In part 1 of this four part series of blogs I covered the importance of PACE in your organisation to improve effectiveness and speed and specifically Planning:
PACE = Planning + Alignment + Communication + Execution
The second part of The Need for Speed ~ Driving Pace in Your Organisation will focus on Alignment of your organisational structure, your people and your rewards and performance management capability.
a) Organise your teams around your One Magnificent Goal! – Your OMG!
The benefits of a well aligned team are no surprise to anyone. A great deal has been written about how to create better alignment within teams, through team building, incentives, and other management techniques. However, the first step in any effort to improve the alignment amongst a group must start with an honest evaluation of the current state, and a desire to improve and a clear view as to where you’re going.
Convene a group of key managers within your organisation to help you look at the impacts, both positive and negative, of your current organisation structure and how it might look when aligned to your OMG. When realigning, you want to ensure that you don’t lose any core competencies. You also want to ensure that any proposed changes will support the goals you have set as well as continue the things your business already does well. A group of managers who understand the detailed workings of your organisation will help you greatly.
Develop several alignment models from which to choose. Consider movements with your existing people, additions, subtractions and combinations of these things when devising different structures that might support your goals. Use organisational charts to help you express these models so they are clear and tangible.
Solicit input from other business leaders you know, respect and trust. Examine the financial, strategic and organisational culture impacts your various alignment ideas might create in order to help you to arrive at your decision. You also need to understand any Human Resources / Employment Law ramifications of your decisions before you begin to implement.
b) Align performance goals and rewards around your OMG
To ensure achievement of your OMG you must align all your teams’ performance goals and rewards to it. In so many organisations, individual departments have separate performance metrics that do not align to their OMG. More importantly people are often rewarded against Key Performance Indicators that are misaligned. Some common examples of this might be; Sales are paid on revenue and the OMG is to increase margin; Customer Services are rewarded against hitting call statistics when the OMG is around improving customer satisfaction. Neither is complete misalignment, but both can cause a big enough gap in behaviours for the OMG not to be achieved.
When metrics and rewards systems are not realigned with changes in structure and business processes, the impacts are predictable:
• Individual performance targets compete with the OMG.
• Roles and accountabilities are confused or continue to be aligned around the old organisation design.
• Decisions are made to optimise performance in one unit contrary to the needs of the larger organisation.
• The organisation is slow to act and burdened with internal conflicts.
• Leaders resist change (because it is rational to do so when incentives encourage old behaviours).
• Individuals begin to question the impact of the organisation design changes on their personal economic well-being, distracting them from winning in the new formation.
Again, sound out your leadership team to ensure that cross-organisation goals and rewards are not in conflict with each other before you implement. Talk to leaders and managers in other companies to get some broader context of what works and doesn’t work elsewhere.
It’s really important that the reward structures align from top to bottom within your organisation and there is an OMG specific payment when you achieve it – A Long Term Incentive. That encourages everyone from Executive to Admin Assistant to shoot for the OMG. Obviously the levels of reward might be different, but everyone wins when you achieve your goal!
c) Push decision-making authority as far down the organisation as possible
In the era of organisational flattening, there are less and less layers of management. We are happy about getting rid of hierarchies, but we are less good at understanding the associated challenges. If a layer of management disappears, decision-making should go to the lower level and not to the higher one. A reorganisation where layers go down from 6 to 3, but where senior management absorbs most of the decision rights that became available tends not to work effectively.
A consequence of decision-making being pushed down is that there are many new ‘decision homes’ where empowered people could make a decision on the spot. One of the big problems associated with decision rights flowing upstream, to a higher level, is that these decision rights tend to go or be deferred to the management bodies that only meet from time to time.
So, pushing the decision rights down to a lower level also means that many decisions could be taken ‘in real time’. Provided that people are empowered to do so, there is no reason why they should delay the decision-making process. Pushing decisions downstream and making decisions ‘in real time’ as much as you can are two simple disruptive rules. They won’t cost much but they have the power to transform your company on a big scale.
Some principles you should consider:
- Implement decision-making at lower levels across the business, not just in one or two departments
- If something can be decided at a lower level, it should. And you should make it lower and lower all the time.
- If nothing can be decided at a lower level, you are the problem.
- Your management goal is to decide less and less every day.
‘Closure’ and decisions made in meetings and committees may be efficient, but not necessarily effective if it could have been done at a lower level.
The amount of ‘deferred decisions’ (as opposed to real-time ones) in your organisation is a good indicator of your agility and empowerment. How many organisation even measure this I wonder?
d) Clearly defined roles & responsibilities
In order to effectively manage your people, it is important to provide them with a clear definition and understanding of their role, function, and responsibilities in the workplace. This will provide them with a good understanding of the job and tasks they are to perform as an individual and within any teams they are a part of. It also provides information on where they fit within the organisation and who they report to, helping to avoid disputes and misunderstandings over authority.
Failing to define workplace roles and responsibilities can create tension, miscommunication and inefficiency within your business. People may be unsure as to what jobs are their own and who they are required to report to. Mistakes and omissions can also occur where people are unsure of what is required of them, therefore creating inefficiencies which cost time and money.
e) Stopping projects / activities that don’t support the plan
Tighter goal alignment and goal visibility allows for quicker execution of organisation strategy by enabling your management team to more effectively allocate resources across various projects. By exposing business initiatives not aligned with your OMG, it also increases overall efficiency by ensuring employees are not duplicating the efforts of others. Plus, goal alignment strengthens the leadership at your company by allowing managers to:
- Understand more clearly all responsibilities associated with specific goals
- Eliminate redundancies across job titles
- Focus their staffs on your company’s most pertinent goals
So, you’ve now got the right people, organisational structure and performance culture to deliver your plan. In Part 3 of The Need for Speed – Driving Pace in Your Organisation, I will be look at the third element of PACE, Communication.