Strategic Human Capital Insights

Organizational development, or OD for short, refers to the process of improving an organization's overall effectiveness and efficiency through planned interventions. It is a long-term effort aimed at enhancing an organization's capacity to achieve its goals and objectives by fostering a healthy and productive work environment. OD is a complex field that involves various disciplines, including psychology, sociology, economics, and management. It is rooted in the belief that an organization's success depends on the performance of its people, systems, and processes. Therefore, OD seeks to improve these elements to enhance an organization's overall effectiveness.

The process of OD involves a range of activities, including data collection, analysis, and feedback. It requires a deep understanding of an organization's culture, values, and goals. The following are five of the critical components of organizational development:

1. Change Management:
   OD is a process of change that can be challenging for organizations. Change management is a critical component of OD that helps organizations effectively navigate through the process of change. It involves identifying the need for change and assessing the risks and benefits associated with it. Developing a plan for change requires a detailed analysis of the organization's current state, future goals, and available resources. Once a change plan has been developed, it's essential to implement it in a way that minimizes disruption and maximizes the likelihood of success. This may involve training employees, communicating effectively, and providing ongoing support throughout the change process. By effectively managing change, organizations can achieve their goals and improve their overall effectiveness.

Does your organization have a structure that has both a hierarchy and a matrix structure? To clarify:

• Hierarchy - A hierarchy structure is the traditional organizational structure broken down into functions. A manager heads up the function with employees reporting to the manager. It is depicted in the typical organization chart format.
  
  
• Matrix - A matrix structure is a fluid 'structure' typically described by the following statement: "This is the org chart, but here is how the organization really works." It is depicted by an 'organigram’©, a spaghetti chart of interlinked solid and dotted lines. The solid lines represent the traditional organization chart. The dotted lines represent the fluid matrix interactions.

If your answer to the above question is yes, you are like many other organizations. As the nature of work has changed over the years, the matrix organization has evolved to become today's new normal. In a matrix organization, your people must be responsive to a functional boss, accountable, and responsive to the many others in the matrix with whom they are linked, represented by the organigram's dotted lines.

In the matrix organization, the rules of engagement are gray and cloudy, and the skills needed are both knowledge skills and, just as importantly, soft skills. In the matrix organization, getting the work done looks effortless when things are working correctly. However, effortless takes a lot of effort. But when things go wrong in the matrix, they go very wrong. To make the matrix work effortlessly, employees need to know what is expected of them and the skills they need to make the matrix work.

This is a guest blog post written by Rodney Nelson, Vice President of Client Operations for the Arizona Manufacturing Extension Partnership.

A Multi-Faceted Process Flowchart Approach

For the past four years, I have been supporting local Arizona manufacturing businesses, providing them with a wide range of organizational development and training services. What I have found is that these businesses are looking for training they believe will help their teams and companies work more efficiently. Whether a company is choosing to do a single or numerous training and development sessions, the chance of that training sticking past the first two weeks is very slim.

How Can You ‘Make It Stick’? 
The “it” could be any type of change where employees are learning a new skill and are expected to use that skill going forward. Yes, we have all heard the saying, “you need management buy-in” but, unfortunately, that is not enough. Management’s expectations need to be documented all the way down the chain of command, and we need to hold both the workers and supervisors accountable.

How to Keep Your Human Capital Continuous Improvement Process© Continuous

Now that your performance review process is over and the forms are all filed away, the important part of the job awaits! Reviews should not be done for the sake of reviews and end up in the HR department. The review process should be the first step in the many steps of the ongoing employee development process.

So, What Comes Next?
In a robust human capital continuous improvement process, it’s time to make sure that employee performance and capacity stay aligned with the following: 

• Strategic goals and initiatives of the organization
• Skills and knowledge needed to stay relevant with the evolving business skills and tools for today and tomorrow
  
  

1. Create Individual Employee Development Plans
It’s time to data-mine the rich information in the Performance Reviews and identify the gaps in knowledge, skills, and tools. Create an ongoing monthly/quarterly development plan for each employee from that information. In today’s changing world, skills are eroding faster than before. New knowledge and skills are required to help employees stay current and relevant to the job demands and optimize the many business tools available. Development plans are the mechanism to ensure that employee skills and knowledge remain aligned with organizational goals.

Here are some skills to evaluate:

• Technical Knowledge and Skills
• Business Tools Knowledge and Skills
• Professional Skills (communication, critical thinking, effective presentations, etc.)
• Leadership Skills (at all levels)
• Customer Experience / Culture Skills

Like everything else in business today that is undergoing constant growth and change, the strategic review of the Performance Review process is not exempt. Too often, outdated, irrelevant performance review forms, which drive the performance review process, are kept in place without question. However, this form should be constantly reviewed since strategically-aligned performance is critical to any high-growth organization.

As often as your strategy is reviewed, that’s how constantly your performance review form should be reviewed, as well. Why? The accompanying job description will likely be evolving and/or completely changing. And as new skills are required to perform a task, these new skills and competencies must also be reevaluated.

