Rupert Morrison is the CEO of Concentra one of the fastest-growing analytics firms in the UK and the creators of acclaimed business transformation tool OrgVue. I asked Rupert about the evolution of organizational design and how data and analytics are changing the way companies are creating environments for performance to sustain a competitive edge.
What are the most salient reasons that the current methods of organizational design are falling behind the needs of the modern day organization?
Morrison: I believe there are 3 main reasons organizations currently struggle with Organization Design:
- Organization Design is too often a superficial exercise in moving boxes around sets of org charts. People focus far too much on the macro perspective rather than the detail of what work needs to get done and who should be doing that work.
- Organization Design is still regarded as a one-off activity. The modern day organization is under increasing pressure to adapt quickly to changing markets and disruptive organizational events such as mergers and restructures as well as changes in working habits with digitally engaged, mobile workforces. This means people need to shift their perspective from seeing OD as a one off activity to a continuous process required to hone and improve performance over time.
- In comparison to functions such as marketing and finance, HR and organization design teams have fallen behind on how they manage and use data to deliver required changes and ensure the organization is in the best position to deliver strategy.
When it comes to data analysis for organizational design, what is/are the most common error(s) or flaw(s) that you see most frequently?
- That people undergo an organizational redesign in the first place. You should only do a full redesign if you have an overwhelming case for change. Often you can get the changes you need through small focused improvements in what I call the micro design. For example process improvement or competency management. This avoids the disruption of wholesale change which can be hugely damaging for an organization.
- Practitioners are scared to use their data. Data quality is so often used an excuse not to do analysis. And yet you have to start somewhere. Once you start using the data it gets better all the time and the more you use it the better it gets. There are lots of tips and tricks along the way to improve data quality such as crowdsourcing correct data across the organization using surveys and visualizing data quality as a metric in itself to draw attention to gaps and where focus is needed.
People are using the wrong tools. Far too many HR and OD practitioners are stuck in an Excel and PowerPoint nightmare. No-one ever understood an organization through rows on an Excel spreadsheet or creating an org chart report in PowerPoint. New visualization and modelling tools are available on the market and can deliver a step-change in how people manage their organizations. These should be embraced.
Why must organizational design become a core competency as opposed to a one-off intervention?
Morrison: Organization Design is about ensuring strategy is effectively executed. The focus is on getting the right people, in the right place, doing the right things at the right time, and in the right numbers. In this light, the macro design remains relatively static, but what is constantly shifting and needs ongoing management and improvement is the detailed micro design.
People data is an untapped resource at present. It represents a huge opportunity for organizations. Many organizations struggle to know what their headcount is let alone where their people are, what they are doing, which activities are the most valuable. I could go on. Those organizations which embrace OD as a core competency will be able to shape the organizations to be in the best position to deliver their strategy. This creates a virtuous circle as you can more accurately place employees, set objectives and analyse performance to help them engage with their work and how they fit into the greater whole.
Why is it a mistake for organizations to base organizational design on financial data and the bottom line as opposed to people and process data?
Morrison: It is not a mistake to base organization design on financial data. The main point is that the connection is made between different organizational data. For example, finance data means nothing in the context of organization design if you don’t know which activities that money is going on and through which people. Equally, seeing a process map means little if you can’t see how much time people spend on those processes, and what the financial implication of that is. I believe strongly in the need to connect and link organizational data to understand the organizational system in its entirety. This is how comprehensive data-driven decisions can start to be made.
Why is accurate and ongoing workforce planning so critically important to organizational design success?
Morrison: Organization Design and workforce planning are closely related. Organization Design can be thought about as an as-is state against a to-be state in the future. An assessment of two points in time against each other. In contrast Workforce Planning is the ongoing process of delivering that design and therefore the organizational strategy.
Most organizations struggle to do this on a long term basis with a strategic view. The more focused you are on your to-be organization in the future the more accurately you can influence and create a workforce which will deliver your long term goals. This is why it is critical and a source of competitive advantage for organizations.
The HR Department in particular needs to become more data driven. What are some simple steps that HR pros can take today to gain the maximum impact from the data that it owns?
Morrison: Start with the questions you want to answer that will give value to the business. For example:
- Where are we losing top talent?
- Where are the low value processes we are spending too much time on?
- Which people are in critical position who we have to keep during this merger?
Using these questions will help focus on the data you need to collect and where that data sits within the organization.
Once you have collected that data visualize it. It will become more engaging and have a lot more impact among senior managers.
Moving along the analytics journey the next step is to begin modelling with that data to visualise and analyse scenarios and finally track change and the evolving organization on an ongoing basis to demonstrate the impact of changes being made.
This is the journey we should all be moving along. It is a key part of the skill set HR and OD practitioners will need to make a meaningful contribution to shaping and delivering business strategy.