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Restructuring: Assessment Processes and Methods for Redeployment

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Stock image 2 - Redep assessment process & methodsOrganizations that have survived over time have had to reinvent themselves over and over with the changes in the environment.  These Business Transformations almost always include Cost Reduction that tend to lean towards Headcount Reduction.  Headcount Reduction is typically achieved using 2 approaches:

  1. Downsizing
  2. Restructuring

Downsizing keeps the fundamentals of the roles same with only fewer people performing those roles.  Whereas, Restructuring creates new roles, as well as modify existing roles, requiring a new mix of skills or altogether new resources to perform them.

Restructuring presents a more challenging task in that a new mix of skills has to be identified for each role, an Assessment Process has to be set up to assess existing employees against new competencies, and Redeployment after Restructuring (or new recruitment) done.

The important question in both scenarios is:  Who should we eliminate and who should stay?

The question can be answered by devising and using key criteria to evaluate and then choose the most relevant assessment method.

Assessment of employees is key in both Downsizing as well as Restructuring.  The Assessment Process has to be vigorous enough to identify the right employees to keep and lay off.  A broader assessment process ensures coverage of more aspects of a new role which in turn makes the assessment process fairer.  Measures, in this regard, may include:

  • Covering a broad range of competencies in the interview process rather than concentrating on a few specific competencies.
  • Using a mix of relevant performance data from the last role as well as some elements of future-oriented assessment, such as role plays or OPQs.
  • Taking input from Line managers.

Linkage of the entire assessment process to the requirements of the job is the crucial part of this phase.

As with any assessment system, the content and design will be settled through consideration of various factors, some practical like cost, logistics and some more about safeguarding the output like instrument validity.  When taking into account assessment tools for incorporation in the process it is beneficial to examine them against following criteria:

  • Coverage of range
  • Accuracy
  • Relevance
  • Freedom from bias
  • Acceptability
  • Practicality

The tools, based on the above criteria, help in various assessment methods that gather information on different aspects pertaining to the elements of the new roles.  The most widely used Assessment methods include:

  1. Existing Performance Management Data
  2. Line Manager Performance Ratings
  3. Competency Based / Behavioral Interviews
  4. Personality Measures (OPQ) Linked to Competencies
  5. Simulation Exercises
  6. Pertinent Employee Data

Let us examine the methods in a little more detail.

Existing Performance Management Data

There are various benefits of using this employee assessment method, such as:

  • No additional data gathering is required since the data is already in place.
  • Such existing data can be obtained speedily and effortlessly.
  • Existing performance data is perceived as pertinent.

There are some drawbacks associated with the existing Performance Management data method that executives should be mindful of:

  • The data is often inconsistent and may vary in quality.
  • Does not provide clear distinction between people.
  • Does not reflect behavior therefore difficult to base decisions on.
  • Usefulness depends on extent of overlap with the new role.

Such data although convenient and easy to obtain, has to be augmented from other sources—and through other assessment methods—for a complete picture to base the employee selection decision on.

Interested in learning more about Redeployment Assessment Process & Methods?  You can download an editable PowerPoint on Restructuring: Redeployment Assessment Process & Methods here on the Flevy documents marketplace.

Want to Achieve Excellence in Business Transformation?

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“If you don’t transform your company, you’re stuck.” – Ursula Burns, Chairperson and CEO of VEON; former Chairperson and CEO of Xerox

Business Transformation is the process of fundamentally changing the systems, processes, people, and technology across an entire organization, business unit, or corporate function with the intention of achieving significant improvements in Revenue Growth, Cost Reduction, and/or Customer Satisfaction.

Transformation is pervasive across industries, particularly during times of disruption, as we are witnessing now as a result of COVID-19. However, despite how common these large scale efforts are, research shows that about 75% of these initiatives fail.

Leverage our frameworks to increase your chances of a successful Transformation by following best practices and avoiding failure-causing “Transformation Traps.”

Learn about our Business Transformation Best Practice Frameworks here.

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– Roderick Cameron, Founding Partner at SGFE Ltd

9 Communication Tactics Vital to Enable a Virtual Workplace Culture

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Virtual Work Comms 4Virtual Work has become a norm nowadays.  To enable Virtual Work, organizations should strive to develop an Organizational Culture of writing things down.  Documenting everything—from meeting notes to quarterly objectives—facilitates in developing stronger, informed, and more credible teams.

