role in the changes and take ownership
  • Champion the new structure and serve as role models
  • Manage expectations regarding timelines.

Careful consideration needs to be given to communication and controlling the narrative.  When requiring input from those who might be affected negatively by the change, it’s vital to treat everyone fairly, generously, and with respect and compassion.

 

Organisation Reviews – the ‘watch outs’: 

So what are some of the common pitfalls that can derail your progress?

  1. Cutting to hit a number with no eye on the future: Focusing solely spreadsheets of people and salaries without considering long-term implications can be detrimental.
  2. Overly focused on the future with no eye on the current: Ignoring present operational needs while planning for the future can lead to instability.
  3. Inadvertently killing your magic: Losing sight of what makes your organisation unique and valuable can undermine your competitive edge.
  4. Slow death by Salami Slicing: Gradually cutting resources hoping that reductions go un-noticed can erode organisational capabilities and morale over time.
  5. Drowning in Zero-Based Organisation Design: Overcomplicating the design process can result in inefficiency and confusion.
  6. Overly focused on organisation charts: Placing too much emphasis on structural diagrams can distract from practical operational improvements. Difficult to read across the organisation: Ensuring coherence and clear communication across different parts of the organisation is crucial.
  7. Seeing the organisation through the eyes of individuals: Avoiding a narrow perspective based on individual roles and instead focusing on the collective organisational goals.
  8. Poor communication: avoid sending mixed messages (e.g. cost-cutting while expanding the executive team) and over-consultation without clear direction, which leads to anxiety and frustration.

 

Our event also explored the importance of leadership assessment in the context of organisational reviews. As the new structure is unlikely to align perfectly with the current talent pool, there will be a need to ensure the new incumbents are qualified and motivated to fulfil their new roles:

Top Tips for Sharper Individual Assessments:
  1. For role selection – clearly define the outcomes and behaviours you want the role holder to deliver and assess against these.
  2. Self-awareness is often just as important as competency or behavioural profiles – understanding relative strengths & weakness and ways in which they can be utilised or compensated for is critical to success.
  3. If you want to see how someone performs in a role, let them demonstrate it.  Assessment centres that mirror key activities in the role give much better insights than interviews alone.
  4. Develop a journey & timelines to manage expectations – and stick to it. Unsuccessful candidates should at least find it difficult to criticise the process, even if they do not like the outcome.
  5. Fit people to roles, where possible – playing to strengths is a sure-fire way to unlock your organisations potential.
  6. Balanced assessment: Balance technical skills with leadership ability, motivation, emotional intelligence, and adaptability.  Identify key individuals – recognize those who generate energy and enthusiasm.
  7. Provide clear and honest feedback – there is nothing worse than finding out you have been unsuccessful in an assessment process and not knowing why.
  8. Decisive actions: Make tough decisions once to avoid prolonged issues.

 

Smarter Executive Assessments – the ‘watch outs’:

When conducting executive assessments, what are the common pitfalls to avoid?

  1. Be clear on the purpose – do not blur the lines between a process for selection and one for development for legal and ethical reasons
  2. Don’t limit yourself by having too rigid requirements against individual competencies. These are important but be sure to look for ways in which candidates compensate for their perceived shortfalls.  Ensure job specifications do not unduly limit the search for the right person.
  3. Beware of ‘clever’ or left-field interview questions.  Finding out what ‘sort of animal your candidate identifies with’ might be interesting but is unlikely to tell you anything about their suitability for the role.
  4. Never recruit someone in the hope they will be able to change or adapt if they have never previously shown an ability to do so. Past performance predicts future behaviour, so if success is dependent on the candidate behaving differently to the way they have previously, make sure you have a good reason for believing this is likely.
  5. Be careful about over specifying how you want the candidate to deliver, as there are diverse ways of succeeding in most roles.
  6. Unexpected reactions: Be prepared for unexpected reactions and behaviours during the process.
  7. Lasting impact: The handling of individual assessments has lasting implications for organisational culture.

 

Further Information

If you have any questions or would like to discuss any of the above in more detail, please contact Gary Ashton at gary.ashton@oecam.com.  We are offering HR teams a complimentary 1-hour workshop to discuss how organisation reviews could work in your organisation.

In the meantime, please download Gary & Lucy’s article “Don’t Lose the Magic” in The OE Journal.