Series: Six Fundamentals of Fast Growth (2)

Human resources lady in a meeting

Author: Dean Hunter

Published: 22nd September 2016

The Right ‘Operating Model’ The Science Bit

 

HR and people management is not rocket science. The science piece is around your organisational design. This fundamental is never going to win the ‘most exciting’ award, but it needs to be taken seriously.

With over 300 clients, we talk to business managers and leaders daily. When asked how much time they are spending on strategy and focusing on growth, the true answer is less than 10%. We will talk about roles and responsibilities in the next blog, but why are managers spending so little time growing their organisations?

Managers spend inordinate amounts of time caught up in ‘fixing issues’, typically the same issues time and time again.

Control ‘Freakers’ means that certain managers want to do the things they are comfortable doing and like to be involved in everything. That’s a coaching job – growth and control require very different skill sets.

We introduce the term ‘operating model’. How does the work flow through the organisation? How should the business be structured to make that flow work most effectively? What is the best model for the customer? Which model will make life easiest for the staff? How will the business functions work better together and how should communication flow through them? Who’s accountable for what? The list goes on.

Organisational Design is a skill set in its own right. Many HR people do not have this skills set and with exceptions (of course) the best we’ve found are the career OD professionals who come from a more management/lean/strategy/OE background. We work with these specialists daily, recognising a little amount of their valuable input can make a huge shift  in operational efficiency, which in turn makes the team more productive and ultimately increases profit.

So let’s talk about what happens in reality. The management team or board lock themselves away on an ‘offsite’ and draw up ‘the TO BE model’ that they think will work. Typically this is a matric structure regardless of sector, revenue or headcount size. Six months later they are generally forced into further change.

Why is that?

Companies build their organisational structure and ‘operating model’ based on how things work now. Without an independent perspective that is hard to move away from.

Leaders don’t want to disengage their senior management. Even if the COO makes a terrible job of looking after IT or HR, they feel that publicly removing this responsibility will just cause conflict.

Leaders build their organisation in an hour or less, with very little input from the key stakeholders, very little discussion and understanding of the current operational issues that need to be ‘engineered’ out of the business.

Personalities and relationships often determine outcomes rather than what is best for the business. We build the structure around who we have and not who we should have, which links to point 2. As we see with football teams; change is often required to gain the right team dynamic – the same people with the same styles and approaches will typically operate the same, regardless of what structure you put around them.

Managers don’t know what they are doing ‘OD’; it’s something that they have always done themselves so intend to continue doing so. Ultimately we all believe we are OD experts.

The fact is if we do not have the right skills at the table and the right model to operate from, growth will be painful. Customers will be dropped and staff and management will become disengaged, including the CEO.

Strategy and Organisational Design

For the few businesses that have a company strategy on paper, or at least in their minds, our most common finding when setting their ‘fast growth fundamentals’, is that there is often no link between ‘Strategy’ or ‘The Plan’ and ‘Organisational Design’. In effect the organisation is not designed to reflect or deliver what the company wants to do.

Typical examples:

‘By 2020, 50% of our trade will be to international markets’

Yet: No one around the table has worked abroad or been involved in international start up.

‘We want to be at the forefront of digital advertising’

Yet: Everyone around the table has an advertising background and no one has the ‘digital strategy’ experience.

There’s a protection within teams; ‘we are a strong team’, ‘we don’t want to grow or change that’, ‘we are in ‘control’ of it all’. Strategy requires change; and change to the organisational model or ‘operating model’ to support where you are heading is critical for success.

Get the fundamentals in place and head into advanced growth. Or plateau, fire fight and potentially go into decline. the choice is yours.

If you would like more information please drop us a line at: [email protected]

Dean Hunter is Founder of Hunter Adams, a UK leading HR Consultancy which grew 2000% in its first three years of trade and was recognised as ‘Best New Company’ in 2015 (Scottish Business Awards).