Organizations need to pay attention to and make good use of these 9 communication tactics to establish effective communication mechanisms among their remote teams:

  1. Daily Documentation
  2. Text-based Communication
  3. Low-context Communication
  4. Value-guided Communication
  5. Asynchronous Communication
  6. Good Habits
  7. Meetings
  8. Informal Communication
  9. Foster Relationships

Virtual communication tactics are essential for inspiring collaboration required for developing a more connected team.

Now, let’s talk about some of these tactics in Corporate Communications in further detail.

Daily Documentation

To have more collaborative work place and to have fruitful online meetings, virtual organizations need to follow these guidelines:

  • Share formal agenda and discussion items well in advance of the actual meetings.
  • Diligently document key ideas, points, and decisions for geographically dispersed team members to know their responsibilities, action items, and rationale for decisions.
  • Virtual teams should be encouraged and rewarded by the leadership on their thorough documentation, just as achievement of sales targets are rewarded.  This is particularly necessary since people tend to leave documentation when they have other urgent tasks at hand.
  • Encourage teams to document a solution as soon as it is discovered, since our ability to remember and recall is limited. Prompt documentation of solutions also ensures readiness of answers to other team members’ queries in future.

Text-based Communication

For most people from an in-office environment, text-based messages are pretty awkward and cumbersome.  They are used to one-to-one or in-person meetings and communication, instead of text-based communication.  Making these people adopt text-based communique and use it to their advantage demands quite an effort and behavioral change.  However, mastering the art of textual communication affords a number of benefits for teams, projects, and organizations alike, including:

  • Text-based communication is vital for Virtual Work where team members are dispersed in different geographies. It is a medium which is inclusive, respectful, and emphasizes a documentation Culture.
  • Documentation is a real competitive edge. A Culture without mandatory documentation gives rise to inefficiencies, knowledge leaks and repetition.
  • Text-based communication seems a liability but helps avoid unnecessary meetings with the sole purpose of “filling someone in.”
  • Cultivating a habit of communicating answers to problems through text makes documentation simpler, assists in asynchronous work, and provides information to all at the same time.
  • It frees up individual’s time for contemplation and idea generation.

When communication stakes are high in the game, there are some key considerations to follow in text-based communication:

  • Consider evaluating your conservation through an external party’s perspective before sharing.
  • Be mindful of the differences in various Cultures and communication styles.
  • There can be lags in obtaining input from the other team members due to difference in geographies and time zones.
  • Keep in mind that there can be minimum to none non-verbal communication.
  • There is emotional lag in communication.
  • Analyzing the mindset and frame of mind of the audience is a bit tough.
  • Management should assist team members in communicating effectively and getting the best out of Virtual Work.

Interested in learning more about the other communication tactics and guidelines for virtual work setting?  You can download an editable PowerPoint presentation on Virtual Work: Communication Tactics here on the Flevy documents marketplace.

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– Michael Duff, Managing Director at Change Strategy (UK)

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– Omar Hernán Montes Parra, CEO at Quantum SF

Redeployment – The Most Critical Phase of Restructuring

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Stock Image 2 Redeployment after RestrucBusiness Transformation is a given in the lifecycle of organizations.  If an organization or business desires to continue growing gainfully, it has to keep Restructuring and Innovating with time.  Successful Restructuring can be achieved by pursuing a robust 4-phase approach.  Each incremental phase paves the way for shaping the next phase:

  1. Strategic Analysis
  2. Structural Redesign
  3. Redeployment
  4. Renewal

Redeployment is the most critical phase in the Restructuring process.  It presents an opportunity to progress towards strategically directed performance goals and establish the foundation for a new Organizational Culture.

Carrying out an efficacious Redeployment, however, necessitates navigating around the pitfalls that threaten the process.  These snags include:

  • Lack of detailed planning on how Redeployment will be handled

“If you fail to plan, you plan to fail” is an oft repeated adage that has wisdom based on experience of many failures throughout history.  The Redeployment plan should be thoroughly discussed and developed at the Redesign stage, giving out details of all aspects of Redeployment.

  • Restricted access to information approach

Organizational leadership often try to avoid sharing information due the fear of losing control.  During the tumultuous phase of Redeployment, leadership should be communicating with the employees quite frequently to alleviate any concerns and build their trust.

  • Failure in immediate and full disclosure of information

Timely and full disclosure of information is absolutely essential for the process to run smoothly.

