Transformation
with purpose
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Businesses are facing increasing complexities and pressures on a daily basis.
Multiple factors - from geopolitics to the climate crisis, accelerating technologies, shifting fiscal priorities and, of course, the global pandemic, mean that organisations are finding themselves in the greatest period of uncertainty
in living memory.
The business landscape
is being disrupted
Several trends have been catalysed by the Covid crisis, and this storm of technological, geopolitical, social and economic change shows no sign of abating. Indeed, we can be confident that the storm will continue to rage. While some trends will quietly evolve, others will take us by surprise, potentially becoming the next “black swan” event to be faced this decade.
Alongside these external pressures, for many businesses, further organisational disruption is driven from within. It might be triggered by M&A activity, new market entry, scaling-up, down-sizing or pivoting strategy.
Whatever the source of the disruption, in the business battle-of-the-fittest, those that re-plan and reorganise to best navigate the change will survive, and thrive. For many, disruption brings immense opportunity, and reorganisation in response to change can be used as a strategic tool for success. Brands such as Apple, Amazon and Glossier that have innovated in response to a changing world have achieved phenomenal success. Conversely, those that have failed to respond have often done so at their peril, a fact well illustrated by the Standard & Poor Index over the past 55 years. In 1965, corporations in the Index stayed there for an average of 33 years; by 2016, this had reduced to 24 years; and by 2027, this is predicted to fall to just 12 years. It is clear that the need to remain relevant and reorganise for success has never been greater. Furthermore, how organisations handle and manage organisational change will be critical to their future success.
From climate change to Covid, technological acceleration, geopolitical issues and shifting fiscal priorities, businesses are facing a number of pressures
Trends such as digital transformation have been accelerated by Covid
Businesses are often stuck in never ending
cycles and reorganisation loops
Data-led reorganisation
and the what if mindset
Organisational change -
what are the challenges?
At its most simplistic level, organisational change might be described as shaping an organisation’s capability (skills) and capacity (resources) in response to strategic objectives – but, in reality, it is so much more. It involves an increasing number of complexities and challenges that need to be overcome and decisions that need to be made - often at speed. Getting business transformation right has never mattered more. As Shawn Zimmerman, VP HR Pharmaceutical at Cardinal Health explains, “an organization’s ability to exhibit agility in terms of pivoting, reallocating resources and understanding the investment vs. cost equation is critical to playing and winning in today’s market.” However, in an environment that is becoming unequivocally more complex, leaders are facing increasing amounts of uncertainty on how to tackle this.
However, organisational change is commonly associated with high costs, extended time-frames, painful processes and high stress levels for all involved. Furthermore, for many businesses, change projects can feel like a never-ending cycle. But what are the factors that drive these challenges and where should we be looking to reduce the pain points?
According to management professor Jay Galbraith, organisations were once relatively structurally simple and stable. But this has changed, and dynamic markets and changing business environments mean that organisations are having to become increasingly multifaceted. As organisations grow and hire more employees, they become even more complex and opaque – and herein lies a challenge. Executives can lose sight of parts of the business and some areas can become siloed, costs can increase, a lack of clarity around purpose develops, and increased friction can calcify the organisation. With reduced visibility of what is actually happening, workforce reorganisation becomes doubly hard.
While organisations are facing rapid advances in technology and fast-moving consumer trends, the tools which leaders have at their disposal and the models within which their decisions are built on are from another era, and not fit for purpose.
As a result, many organisations simply put off the necessary changes – stacking up further issues for the future. According to John Boudreau, Professor of Management and Organisation at the Marshall School of Business, University of Southern California, “Ninety per cent of leaders in the middle are likely to resist change, not because they’re resistant people, but because they just don’t have the tools.”
In a more problematic scenario, organisations will embark on a re-organisation but, thanks to inadequate tools, will achieve outcomes that are sub-optimal and require further change. According to Rupert Morrison, the CEO and founder of orgvue, rather than address the strategic ambitions of the organisation, these tools support an exercise in moving around static blocks of data on org charts. This over simplified yet time-consuming approach is unlikely to optimise business structure, processes or outcomes.
At a time when businesses are facing complex challenges and fast-shifting marketplaces, many have looked to undertaking routine digital transformation projects in order to adapt. These projects become cycles: management consultants are hired to analyse the strengths and weaknesses of an organisation and design a robust framework for a future-state. But, by the time the plan is implemented two or three years later, the business needs further reorganisation and the consultants are invited back. This costly process leaves some large organisations in an exhausting ongoing state of constant, large-scale re-invention and change.
Classic organisational design models, such as Jay Galbraith’s Star Model and the McKinsey 7S Framework, connect the components of an organisation, offering a theoretical model that will shape decision-making and behaviours within a business. However, these models are more theoretical rather than practical, and the systems that make up the organisation are instead often represented in static and unrepresentative rigid lines of an organisational chart that is not fit for purpose in a modern, agile business.
For most companies, the org chart is a critical tool in determining how a business operates and, as a result, it is often used as the foundation of planning for a future-state. But, an over-reliance on traditional or hierarchical reporting lines can mean elevated risk and missed opportunities. This approach loses sight of the latent potential within the workforce – and the value they can create when their potential is understood and harnessed. It also overlooks the skills and work processes that form organisational capability and drive value for the business.
With a lack of access to the right data, leaders are relying on instincts to make the right decisions and this can slow them down. A recent survey by orgvue found that 67 per cent of UK-based business decision makers hesitated to make a workforce decision in the last year, with a further 74 per cent saying they regretted making a business decision too slowly.
Having started his career in management consultancy, Morrison is familiar with the challenges associated with using insufficient or inadequate data to drive business change objectives. Data held by HR teams tends to be structured for operational purposes – processes such as hiring people, moving people between roles, training and payroll. It’s not structured for management insight or for making decisions about the strategic aims of the organisation. It’s not just the data that’s a problem. Those that have access to robust data sets can often lack the analytical skills and processes to turn that data into meaningful insights. As Zimmerman puts it, “leveraging data to understand what roles drive the most ROI and where and how to differentially invest in your organization has never mattered more.”
