Organizational Design and Architecture
Since sending out my newsletter titled The Organizational Architect, I’ve had several people ask what’s with the architectural reference (The picture on the newsletter is of MIT’s Stata Center, designed by Frank Gehry)? The reason I chose architecture as a theme is that I believe that those of us who work in organizational design and development have a lot to learn from the practical art, especially as it is practiced by some of the great contemporary architects like Gehry, Koolhaas, Venturi, Hadid, etc. To continue to be relevant, architects like these have had to redefine their field in light of changes in cultures and aesthetics, new materials and technologies, while at the same time pushing the envelope of design and construction technology.
If you think about it, the field of OD is in need of similar change agents. As new organizational building “materials” emerge like advanced social networking technologies, and advances in the cognitive and social sciences, OD must redefine itself to remain relevant and to be able to offer a vision for changing our thinking about how we organize to get things accomplished.
Over the next several posts I will look at how some of these architectural visionaries may offer us some suggestions for moving our practical art forward into the future.
Change Management – Use What You’ve Got
Over the last 25 years, I have worked with many groups and individuals in managing and navigating major change, whether implementing new technology, acquiring a new company, turning around a struggling business, bringing new leaders into an organization or other projects that have implications for the people of an organization.
One thing I’ve noticed that separates the successful change initiatives from the unsuccessful ones is that those that are successful are led by people who understand and use the organizations current culture to ensure that the change is successful.
It sounds counter intuitive; why wouldn’t you first create a compelling vision of the future and just move forward? Actually you can do this, but the rate of success using this approach drops off exponentially. A better approach is to gain an understanding of where the organization is currently—both the good and challenging aspects—and use the organizations strengths to move the initiative forward.
Fortunately, there are tools that can help a leader or a team create a baseline, to help identify an organization’s “pressure points” and strengths to be used in making the change “stick”. A little more time spent on understanding and utilizing an organizations current culture can greatly reduce the risk of failure.
Culture and Innovation
Culture and the Bottom Line
Proving the Link: ROA, Sales Growth, Market to Book
Mergers and Aquisitions
The importance of culture to M&A success:
Human Capital or Social Capital?
I’ve struggled with the term “Human Capital” for a while now. It always felt like a limited economic or financial concept that only captures a part of the value of an organizations workforce. Economists often describe human capital as the value a worker provides to an organization. Value is often described in terms of the experience, training and skill of a worker-an important measure, but limited in its ability to value a company’s future potential.
Many HR practitioners and consultants use the term as a catchall to describe an organizations workforce, and all or most activities related to it. Human capital is seen as important, but the ability to assess its present or future value to the organization in a way that informs action is fuzzy at best. In my mind, it would be more useful to construct a way of measuring or valuing the workforces’ potential to have a positive impact on an organizations ability to deliver economic value.
Social capital, a concept described by Ryan Smerek and Dan Denison in a recent paper (Social Capital in Organizations: Understanding the Link to Firm Performance), offers a much more useful way of thinking about the current and potential economic value a workforce represents in that it better describes the link to an organizations bottom line: “The social capital perspective seeks to explain the conditions under which “social” resources developed or acquired in one period have an impact on the strategic advantages of firms in subsequent periods.” Social capital includes human capital, but it adds the measurable value of organizational culture (internal social capital) and how organizations link and build “bridges” with the external environment. This broader perspective helps leaders understand how the people within an organization add value, and how to better measure and impact an organizations performance.
Balance Tough-Minded Action & Accountability with Intuition & Compassion
I was on the way to visit a client recently and was listening a radio program discussing the difficulties of those that are unemployed finding work. Of the 5 or so commentators, one was a corporate HR leader and another an external recruiter. Both explained that it was a great job market for those who are employed, but those who are unemployed were unemployed for a reason (that companies shed their weak talent). The corporate HR “leader” went on to say that her company and others had adopted a policy of not hiring any unemployed candidates and had made that clear in their job postings. After I regained my composure, I began to think about the possible causes that lead to such uniformed and incredibly ignorant (not to mention immoral) thinking. To give these commentators the benefit of the doubt, they seemed to be playing the tough-minded, all-business HR pro-commenting on the hard science of why certain less talented people are let go and why they are not rehired. It struck me that this could represent a broader cautionary tale on the need to balance tough-minded action when it’s call for with intuition, wisdom and compassion. In this way, our hard earned seat at the table is less a deal for our soul and more a real contribution to the betterment of the businesses and communities we are a part of.
Embrace Innovation, Embrace Social Media
Innovation & HR
If you ask a CEO where innovative thinkers are to be found in the organization, it’s a good bet that it’s not HR. Luckily events are conspiring in our favor where we will get another chance at bat.
Given the advances in technology in general, and web technology in particular, businesses are in a different place than they were 10 or even 5 years ago. Social media will change the way work gets done, and established businesses will have great difficulty going up against smaller and more sophisticated competition. HR has an opportunity to help traditional organizations re-think their structure and processes to effectively compete.
This is not change around the edges; it’s rethinking how and where we work, how we reward, and what skills will be needed. Outdated assumptions on how we get work done have to be challenged and revamped. It will take a great deal of skill and leadership, but the good news is this is in HR’s wheelhouse. The bad news is if the opportunity to lead here is missed, if the only contribution made are policies defining who gets to use the internet, which social media sites are “appropriate”, or what happens if you surf porn at work, HR with go down a path of increased marginalization and irrelevancy.
Courage
Executive Pay
“The recent economic crisis and the role that our compensation systems played in fomenting it require a holistic re-examination not only of compensation but of the assumptions and values underlying the economic system we have created.” (The Pay Problem: Time for a New Paradigm for Executive Compensation; Lorsch & Khurana, Harvard Magazine- May-June 2010).
It takes courage to stand up for what we believe in, to do what we know is right and lead others through difficult times. We are experiencing a recession of epic proportions, brought about by bad decision-making, motivated by greed and short-term thinking. The press covers huge executive salaries, huge bonuses at companies that are receiving taxpayer money. Yes, press coverage can be sensational, oversimplifying complex pay schemes, etc., but even granting that, where is/was the HR community? How did we get here? What’s our plan for moving forward? It seems that we have been notably silent, searching for solutions from some of the same practitioners that helped ratchet up executive pay in the “war for talent”. My hope is that in 2011 we can work with all organizational stakeholders to craft a more sustainable way forward. I know that is one of my goals.
Employee Compensation
Many companies have done the best that they can in working through these difficult times. Running a business is never easy, and we all have to make the hard people decision when our financials are not sustainable. However we all know about or have heard of companies who, after asking their employees for wage concessions in lieu of layoffs, determine that this new lower level of pay will become permanent, even though the company has returned to a higher level of profitability than before the wage freezes or cutbacks. Taking advantage of employee goodwill is not a good idea-is it possible that this needs to be stated? We can do better.
Moving Forward in 2011
As HR professionals who have earned a “seat at the table”, we must take the responsibility that comes with the power we’ve been given. We have to posses the courage it takes to push back against poorly thought-out decisions. In fact, with our experience and training, that is what our seat at the table brings to the executive team. If we don’t have the courage to stake a claim for the good of the enterprise, then we become corporate lackeys or mouthpieces for flawed corporate governance. We can do better. We have an opportunity to prove our value this year as we help our Boards and executive teams navigate this recession to recovery. I have faith that we can.
