[Text amended 01/09/2018]

Making Organisations Fit for Purpose

Organisational capability, agile organisations, responsive organisations are phrases we encounter in the search for an organisational structure that will prove fit for purpose.   The pace of technology and the growth of knowledge workers has cast doubt on whether the traditional hierarchical organisation structure is appropriate to harness the creativity, experience and goodwill that exists in many organisations.  Reducing layers within a company will help to save costs but will not provide a long term solution as other factors need to be addressed.

This is not a new problem but it is a growing issue.  There has always been a tension between ‘management’ roles and ‘expert’ roles.  To gain promotion, experts had to cross the functional ladders and become a manager to gain access to higher salaries and career opportunities.  Various solutions have been tried.  Technical and Engineering companies set up dual career structures – one for the technical/professional staff and one for managers.   That was partly driven also by the need to accommodate market rates without undermining corporate job evaluation systems.

Organisational Capability

Today the focus is on developing organisational capability to respond to the constant challenges and openings in:

• markets;
• technology;
• the economy;
• customer and staff aspirations.

This drives the need for innovation and addressing cost issues.  When examining what type of organisation structure will help, experience indicates the following key considerations.

• Different types of organisation may be required under the same company roof as the type of work and ownership of that work will differ between units.
• The extent to which employees accept ownership of the process(es) for which they are responsible and how involved they are in setting the outcomes.  Effectiveness will improve if staff are given freedom to make decisions, obtain expert advice and review processes to ensure outcomes are met and improved over time.
• The success of the above will depend on the extent to which the work group can influence what happens upstream and downstream to their area of work.

For example, can staff:

• Influence the quality of the work and/or materials that they receive?
• Revise specifications for the materials they use to achieve cost effective improvements?
• Regard themselves as accountable for the quality/price of work that they pass on?
• Meet with or hear the views of customers on a regular basis?
• Work within the essential parameters given for their work and are they free within those to shape the way in which the work is performed?

Are senior managers supportive in encouraging staff to explore new ways of working and accepting of the risk that they will not always be successful?   Feedback is well known as a factor in raising work satisfaction but we still fail to take this seriously.  It is not just how staff feel about work but the freedom they have to contribute to making a difference and being open with them.  Staff want to know how well or not the company is doing as well as the effectiveness of their own unit.

Freedom to Make Decisions

The above illustrates that it is not just an organisation structure that will make the difference but the degree to which staff have authority to make decisions within their expertise.   Professor T. T. Paterson developed a model for organisation analysis which was concerned particularly with the relationship between expert advisers and decision makers in organisations.   His organisation analysis tool was an enlightening way to analyse organisational issues when reviewing processes.  His work on this was overshadowed by his publications on the Decision Band Method of job evaluation which gained more prominence [1]

Some organisations have experimented with new forms of structure such as:

• self managing teams  – such changes require a high investment of management time to implement and nurture before the results are seen;
• mini profit centres – to encourage ownership for discrete parts of an organisation or services/products.

There is a risk that HR Managers will continue to resort to old initiatives such as talent management and succession planning without taking a fresh view of what is really needed. [2]

Your Context and Purpose

Flexibility of working time is believed to be a motivator but will not always be practicable for some organisations.  The nature of ‘organisations’ is very diverse and different solutions are required.  For example, many work forces work have to travel and meet schedules.  Affordability will also be an issue.   Market rates require some firms to pay higher rates of pay while others may simply not be able to afford those.

Even so, senior managers can still look at other ways to recognise staff and encourage new ways of working.  One such way is to encourage staff to become members of project teams as that can give the following benefits:

• increased understanding across an organisation;
• internal networking;
• skill development.  Membership of a project team can be seen as
• a tangible form of recognition for individuals as they are given such an opportunity.

It should be obvious that each organisation has to look to its own circumstances and solutions.  I trust that there is some encouragement above to what type of  steps you could take in your organisation.

Sources:
[1] TT Paterson Management Theory, Business Publications Limited 1966 plus other published and unpublished papers on organisational analysis.
[2] HR: getting smart about agile working, CIPD, November 2014

If you would like help on reviewing organisational structures, please feel free to contact the author via the website address below.

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© 2014 HR Management Dimensions
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