Talent becomes ineffective if there is a lack of clarity on the work that needs to be done, if it is unclear how they fit within the organisation or if objectives and outcomes to be achieved are not aligned. Organisations can also fall into the trap of thinking that having the best talent will allow them to realise their strategic objectives. Of course, this can only help, but having the best people is not enough – it’s how they are aligned that matters. As Morrison points out: “If the best people are not aligned, that’s even more dysfunction. Having really smart, motivated people pulling in different directions is just even more chaos.” Having the right people in the right roles, doing the right things, is a key driver of business performance. In Morrison’s experience, the challenge here is that “many organisations don’t really understand their people – and they certainly don’t understand the work that people do.”
“Ninety per cent of leaders in the middle are likely to resist change, not because they’re resistant people, but because they just don’t have the tools.”
John Boudreau
Professor of Management and Organisation at the Marshall School of Business, University of Southern California
Fresh approaches to driving better business performance
It is clear that while organisational change can deliver vastly improved business outcomes, it is expensive, disruptive and many companies struggle to get it right. But does it have to be this way? And are there different approaches that can lead to better organisational outcomes? The answer to these questions is almost certainly yes. Through a blend of new tools and shifting mindsets, organisations can approach re-design in a way that lowers costs, saves time, reduces unintended churn and vastly improves outcomes by ensuring that strategic objectives can be met.
Perhaps the real mindset shift that is needed is one moving away from a boom or bust mentality with significant restructures every few years, to one that is continuous. According to Ken Ferguson, the Chief Revenue Officer of orgvue, “Organisations with over 50,000 employees are always in a state of transformation”. As such, the three year re-planning cycle, which delivers massive change every few years is unlikely to be the best approach. Businesses should aim to break this “reorganisation cycle” but, if they are to do so, new approaches and more dynamic tools will be needed.
With a majority of the workforce now online and an estimated 2.5 quintillion bytes of data created every day, organisations have a
huge amount of information at their fingertips – they just need to
make sense of it.
HR departments, for example, possess valuable data that is rarely used to its full potential and organisations should ask more from this people data, beyond typical HR operations.
Bringing together finance and workforce data into overall business planning can deliver significant benefits. Insights such as workforce costs, profitability and time reports, through to employee engagement, competencies and their individual impact on the performance of the company as a whole can offer transparency on what is actually being done within the organisation and by whom. This data-led approach can help organisations better tackle strategic challenges around where to invest in building capability or allocating resources, all the while managing costs, that drive the business to achieving its goals. Zimmerman is clear on the benefits of doing so, “this data-driven approach allows us to objectively see the facts and determine if we have the right investment in our most important growth drivers.”
Smarter use of data and analytics enables accountability for what needs to be done to drive successful change. It also allows organisations to constantly design, plan, track and adjust as the business, its customer or market dictates. According to Cassie Kozyrkov, Chief Decision Analyst at Google, “Smart companies will invest in analytics today to get ahead of whatever is coming tomorrow.”
Organisations must be willing to change. Customer needs alter, market opportunities arise, business conditions change – and organisations must be ready to respond. The ability to adapt is an important and necessary quality, and the most successful organisations are dynamic entities that can transform through business cycles. “For me, the theme is fluidity,” says Boudreau. “I think of it as deconstructing work and then reinventing it. For instance, automation will mean that we still need people and you reconstruct around that – but then you hit organisational issues and need to reinvent again. Leaders need to be able to accept and embrace that fluidity.”
”The HR function has to transform, to take on this responsibility of Organisational Planning and Analysis.”
Rupert Morrison
CEO and founder of orgvue
Organisations should ask themselves if HR is positioned to make the impact it should be making across the enterprise. Morrison believes that HR teams should have a similar approach to that of Finance. Part of the role of finance departments is Financial Planning & Analysis (FP&A): forward-looking work in budgeting and planning, and undertaking analysis of the value levers within the organisation in order to help the leadership team make decisions about where to move resources and where to invest. Morrison calls this approach Organisational Planning & Analysis (OP&A) – he estimates that, in most organisations, HR teams spend between zero and two per cent of their time doing this.
“The HR function has to transform, to take on this responsibility,” Morrison says, “HR leaders often focus on operations – from talent acquisition to onboarding. And that’s important – it’s like credit control being important to finance teams. But it’s not really the value driver. And, that’s why I believe that each organisation should have an OP&A in the same way that they have FP&A – to drive value.”
With the pace, breadth and depth of disruption increasing, organisations have never needed to be more ready to adapt to whatever comes next.
A “what was”/ “what now” approach will only prepare organisations for more of the same, leaving them vulnerable to the next crisis. As futurist Ben Hammersley points out, in the wake of the Covid crisis, there is a growing sense that firms will come out of this period “better prepared for all the previous crises they’ve seen, and radically under-prepared for the next one that comes down the track”.
Adopting a “what if” mindset can be a game-changer for organisations and is essential in driving future resilience and longer-term performance success. A “what if” mindset would see organisations use their data to model potential scenarios and support informed and future-ready decisions. For the vast majority of organisations, the data needed to adopt a “what if” mindset is readily available; it just needs to be identified in a way that reveals what an organisation’s workforce actually does, how they do it, and how that fits with executing business strategy.
It is easy to talk about the theory of improving processes, but, as we have seen, without the right data, analytics and tools in place, implementing better ways of working is, at best, challenging. If organisations are to truly find different, better and more successful approaches to re-planning and reorganisation, then they need to look at a different set of tools – ones that will better equip them for success.
The future of business performance?
After several years as a management consultant, Morrison developed an understanding of the challenges and the untapped opportunities in business re-planning, reorganisation and performance. “I had a whole series of instances where I was frustrated with the delivery of what I was doing,” Morrison says. “Everything was crunched in Excel and Microsoft Access and visualised in PowerPoint. It was extremely time consuming.”