A robust communications system has to be put in place for dissemination of timely information predominantly in the Redeployment phase as employee apprehensions are at the highest level in this stage.

You can learn more about the pitfalls during Redeployment here in the editable PowerPoint on Redeployment after Restructuring.

Redeployment, in order to be successful, has to go through 7 steps that need careful planning and execution with precise timing.  These 7 steps include:

  1. Continuously maintaining a robust Communications Plan.
  2. Developing an employee assessment system based on the newly-defined business needs and goals.
  3. Creating a system of reviews and appeals.
  4. Deploying an internal placement group.
  5. Launching a severance plan for those who decide to leave the organization.
  6. Providing training to employees at all levels for them to be able to develop competencies required to assume the responsibilities in a transformed organization.
  7. Planning for the renewal phase following redeployment.

Let us delve a little deeper into this second step:

2. Develop an Employee Assessment System based on the newly defined business needs and goals.

The system should assess potential employees against required competencies for the position.  A matrix should be created to serve as an assessment tool to structure the selectors’ thinking. Each competency should be assigned a weight and the cumulative score should be the sum of weighted scores of each competency.  Input should be based on interviews with candidates, feedback from managers and supervisors.  The matrix should be used as a tool only and selection decision should not be predetermined rather based on all aspects, i.e. qualitative as well as quantitative.

The selectors should be trained to ask targeted questions to assess competencies and document them properly.  Assessment should be divided into 3 sections:

  • Go/No-Go section to assess the candidates’ ability to meet the minimum requirements.
  • Evaluation of each candidate against the competencies mentioned for each position.
  • Document modification in decision due to absenteeism, affirmative action concerns, etc.

Interested in learning more about the Redeployment Steps?  You can download an editable PowerPoint on Redeployment after Restructuring here on the Flevy documents marketplace.

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“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market. They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions. I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power. For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant’s toolbox.”

– Michael Duff, Managing Director at Change Strategy (UK)

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

“Several times a month, I browse FlevyPro for presentations relevant to the job challenge I have (I am a consultant). When the subject requires it, I explore further and buy from the Flevy Marketplace. On all occasions, I read them, analyze them. I take the most relevant and applicable ideas for my work; and, of course, all this translates to my and my clients’ benefits.”

– Omar Hernán Montes Parra, CEO at Quantum SFE

Employee Onboarding: How to Get Off to the Right Start

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The single most pressing challenge for an organization in this knowledge economy is attracting and retaining talented people.  This can be a make or break challenge for the organization and warrants careful consideration during Strategic Planning.

Starting on the right foot is absolutely essential to overcoming this challenge.  Organizations, particularly HR, need to have an Organizational Culture that boasts of an effective Employee Onboarding process.  In order to accomplish this, present-day HR needs to be clear regarding the challenges of modern-day Onboarding and develop a strategy to establish an onboarding process that yields a rewarding experience for the employees.

At many organizations the Employee Onboarding process follows a customary theme—a run down on “how things are done here”—with the traditional HR view that if the employee can be made to commit to the Organizational Culture from the get-go, they are easier to retain.

Such an Onboarding process does not help the new employee adjust to the company or the role, become an Engaged Employee, and meet the expectations of the organization.  Experts have identified various challenges with this conventional Onboarding approach.  Here is a list of 8 most frequent challenges:

  1. Poor Socialization of Organizational Values
  2. Lack of Role Clarity
  3. Challenges with Expectations and Results
  4. Managing Change
  5. Issues with Time Management
  6. Issues with the Manager
  7. Navigating the Culture
  8. Handling Personal Transition and Relocation

By addressing these challenges appropriately, organizations can establish a rewarding Employee Onboarding experience that results in Employee Retention, quality output in the short-term, and enhanced productivity in the longer run.

Let us delve a little deeper into the challenges.

1. Poor Socialization of Organizational Values

It is presumed that Organizational Values are a thing to be imparted and accepted by the new employee.  This is, indeed, essential knowledge, but it is not sacrosanct.  Studies suggest acceptance of organizational values in contravention of one’s own identity may be counter-productive in that it may exhaust the employee psychologically, restrict full engagement, hinder creativity, and create work dissatisfaction.  This can be overcome by allowing employee to express their unique perspective on the job from the beginning and welcoming them to incorporate what they do best in their work.

