Organisation Design during a pandemic and beyond

Organisation Design during a pandemic and beyond

Organisation Design during a pandemic and beyond.

In an article written by Dr. Naomi Stanford, titled Organisation Design: pandemic Q&A, and pressing pause, she poses the following questions to the executive teams:

  1. Are executive teams prepared to challenge their assumptions on their strategy, business model, and operating model?
  2. Do executive teams keep a clear mind on what aspects of their business remain stable and what can be rapidly changed?
  3. Do organisations they lead have good data – both quantitative and qualitative – on which to make decisions?

The following adaptation from Burbidge provides a useful tool to use by organisations in response to challenges brought about by the pandemic:

 

Source: Organisation Design: pandemic Q&A, and pressing pause
Source: Organisation Design: pandemic Q&A, and pressing pause

Are they prepared to challenge their assumptions on their strategy, business model, and operating model?

It has become clearer that pre-pandemic strategies, business models and operating models require reviewing as they were adopted under a completely different environment. Most business leaders took bold decisions that sought to protect the health of employees whilst ensuring minimal business disruption. These decisions would give birth to a new reality in hybrid working policies.

Responding to the crisis also requires decisions that will ensure business resilience post the pandemic, how do organisations ensure this:

  • By shifting their business strategy, adjusting their business and operating models and continuously adjusting aspects of their organisation design, including systems, policies, and authorities.

Do they keep a clear mind on what aspects of their business remain stable and what can be rapidly changed?

It is imperative, in the presence of a strategy, that organisations do a thorough introspection on which elements of the business require adjusting, reviewing, or discontinuation. The diagram above provides a clearer context on how these can be approached. Continuing with what we know may not allow us to move in the right direction – the right response to the external threats and opportunities.

In the South African context, several organisations have started revisiting their operating models to respond to the question: has our operating environment changed? Is how we are organised still relevant? Do we need to adapt our operating model?

Organisations are also faced with a challenging task to ensure agility of their operating models, to withstand future disruptions. An agile Operating Model should be differentiated by a singular characteristic, data-driven and interconnected short planning cycles.

At 21st Century, we contend that organisations need an “Operating Model” that is “Agile” enough to pivot business operations at a speed that matches the “disruption”.

An Agile Operating Model is an Operating Model with business agility that provides the means for a business to pivot from disruption especially in times of economic crisis.

An Agile Operating Model recognises that there are parts of a business that have to be amended in times of a Black Swan event such as the COVID pandemic. This means having to quickly redesign and redeploy parts of the business to accommodate factors such as hybrid working models, homework assignments and project teams.

The mistake that is often made is that an Operating Model becomes completely agile, in that the whole model is considered to be of “moving parts”. An Agile Operating Model is in truth a combination of the traditional fixed Operating Model in which a business retains its essential operating foundations and business model, but which is adapted to make allowance for those elements which need to change.

The secret to a truly Agile Operating Model is finding the right balance between these two elements.

Because the Operating Model is comprised of all the business activities that make a business run, and keep it running, it is what will get your business through tough times as it gets disrupted both from our fast-changing digital economy, as technologies involving robotics and AI begin to replace what people do, and from an economic crisis caused by lockdowns from a health pandemic like COVID-19.

An agile OM is what gives a business its ‘speed to market’ and ‘speed of execution’, and enables the business to adapt quickly to different influences from the markets and its business ecosystem (PESTEL)

Do organisations they lead have good data – both quantitative and qualitative – on which to make decisions?

Increasingly business leaders rely on credible data to make strategic decisions. Organisation design practitioners are expected to possess a data-centric world view and a complex-world view in solving and providing advice on multi-layered business challenges.

In fact, data analysis is used by all executives to build predictive scenarios that support decision-making.  The CFO uses data to accurately predict cash flow under various scenarios.  The Marketing Director can accurately predict consumer needs based on data. The Head of Sales can accurately predict sales volumes.  The Supply Chain director can accurately predict stockholding.  All of these predictions and scenarios are used to make the best possible business decision.

Workforce data from multiple sources present phenomenal opportunities for Organisation Design practitioners to drive more data-centric decision making.  People data is prominent throughout HR functions and vibrancy of employee data can be found in recruitment software (CVs, assessments, interview notes), payroll (all biographic information plus service history such as leave taken and promotions received), performance management software, the timekeeping system, communication between employees (emails, instant messaging), learning and development data, exit interviews, as examples. No other department has so much human behavioural data available to them.

With so much data at their fingertips, if HR can use all this data properly, they would become the primary driver of organisational productivity and therefore profitability.  HR will become the most important partner for sustainable business growth.  Research by IBM and MIT showed that organisations that use advanced People Analytics for any HR decision have an 8% higher sales growth and 24% higher net operating income than companies that do not.  A Gartner study shows that People Analytics boosts organisational gross profit margins by 4%.

Conclusion

Dr Standford contends that:

Thinking the pandemic will ebb away, is probably a mistake, because it conjures up an image of a more stable and tranquil context than that we have been experiencing.  

The pandemic may continue and/or may be replaced or supplemented by different turbulences – we are already seeing rare metals shortages, supply chain vulnerabilities, geo-political tensions, bio-diversity loss. 

And we are simultaneously seeing massive strides in quantum computing, bio/health sciences, AI and robotics, etc.  Probably the biggest challenge for organisation designers/executive teams is to differentiate the signal from the noise, and to make sound judgements on which to respond to (and why).

It can be concluded that the world of work has been altered and a reset button is required to ensure survival/adapting to the new context. Many South African companies are implementing hybrid working policies, in which a 60/40 split has been the norm (60% of workforce based onsite and 40% working from home and/or remotely).

The next challenge will be to re-think how we hire, manage, and deploy the workforce, to ultimately have an impact on the bottom line…

Authors:

Morris Lamani, Executive Director and head of OD in 21st Century: Postgraduate Diploma in Management Studies

Jaen Beelders, Executive Director and head of Analytics in 21st Century: BCom Honours Industrial Psychology

About 21st Century:

21st Century, a level 2 BBBEE company, is one of the largest Remuneration and HR consultancies in Africa, with a team of more than 60 skilled specialists, servicing over 1700 clients – including non-profit organisations, unlisted companies, government, parastatals and over two-thirds of the companies listed on the JSE. 21st Century offers bespoke business and strategy planning services, operating model and organisational design, creative reward practice modelling, change, stakeholder and culture management, training courses and comprehensive human capital and talent plans. These are all underpinned by our analytic and survey capability tailored to the African environment. 21st Century continues to offer solutions via a combination of virtual channels and on-site presence.

21st Century has expanded its services to offer a full turnkey sustainable business and remuneration service. Beyond remuneration and reward consulting, 21st Century offers local analytics for business advantage; remuneration and HR training; change management services; talent and people solutions; and end-to-end organisational design and development.

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