He did a piece of work for one client that involved calculating the profitability of 30,000 products across 8,500 customers in 16 countries. The CEO was pleased with the insights, but he also had a question: “What am I going to do in six months – where’s the business model for that?”
The encounter left Morrison with a realisation. “I thought if I could leverage technology and codify with really good methodology – and make it repeatable – that would be extremely valuable,” he says. “I learned that there was better technology out there than the technology we were using – it was more scalable and repeatable and had better visualisation.”
So he set out to create a tool that was as disruptive as the trends impacting businesses – one that would tackle the challenges head-on and deliver a step-change in business performance.
Morrison and his team set out to create a product that took a different approach to organisational design. They decided to build a software platform that gave organisations the ability to merge data from a range of sources, connect different dimensions together, visually enable dynamic modelling of organisational design and enable continuous planning of and for the workforce. By integrating their organisational data into orgvue, senior leaders could finally see what their businesses look like, allowing them the ability to model future scenarios, connect people and their competencies to roles, activities and business objectives, and make data-driven decisions in real-time.
A core feature of the platform is its ability to look beyond the “what was” and “what now”, and model the “what if” – any number of future scenarios for organisational design and workforce planning. That platform allows the user to ask questions that will enable them to design, plan and make decisions about the future, enabling them to execute and get to where they need to be as quickly as possible. The kind of decisions you can make are: who should be accountable for what work? Who should get which role? Who should be a successor? What competencies should a role require and who has those? What are the gaps? Zimmerman, a repeat customer of orgvue, believes that “there are few solutions available that can provide this strategic modeling and scenario building in a fast and insightful way. To be able to project and model out a 36 month workforce plan with the capabilities identified in your strategy is a competitive advantage.”
While organisations often think about restructuring during a seismic event, such as merger and acquisition or driving efficiencies, it’s also a key strategic tool when businesses are optimising for growth through expansion and investment. “An organisation might model where the highest return would be in different scenarios,” Ferguson says . “What we enable is speed – orgvue can do in days and weeks what takes months and quarters using static tools.”
Ferguson describes orgvue as “seeing through data”. “It’s not just tabular data, it’s visualisation,” he says. “It’s hard to see trends and patterns in spreadsheets. Having a platform that visualises the organisational data within the business means that organisations can be more proactive in spotting opportunities and thinking creatively. It is also critical in enabling businesses to conceptualise organisational planning.”
For instance, a company might be able to identify that its CEO has too many direct reports or too many responsibilities. “You can see that in a visualisation in a way you may not see it in data,” Ferguson says. “I can look and see that there’s too much consolidated decision making happening with one individual, and there’s not enough decision making happening in other parts of the business because of this span of control. Visualisation spurs creativity which is sometimes lost in business decision making.”
By working with orgvue, clients such as Johnson & Johnson, Dow Chemical, and Chevron gain the ability to take a bird’s eye view of their organization by transforming complex data sets that are hard to parse numerically and reinterpreting them into visualizations via a user-friendly dashboard that immediately allows users to understand—and reevaluate—their workforces in real time.
Until recently, one UK retailer with more than 350,000 employees ran an annual exercise: a workforce audit. Every year the work took several weeks because it was necessary to bring together 16,000 macro-enabled Excel spreadsheets.
Tools such as Excel and PowerPoint work with what are fundamentally static data sets. Managers might be able to identify a reporting line structure, but it’s not possible to gain insights into operating models and business goals. This type of static data offers a limited view of how the business is performing and very little information about the other layers of data that might identify the activities necessary to deliver business strategy.
By making data available in real time, this issue is solved by orgvue. Ferguson believes that orgvue enables clients to be in a state of “continual planning,” which will allow them to pivot the organisation and drive investment in places that will enable the business to grow. The idea is that the platform will change the way that organisations approach performance and planning: “That used to be a yearly cycle – now they can do it quarterly, monthly or even weekly in order to move faster.” Being able to identify issues early in the business cycle rather than wait until a quarterly or annual report means that action can be taken early and boom and bust cycles are negated. This is far less disruptive for a business than identifying underperformance later in a fiscal year and reorganising the business.
Morrison has discovered that the proportion of time employees spend doing the tasks they should be performing is often low, which is a significant driver of organisational underperformance. “There’s a whole range of economic benefits from understanding the work. Too often senior roles spend too much time on transactional tasks that can be performed by juniors at less cost or outsourced entirely. These inefficiencies can be corrected as long as they’re identified.”
By quantifying what work people were actually doing, orgvue revealed to one consumer goods client that, of the 300 people they had in central HR, 150 of them had been involved in writing the HR strategy and yet no documentation of the strategy existed. Another organisation discovered that there were a lot of people in the organisation who believed they were responsible for setting pricing strategy, but no one felt responsible for communicating with the customer. Unsurprisingly, field research demonstrated that customers were confused about pricing. Zimmerman’s experiences back this up, “being able to assess and diagnose your organization to ensure you have the right talent doing the right work at the right time for the right value is the holy grail of strategic workforce planning.”
“We are making decisions about people that have real consequences, and so I think there’s not just a business imperative, there’s a moral imperative for organisations to do this work properly.”
The human aspect of transformation
Organisations face increasing amounts of complexity and need to be able to predict unforeseen circumstances in order to adapt in an appropriate way to fast-changing market conditions. Effective solutions, tools, models and mindsets need to be put in place to enable organisations to become more resilient, increase productivity and realise change strategy.
Making these types of changes involves brave leadership, fresh mindsets and new approaches. With improved tools – and better use of data – there are different, more successful and less painful ways of approaching business reorganisation. These see companies readjusting for success rather than having cycles of mass reorganisation. And they can drive performance, build ongoing resilience and avoid painful waves of job losses every few years as organisations reset to fix issues.