A Typical Example 

A paper-intensive and manual ordering process has been replaced by a software application that virtually eliminates paper from the process. This will allow orders to bypass the customer service department and move directly into the fulfillment department. Only exceptional cases will now be handled by the customer service department. The clerical function of routinely double-checking for correct orders and sales tax has been replaced by software. Four things will happen:

Would you build a house without a sturdy foundation? When I speak with start-up-to-growth companies about how they value robust organizational structures, the first response is typically, “We don’t want to introduce anything into our organization that makes us look like big, old-fashioned companies.” 

I can understand their sentiment; however, by simply dismissing anything that appears to be ‘big company focused,’ you eliminate fundamental best practices that work for all organizations. The trick is to introduce the best practices that create an excellent structural foundation without introducing the additional layers of bureaucracy that can negatively encumber a start-up-to-growth company. So how do you manage the proper balance? 

Here are 6 Organizational Structures Your Company Can No Longer Do Without

Step 1: A CURRENT ORGANIZATION CHART

Every organization with more than five people needs an organization chart. The organizational chart captures how the organization is structured, who reports to whom, and who is functionally responsible and accountable for each task. When a company is small, people often wear many hats. They are busy doing a lot of different things but likely not responsible for specific functions. A company without an organization chart is potentially an entity that is busy but chaotic and focused on getting things done now with a potential accountability gap.

As you prepare for a robust performance review discussion with your employee, you will likely encounter at least one of the following situations:

• That's not my job
  The employee who should be doing more tasks but has conveniently reshaped their job to include the functions they enjoy doing and eliminate the functions they don't like or don't know how to do.

• It takes two people to do one person's job.
  The employee who has the knowledge and skills to perform the tasks and responsibilities of the full job description but doesn't have the confidence to do those tasks and responsibilities at 100%, on their own, without constant reinforcement from the manager or other employees.

• The helicopter manager syndrome
  The employee who can perform their tasks and responsibilities when the manager hovers over them, but the minute the manager stops hovering, the caliber of the work slips again. This employee can do the job but either can't or won't sustain peak performance independently.
  

What do all these employees have in common? They are all busy doing work, but when measured against the job description benchmark, they all fall short of ideal performance. 

In a recent meeting with managers, we were discussing the elements of conducting a successful performance review meeting, and the following questions came up:

• How do we hold an employee accountable for increased performance?
  
  
• What if the employee thinks they are doing a great job and doesn't agree with us?
  
  
• How do we keep the conversation from going around in circles and not achieving consensus or agreement on performance standards?

HUMAN ASSET MANAGEMENT STRATEGY AND THE CONTINUOUS IMPROVEMENT LOOP

Why do organizations invest time and effort into continuous process improvement and stop there? When people drive the responsibility for continuous process improvement, shouldn’t there also be an aligned Human Asset Continuous Improvement Loop for those who drive the process?

How often do the following questions come up?

• Why aren’t my people coming up with solutions to problems they encounter?
• Why can’t employees see beyond the next step?
• Why isn’t the quality control/assurance function as proactive as it should be?
• What has happened to the disappearing skills of:
  • Trend Spotting?
  • Problem Identification?
  • Problem Solving?
  • Critical Thinking?
• Why aren’t people planning, recommending, and thinking about business impact analysis?

Over the past year, there has been a significant amount of research conducted on the challenges of meeting the workforce demands as we approach 2020. There is no doubt that organizations will face significant human capital challenges globally over the next five years.  One of the core issues emerging from this research is the critical role that HR has, can and should play in this human capital planning process.

Organizations globally are facing change and transformation in ways they have never experienced before.  The importance of having highly skilled employees ready to meet competitive challenges and accelerate business growth has never been more important to organizational sustainability and peak performance than it is today.  Human capital is being viewed from the lens of value creation and is now a strategic imperative. While the issues of human capital development are a core HR responsibility, the research shows that HR’s voice is not being heard as loudly as it should and that HR often does not have a seat at the table. 

The function of human resources (HR) means so many things to different people that, in many cases, there is a resulting identity problem for HR. There are mixed and sometimes unrealistic expectations of the HR function. Over the past decade, HR has attempted to rebrand itself to the point where the terminology is ambiguous! No wonder people outside HR are confused about what HR does. The new word in vogue is Talent – and it describes everything from Talent Management, Talent Acquisition, Talent Development, Talent Success, Talent Engagement, and the list goes on. HR is evolving and going through rebranding at the same time. It is no surprise that the people whom HR serves may be confused about what HR does. HR is now responsible for several functions that didn’t exist when I started working in HR. I remember when HR was the upgraded version of Personnel – but what has changed over the years? 

The one change that the recent research does highlight is that the perception and value of HR has changed. The consensus view globally is that HR’s value is in steep decline. How can that be? It may be in the evolving perceptions of HR.