Modelling can reveal opportunities, inefficiencies or lack of skills in key areas, but making change can often involve making tough decisions. “Fundamentally, we’re dealing with decisions about people, and people have families, they have lives,” Morrison says. “There are huge mental health issues in the world. We are making decisions about people that have real consequences, and so I think there’s not just a business imperative, there’s a moral imperative for organisations to do this work properly.”
“
Decision making is left unsupported due to lack of data
”Leveraging data to understand what roles drive the most ROI and where and how to differentially invest in your organisation has never mattered more.”
Shawn Zimmerman
VP HR Pharmaceutical at Cardinal Health
The human aspect of transformation
Discover more at orgvue.com
Discover more at consulting.wired.co.uk
“
Fluidity is a constant cycle of deconstruction
and reinvention of work
Organisations have a huge amount of different types of data at their fingertips
Rupert Morrison
CEO and founder of orgvue
‘Messy’ data can be turned into something scalable, repeatable and visual
There are many factors at play when making a business fit for purpose
Ken Ferguson
Chief Revenue Officer of orgvue
”Visualisation spurs creativity which is
sometimes lost in business decision making.”
Download a PDF version of this report
Businesses are facing increasing complexities and pressures on a daily basis.
Multiple factors – from geopolitical to the climate crisis, accelerating technologies, shifting fiscal priorities and, of course, the global pandemic, mean that organisations are finding themselves in the greatest period of uncertainty in living memory.
Visualisations transform complex data sets and allow organisations to better understand and re-evaluate their business in real-time
Visualisations transform complex data sets and allow organisations to better understand and re-evaluate their business in real-time
There are many factors at play when making a business fit for purpose
Engineering
Ceo
Engineering
HR
Finance
HR
Finance
Marketing
Marketing
Sales
Sales
For larger businesses in particular, scale adds complexity
Businesses get stuck in reorganisation loops
Organisations lack the tools needed to support successful reorganisation
Theoretical structures and processes misrepresent reality
There is insufficient data or analytics to support decision making
A confused workforce can’t see how they align with strategic objectives, or with each other
Having a fluid mindset
Taking a dynamic approach
Improving and utilising your data
Reframing the role of HR to better leverage your people
Being ready for further disruption
Considering new tools to unlock potential and drive performance
The orgvue difference
Fast and future ready analytics, modelling and decision making
Painting pictures with data for visual story-telling
Say goodbye to static data and boom-or-bust “reorganisation cycles”
Have the right people working on the right things
For larger businesses in particular,
scale adds complexity
According to management professor Jay Galbraith, organisations were once relatively structurally simple and stable. But this has changed, and dynamic markets and changing business environments mean that organisations are having to become increasingly multifaceted. As organisations grow and hire more employees, they become even more complex and opaque – and herein lies a challenge. Executives can lose sight of parts of the business and some areas can become siloed, costs can increase, a lack of clarity around purpose develops, and increased friction can calcify the organisation. With reduced visibility of what is actually happening, workforce reorganisation becomes doubly hard.
For larger businesses in particular,
scale adds complexity
Organisations lack the tools needed to support successful reorganisation
While organisations are facing rapid advances in technology and fast-moving consumer trends, the tools which leaders have at their disposal and the models within which their decisions are built on
are from another era, and not fit for purpose.
As a result, many organisations simply put off the necessary changes – stacking up further issues for the future. According to John Boudreau, Professor of Management and Organisation at the Marshall School of Business, University of Southern California, “Ninety per cent of leaders in the middle are likely to resist change, not because they’re resistant people, but because they just don’t have the tools.”
In a more problematic scenario, organisations
will embark on a re-organisation but, thanks to inadequate tools, will achieve outcomes that are sub-optimal and require further change. According to Rupert Morrison, the CEO and founder of orgvue, rather than address the strategic ambitions of the organisation, these tools support an exercise in moving around static blocks of data on org charts. This over simplified yet time-consuming approach is unlikely to optimise business structure, processes or outcomes.
Theoretical structures and processes
misrepresent reality
Classic organisational design models, such as Jay Galbraith’s Star Model and the McKinsey 7S Framework, connect the components of an organisation, offering a theoretical model that will shape decision-making and behaviours within a business. However, these models are more theoretical rather than practical, and the systems that make up the organisation are instead often represented in static and unrepresentative rigid lines of an organisational chart that is not fit for purpose in a modern, agile business.
For most companies, the org chart is a critical tool in determining how a business operates and, as a result, it is often used as the foundation of planning for a future-state. But, an over-reliance on traditional or hierarchical reporting lines can mean elevated risk and missed opportunities. This approach loses sight of the latent potential within the workforce – and the value they can create when their potential is understood and harnessed. It also overlooks the skills and work processes that form organisational capability and drive value for the business.
There is insufficient data or analytics to support decision making
With a lack of access to the right data, leaders are relying on instincts to make the right decisions and this can slow them down. A recent survey by orgvue found that 67 per cent of UK-based business decision makers hesitated to make a workforce decision in the last year, with a further 74 per cent saying they regretted making a business decision too slowly.
Having started his career in management consultancy, Morrison is familiar with the challenges associated with using insufficient or inadequate data to drive business change objectives. Data held by HR teams tends to be structured for operational purposes – processes such as hiring people, moving people between roles, training and payroll. It’s not structured for management insight or for making decisions about the strategic aims of the organisation. It’s not just the data that’s a problem. Those that have access to robust data sets can often lack the analytical skills and processes to turn that data into meaningful insights. As Zimmerman puts it, “leveraging data to understand what roles drive the most ROI and where and how to differentially invest in your organization has never mattered more.”
There is insufficient data or analytics to support decision making
A confused workforce can’t see how they align with strategic objectives, or with each other
Having a fluid mindset
Improving and utilising your data
With a majority of the workforce now online and an estimated 2.5 quintillion bytes of data created every day, organisations have a huge amount of information at their fingertips – they just need to make sense of it.
HR departments, for example, possess valuable data that is rarely used to its full potential and organisations should ask more from this people data, beyond typical HR operations.
Bringing together finance and workforce data into overall business planning can deliver significant benefits. Insights such as workforce costs, profitability and time reports, through to employee engagement, competencies and their individual impact on the performance of the company as a whole can offer transparency on what is actually being done within the organisation and by whom. This data-led approach can help organisations better tackle strategic challenges around where to invest in building capability or allocating resources, all the while managing costs, that drive the business to achieving its goals. Zimmerman is clear on the benefits of doing so, ”this data-driven approach allows us to objectively see the facts and determine if we have the right investment in our most important growth drivers.”
Smarter use of data and analytics enables accountability for what needs to be done to drive successful change. It also allows organisations to constantly design, plan, track and adjust as the business, its customer or market dictates. According to Cassie Kozyrkov, Chief Decision Analyst at Google, “Smart companies will invest
in analytics today to get ahead of whatever
is coming tomorrow.”
Reframing the role of HR to better
leverage your people
Organisations should ask themselves if HR is positioned to make the impact it should be making across the enterprise. Morrison believes that HR teams should have a similar approach to that of Finance. Part of the role of finance departments is Financial Planning & Analysis (FP&A): forward-looking work in budgeting and planning, and undertaking analysis of the value levers within the organisation in order to help the leadership team make decisions about where to move resources and where to invest. Morrison calls this approach Organisational Planning & Analysis (OP&A) – he estimates that, in most organisations, HR teams spend between zero and two per cent of their
time doing this.“
The HR function has to transform, to take on this responsibility,” Morrison says, “HR leaders often focus on operations – from talent acquisition to onboarding. And that’s important – it’s like credit control being important to finance teams. But it’s not really the value driver. And, that’s why I believe that each organisation should have an OP&A in the same way that they have FP&A – to drive value.”
Being ready for further disruption
With the pace, breadth and depth of disruption increasing, organisations have never needed to be more ready to adapt to whatever comes next.
A “what was”/ “what now” approach will only prepare organisations for more of the same, leaving them vulnerable to the next crisis. As futurist Ben Hammersley points out, in the wake of the Covid crisis, there is a growing sense that firms will come out of this period “better prepared for all the previous crises they’ve seen, and radically under-prepared for the next one that comes
down the track”.
Adopting a “what if” mindset can be a game-changer for organisations and is essential in driving future resilience and longer-term performance success. A “what if” mindset would see organisations use their data to model potential scenarios and support informed and future-ready decisions. For the vast majority of organisations, the data needed to adopt a “what if” mindset is readily available; it just needs to be identified in a way that reveals what an organisation’s workforce actually does, how they do it, and how that fits with executing business strategy.
Considering new tools to unlock potential
and drive performance
It is easy to talk about the theory of improving processes, but, as we have seen, without the right data, analytics and tools in place, implementing better ways of working is, at best, challenging. If organisations are to truly find different, better and more successful approaches to re-planning and reorganisation, then they need to look at a different set of tools – ones that will better equip them for success.
The orgvue difference
Fast and future ready analytics, modelling and
decision making
A core feature of the platform is its ability to look beyond the “what was” and “what now”, and model the “what if” – any number of future scenarios for organisational design and workforce planning. That platform allows the user to ask questions that will enable them to design, plan and make decisions about the future, enabling them to execute and get to where they need to be as quickly as possible. The kind of decisions you can make are: who should be accountable for what work? Who should get which role? Who should be a successor? What competencies should a role require and who has those? What are the gaps? Zimmerman, a repeat customer of orgvue, believes that “there are few solutions available that can provide this strategic modeling and scenario building in a fast and insightful way. To be able to project and model out a 36 month workforce plan with the capabilities identified in your strategy is a competitive advantage.”
While organisations often think about restructuring during a seismic event, such as merger and acquisition or driving efficiencies, it’s also a key strategic tool when businesses are optimising for growth through expansion and investment. “An organisation might model where the highest return would be in different scenarios,” Ferguson says . “What we enable is speed – orgvue can do in days and weeks what takes months and quarters using static tools.”
Painting pictures with data for visual story-telling
Say goodbye to static data and boom-or-bust “reorganisation cycles”
Until recently, one UK retailer with more than 350,000 employees ran an annual exercise: a workforce audit. Every year the work took several weeks because it was necessary to bring together 16,000 macro-enabled Excel spreadsheets.
Tools such as Excel and PowerPoint work with what are fundamentally static data sets. Managers might be able to identify a reporting line structure, but it’s not possible to gain insights into operating models and business goals. This type of static data offers a limited view of how the business is performing and very little information about the other layers of data that might identify the activities necessary to deliver business strategy.
orgvue solves this by making data available in real time. Ferguson believes that orgvue enables clients to be in a state of “continual planning” which will allow them to pivot the organisation and drive investment in places that will enable the business to grow. The idea is that the platform will change the way that organisations approach performance and planning: “That used to be a yearly cycle – now they can do it quarterly, monthly or even weekly in order to move faster.” Being able to identify issues early in the business cycle rather than wait until a quarterly or annual report means that action can be taken early and boom and bust cycles are negated. This is far less disruptive for a business than identifying underperformance later in a fiscal year and reorganising the business.
Have the right people working on the right things
Download a PDF version of this report
From climate change to Covid, technological acceleration, geopolitical issues and shifting fiscal priorities, businesses are facing a number of pressures
According to management professor Jay Galbraith, organisations were once relatively structurally simple and stable. But this has changed, and dynamic markets and changing business environments mean that organisations are having to become increasingly multifaceted. As organisations grow and hire more employees, they become even more complex and opaque – and herein lies a challenge. Executives can lose sight of parts of the business and some areas can become siloed, costs can increase, a lack of clarity around purpose develops, and increased friction can calcify the organisation. With reduced visibility of what is actually happening, workforce reorganisation becomes doubly hard.
At a time when businesses are facing complex challenges and fast-shifting marketplaces, many have looked to undertaking routine digital transformation projects in order to adapt. These projects become cycles: management consultants are hired to analyse the strengths and weaknesses of an organisation and design a robust framework for a future-state. But, by the time the plan is implemented two or three years later, the business needs further reorganisation and the consultants are invited back. This costly process leaves some large organisations in an exhausting ongoing state of constant, large-scale re-invention and change.
While organisations are facing rapid advances in technology and fast-moving consumer trends, the tools which leaders have at their disposal and the models within which their decisions are built on are from another era, and not fit for purpose.
As a result, many organisations simply put off the necessary changes – stacking up further issues for the future. According to John Boudreau, Professor of Management and Organisation at the Marshall School of Business, University of Southern California, “Ninety per cent of leaders in the middle are likely to resist change, not because they’re resistant people, but because they just don’t have the tools.”
In a more problematic scenario, organisations will embark on a re-organisation but, thanks to inadequate tools, will achieve outcomes that are sub-optimal and require further change. According to Rupert Morrison, the CEO and founder of orgvue, rather than address the strategic ambitions of the organisation, these tools support an exercise in moving around static blocks of data on org charts. This over simplified yet time-consuming approach is unlikely to optimise business structure, processes or outcomes.
Classic organisational design models, such as Jay Galbraith’s Star Model and the McKinsey 7S Framework, connect the components of an organisation, offering a theoretical model that will shape decision-making and behaviours within a business. However, these models are more theoretical rather than practical, and the systems that make up the organisation are instead often represented in static and unrepresentative rigid lines of an organisational chart that is not fit for purpose in a modern, agile business.
For most companies, the org chart is a critical tool in determining how a business operates and, as a result, it is often used as the foundation of planning for a future-state. But, an over-reliance on traditional or hierarchical reporting lines can mean elevated risk and missed opportunities. This approach loses sight of the latent potential within the workforce – and the value they can create when their potential is understood and harnessed. It also overlooks the skills and work processes that form organisational capability and drive value for the business.
With a lack of access to the right data, leaders are relying on instincts to make the right decisions and this can slow them down. A recent survey by orgvue found that 67 per cent of UK-based business decision makers hesitated to make a workforce decision in the last year, with a further 74 per cent saying they regretted making a business decision too slowly.
Having started his career in management consultancy, Morrison is familiar with the challenges associated with using insufficient or inadequate data to drive business change objectives. Data held by HR teams tends to be structured for operational purposes – processes such as hiring people, moving people between roles, training and payroll. It’s not structured for management insight or for making decisions about the strategic aims of the organisation. It’s not just the data that’s a problem. Those that have access to robust data sets can often lack the analytical skills and processes to turn that data into meaningful insights. As Zimmerman puts it, “leveraging data to understand what roles drive the most ROI and where and how to differentially invest in your organization has never mattered more.”
Talent becomes ineffective if there is a lack of clarity on the work that needs to be done, if it is unclear how they fit within the organisation or if objectives and outcomes to be achieved are not aligned. Organisations can also fall into the trap of thinking that having the best talent will allow them to realise their strategic objectives. Of course, this can only help, but having the best people is not enough – it’s how they are aligned that matters. As Morrison points out: “If the best people are not aligned, that’s even more dysfunction. Having really smart, motivated people pulling in different directions is just even more chaos.” Having the right people in the right roles, doing the right things, is a key driver of business performance. In Morrison’s experience, the challenge here is that “many organisations don’t really understand their people – and they certainly don’t understand the work that people do.”
Organisational change -
what are the challenges?
Several trends have been catalysed by the Covid crisis, and this storm of technological, geopolitical, social and economic change shows no sign of abating. Indeed, we can be confident that the storm will continue to rage. While some trends will quietly evolve, others will take us by surprise, potentially becoming the next “black swan” event to be faced this decade.
Alongside these external pressures, for many businesses, further organisational disruption is driven from within. It might be triggered by M&A activity, new market entry, scaling-up, down-sizing or pivoting strategy.
Whatever the source of the disruption, in the business battle-of-the-fittest, those that re-plan and reorganise to best navigate the change will survive, and thrive. For many, disruption brings immense opportunity, and reorganisation in response to change can be used as a strategic tool for success. Brands such as Apple, Amazon and Glossier that have innovated in response to a changing world have achieved phenomenal success. Conversely, those that have failed to respond have often done so at their peril, a fact well illustrated by the Standard & Poor Index over the past 55 years. In 1965, corporations in the Index stayed there for an average of 33 years; by 2016, this had reduced to 24 years; and by 2027, this is predicted to fall to just 12 years. It is clear that the need to remain relevant and reorganise for success has never been greater. Furthermore, how organisations handle and manage organisational change will be critical to their future success.
At its most simplistic level, organisational change might be described as shaping an organisation’s capability (skills) and capacity (resources) in response to strategic objectives – but, in reality, it is so much more. It involves an increasing number of complexities and challenges that need to be overcome and decisions that need to be made - often at speed. Getting business transformation right has never mattered more. As Shawn Zimmerman, VP HR Pharmaceutical at Cardinal Health explains, “an organization’s ability to exhibit agility in terms of pivoting, reallocating resources and understanding the investment vs. cost equation is critical to playing and winning in today’s market.” However, in an environment that is becoming unequivocally more complex, leaders are facing increasing amounts of uncertainty on how to tackle this.
However, organisational change is commonly associated with high costs, extended time-frames, painful processes and high stress levels for all involved. Furthermore, for many businesses, change projects can feel like a never-ending cycle. But what are the factors that drive these challenges and where should we be looking to reduce the pain points?
The business landscape
is being disrupted
Businesses are often stuck in never ending
cycles and reorganisation loops
Trends such as digital transformation have been accelerated by Covid
Decision making is left unsupported due to lack of data
“Ninety per cent of leaders in the middle are likely to resist change, not because they’re resistant people, but because they just don’t have the tools.”
John Boudreau
Professor of Management and Organisation at the Marshall School of Business, University of Southern California
”Leveraging data to understand what roles drive the most ROI and where and how to differentially invest in your organisation has never mattered more.”
Shawn Zimmerman
VP HR Pharmaceutical at Cardinal Health
Fluidity is a constant cycle of deconstruction
and reinvention of work
Organisations have a huge amount of different types of data at their fingertips
It is clear that while organisational change can deliver vastly improved business outcomes, it is expensive, disruptive and many companies struggle to get it right. But does it have to be this way? And are there different approaches that can lead to better organisational outcomes? The answer to these questions is almost certainly yes. Through a blend of new tools and shifting mindsets, organisations can approach re-design in a way that lowers costs, saves time, reduces unintended churn and vastly improves outcomes by ensuring that strategic objectives can be met.
Perhaps the real mindset shift that is needed is one moving away from a boom or bust mentality with significant restructures every few years, to one that is continuous. According to Ken Ferguson, the Chief Revenue Officer of orgvue, “Organisations with over 50,000 employees are always in a state of transformation”. As such, the three year re-planning cycle, which delivers massive change every few years is unlikely to be the best approach. Businesses should aim to break this “reorganisation cycle” but, if they are to do so, new approaches and more dynamic tools will be needed.
Organisations must be willing to change. Customer needs alter, market opportunities arise, business conditions change – and organisations must be ready to respond. The ability to adapt is an important and necessary quality, and the most successful organisations are dynamic entities that can transform through business cycles. “For me, the theme is fluidity,” says Boudreau. “I think of it as deconstructing work and then reinventing it. For instance, automation will mean that we still need people and you reconstruct around that – but then you hit organisational issues and need to reinvent again. Leaders need to be able to accept and embrace that fluidity.”
With a majority of the workforce now online and an estimated 2.5 quintillion bytes of data created every day, organisations have a
huge amount of information at their fingertips – they just need to
make sense of it.
HR departments, for example, possess valuable data that is rarely used to its full potential and organisations should ask more from this people data, beyond typical HR operations.
Bringing together finance and workforce data into overall business planning can deliver significant benefits. Insights such as workforce costs, profitability and time reports, through to employee engagement, competencies and their individual impact on the performance of the company as a whole can offer transparency on what is actually being done within the organisation and by whom. This data-led approach can help organisations better tackle strategic challenges around where to invest in building capability or allocating resources, all the while managing costs, that drive the business to achieving its goals. Zimmerman is clear on the benefits of doing so, “this data-driven approach allows us to objectively see the facts and determine if we have the right investment in our most important growth drivers.”
Smarter use of data and analytics enables accountability for what needs to be done to drive successful change. It also allows organisations to constantly design, plan, track and adjust as the business, its customer or market dictates. According to Cassie Kozyrkov, Chief Decision Analyst at Google, “Smart companies will invest in analytics today to get ahead of whatever is coming tomorrow.”
”The HR function has to transform, to take on this responsibility of Organisational Planning and Analysis.”
Rupert Morrison
CEO and founder of orgvue
Rupert Morrison
CEO and founder of orgvue
Organisations should ask themselves if HR is positioned to make the impact it should be making across the enterprise. Morrison believes that HR teams should have a similar approach to that of Finance. Part of the role of finance departments is Financial Planning & Analysis (FP&A): forward-looking work in budgeting and planning, and undertaking analysis of the value levers within the organisation in order to help the leadership team make decisions about where to move resources and where to invest. Morrison calls this approach Organisational Planning & Analysis (OP&A) – he estimates that, in most organisations, HR teams spend between zero and two per cent of their time doing this.
“The HR function has to transform, to take on this responsibility,” Morrison says, “HR leaders often focus on operations – from talent acquisition to onboarding. And that’s important – it’s like credit control being important to finance teams. But it’s not really the value driver. And, that’s why I believe that each organisation should have an OP&A in the same way that they have FP&A – to drive value.”
With the pace, breadth and depth of disruption increasing, organisations have never needed to be more ready to adapt to whatever comes next.
A “what was”/ “what now” approach will only prepare organisations for more of the same, leaving them vulnerable to the next crisis. As futurist Ben Hammersley points out, in the wake of the Covid crisis, there is a growing sense that firms will come out of this period “better prepared for all the previous crises they’ve seen, and radically under-prepared for the next one that comes down the track”.
Adopting a “what if” mindset can be a game-changer for organisations and is essential in driving future resilience and longer-term performance success. A “what if” mindset would see organisations use their data to model potential scenarios and support informed and future-ready decisions. For the vast majority of organisations, the data needed to adopt a “what if” mindset is readily available; it just needs to be identified in a way that reveals what an organisation’s workforce actually does, how they do it, and how that fits with executing business strategy.
It is easy to talk about the theory of improving processes, but, as we have seen, without the right data, analytics and tools in place, implementing better ways of working is, at best, challenging. If organisations are to truly find different, better and more successful approaches to re-planning and reorganisation, then they need to look at a different set of tools – ones that will better equip them for success.
Fresh approaches to driving better business performance
The future of business performance?
After several years as a management consultant, Morrison developed an understanding of the challenges and the untapped opportunities in business re-planning, reorganisation and performance. “I had a whole series of instances where I was frustrated with the delivery of what I was doing,” Morrison says. “Everything was crunched in Excel and Microsoft Access and visualised in PowerPoint. It was extremely time consuming.”
He did a piece of work for one client that involved calculating the profitability of 30,000 products across 8,500 customers in 16 countries. The CEO was pleased with the insights, but he also had a question: “What am I going to do in six months – where’s the business model for that?”
The encounter left Morrison with a realisation. “I thought if I could leverage technology and codify with really good methodology – and make it repeatable – that would be extremely valuable,” he says. “I learned that there was better technology out there than the technology we were using – it was more scalable and repeatable and had better visualisation.”
So he set out to create a tool that was as disruptive as the trends impacting businesses – one that would tackle the challenges head-on and deliver a step-change in business performance.
Morrison and his team set out to create a product that took a different approach to organisational design. They decided to build a software platform that gave organisations the ability to merge data from a range of sources, connect different dimensions together, visually enable dynamic modelling of organisational design and enable continuous planning of and for the workforce. By integrating their organisational data into orgvue, senior leaders could finally see what their businesses look like, allowing them the ability to model future scenarios, connect people and their competencies to roles, activities and business objectives, and make data-driven decisions in real-time.
A core feature of the platform is its ability to look beyond the “what was” and “what now”, and model the “what if” – any number of future scenarios for organisational design and workforce planning. That platform allows the user to ask questions that will enable them to design, plan and make decisions about the future, enabling them to execute and get to where they need to be as quickly as possible. The kind of decisions you can make are: who should be accountable for what work? Who should get which role? Who should be a successor? What competencies should a role require and who has those? What are the gaps? Zimmerman, a repeat customer of orgvue, believes that “there are few solutions available that can provide this strategic modeling and scenario building in a fast and insightful way. To be able to project and model out a 36 month workforce plan with the capabilities identified in your strategy is a competitive advantage.”
While organisations often think about restructuring during a seismic event, such as merger and acquisition or driving efficiencies, it’s also a key strategic tool when businesses are optimising for growth through expansion and investment. “An organisation might model where the highest return would be in different scenarios,” Ferguson says . “What we enable is speed – orgvue can do in days and weeks what takes months and quarters using static tools.”
Ferguson describes orgvue as “seeing through data”. “It’s not just tabular data, it’s visualisation,” he says. “It’s hard to see trends and patterns in spreadsheets. Having a platform that visualises the organisational data within the business means that organisations can be more proactive in spotting opportunities and thinking creatively. It is also critical in enabling businesses to conceptualise organisational planning.”
For instance, a company might be able to identify that its CEO has too many direct reports or too many responsibilities. “You can see that in a visualisation in a way you may not see it in data,” Ferguson says. “I can look and see that there’s too much consolidated decision making happening with one individual, and there’s not enough decision making happening in other parts of the business because of this span of control. Visualisation spurs creativity which is sometimes lost in business decision making.”
By working with orgvue, clients such as Johnson & Johnson, Dow Chemical, and Chevron gain the ability to take a bird’s eye view of their organization by transforming complex data sets that are hard to parse numerically and reinterpreting them into visualizations via a user-friendly dashboard that immediately allows users to understand—and reevaluate—their workforces in real time.
Until recently, one UK retailer with more than 350,000 employees ran an annual exercise: a workforce audit. Every year the work took several weeks because it was necessary to bring together 16,000 macro-enabled Excel spreadsheets.
Tools such as Excel and PowerPoint work with what are fundamentally static data sets. Managers might be able to identify a reporting line structure, but it’s not possible to gain insights into operating models and business goals. This type of static data offers a limited view of how the business is performing and very little information about the other layers of data that might identify the activities necessary to deliver business strategy.
By making data available in real time, this issue is solved by orgvue. Ferguson believes that orgvue enables clients to be in a state of “continual planning,” which will allow them to pivot the organisation and drive investment in places that will enable the business to grow. The idea is that the platform will change the way that organisations approach performance and planning: “That used to be a yearly cycle – now they can do it quarterly, monthly or even weekly in order to move faster.” Being able to identify issues early in the business cycle rather than wait until a quarterly or annual report means that action can be taken early and boom and bust cycles are negated. This is far less disruptive for a business than identifying underperformance later in a fiscal year and reorganising the business.
Morrison has discovered that the proportion of time employees spend doing the tasks they should be performing is often low, which is a significant driver of organisational underperformance. “There’s a whole range of economic benefits from understanding the work. Too often senior roles spend too much time on transactional tasks that can be performed by juniors at less cost or outsourced entirely. These inefficiencies can be corrected as long as they’re identified.”
By quantifying what work people were actually doing, orgvue revealed to one consumer goods client that, of the 300 people they had in central HR, 150 of them had been involved in writing the HR strategy and yet no documentation of the strategy existed. Another organisation discovered that there were a lot of people in the organisation who believed they were responsible for setting pricing strategy, but no one felt responsible for communicating with the customer. Unsurprisingly, field research demonstrated that customers were confused about pricing. Zimmerman’s experiences back this up, “being able to assess and diagnose your organization to ensure you have the right talent doing the right work at the right time for the right value is the holy grail of strategic workforce planning.”
‘Messy’ data can be turned into something scalable, repeatable and visual
There are many factors at play when making a business fit for purpose
The human aspect of transformation
Organisations face increasing amounts of complexity and need to be able to predict unforeseen circumstances in order to adapt in an appropriate way to fast-changing market conditions. Effective solutions, tools, models and mindsets need to be put in place to enable organisations to become more resilient, increase productivity and realise change strategy.
Making these types of changes involves brave leadership, fresh mindsets and new approaches. With improved tools – and better use of data – there are different, more successful and less painful ways of approaching business reorganisation. These see companies readjusting for success rather than having cycles of mass reorganisation. And they can drive performance, build ongoing resilience and avoid painful waves of job losses every few years as organisations reset to fix issues.
Modelling can reveal opportunities, inefficiencies or lack of skills in key areas, but making change can often involve making tough decisions. “Fundamentally, we’re dealing with decisions about people, and people have families, they have lives,” Morrison says. “There are huge mental health issues in the world. We are making decisions about people that have real consequences, and so I think there’s not just a business imperative, there’s a moral imperative for organisations to do this work properly.”
“We are making decisions about people that have real consequences, and so I think there’s not just a business imperative, there’s a moral imperative for organisations to do this work properly.”
Ken Ferguson
Chief Revenue Officer of orgvue
”Visualisation spurs creativity which is
sometimes lost in business decision making.”
The human aspect of transformation
Transformation
with purpose
Data-led reorganisation
and the what if mindset
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Illustration credit: Valerio Pellegrini