2. Lack of Role Clarity

Lack of clear understanding of one’s role is a widespread problem in organizations.  After spending some time in the new organization, the employee realizes that the expectation of the role is conflicting with what the employee thought he/she accepted.  Encouraging the new employee to identify the gaps in the expectation / perception and discussing it with their managers enables the employees to have a clear perspective and understanding of their roles and responsibilities, enhances employee satisfaction levels, and improves their efficiency and productivity.

3. Challenges with Expectations and Results

New employees are often unable to realize their workload.  In order to meet the perceived expectation of managers or peers, they take on too much of work resulting in overload, which diminishes their performance.  Informal discussions of new employees with managers and peers regarding their expectations eases the pressure and enables them to take on what is manageable and deliver quality results.

Interested in learning more about various aspects of Employee Onboarding, guiding principles, challenges, and approaches?  You can download an editable PowerPoint on Employee Onboarding here on the Flevy documents marketplace.

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Transforming Employee Engagement into a Competitive Advantage? Here’s How

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5 Dimensions of EE - Stock image 2Organizations typically focus on Customer-centric Design in their Strategic Planning and overlook the critical driver of Performance, Growth, and Operational Excellence—their employees.  With cut-throat competition now the norm the realization has become clearer that employees are:

  • The face of the business and create lasting—or perishing—brand impression.
  • Sources of innovation and organizational knowledge.
  • Representation of the company’s service philosophy.
  • Expected to live by its Organizational Culture and values.

Employee Engagement has emerged as one of the significant pillars on which the Competitive Advantage, Productivity, and Growth of an organization rests.  What, exactly, does it mean when an employee is engaged?  Employee Engagement, over the years, has been thought of in terms of:

  • Personal engagement with the organization.
  • Focus on performance of assigned work.
  • Worker burnout.
  • Basic needs (meaningful work, safe workplace, abundant resources).
  • Attention on Cognitive, Emotional and Behavioral components related to an individual’s performance.

Although Employee Engagement is widely seen as an important concept, there has been little consensus on its definition or its components either in business or in the academic literature.

Kumar and Pansari’s 2015 study define Employee Engagement as:

“a multidimensional construct that comprises all of the different facets of the attitudes and behaviors of employees towards the organization”.

The multidimensional construct of Employee Engagement has been synthesized into the following 5 components (or dimensions).

  1. Employee Satisfaction
  2. Employee Identification
  3. Employee Commitment
  4. Employee Loyalty
  5. Employee Performance

The 5 dimensions of Employee Engagement have been found to have a direct correlation with high profitability, as substantiated by a number of research studies:

For instance, a study of 30 companies in the airline, telecom and hotel industries shows a close relationship between Employee Engagement and growth in profits.  After controlling other relevant factors—i.e., GDP level, marketing costs, nature of business, and type of goods, the study found:

  • Highest profitability growth—10% to 15%—in companies with highly engaged employees.
  • Lowest level of profitability growth—0% to 1%—in companies with disengaged employees.

Research reveals that Employee Engagement affects 9 performance outcomes; including Customer Ratings, Profitability, Productivity, Safety Incidents, Shrinkage (theft), Absenteeism, Patient Safety Incidents, Quality (Defects), and Turnover.

The differences in performance between engaged and actively disengaged work units revealed:

  • Top half Employee Engagement scores nearly doubled the odds of success compared with those in the bottom half.
  • Companies with engaged workforces have higher earnings per share (EPS).

These 5 dimensions become the base for measuring Employee Engagement in a meaningful manner that permits managers to identify areas of improvement.  To assess an organization’s current status of Employee Engagement, a measurement system is needed that includes:

  • Metrics for each component of Employee Engagement.
  • A scale for scoring metrics in each component.
  • A comprehensive scorecard that pulls everything together.

Let us delve a little deeper into the first 2 dimensions of Employee Engagement.

Employee Satisfaction

Definition

Employee Satisfaction is the positive reaction employees have to their overall job circumstances, including their supervisors, pay and coworkers.

Details

When employees are satisfied, they tend to be:

  • Committed to their work.
  • Less absent and more productive in terms of quality of goods and services.
  • Connected with the organization’s values and goals.
  • Perceptive about being a part of the organization.

Metrics

The 5 metrics that gauge Employee Engagement in terms of Employee Satisfaction include:

  1. Receiving recognition for a job.
  2. Feeling close to people at work.
  3. Feeling good about working at the organization.
  4. Feeling secure about the job.
  5. Believing that the management is concerned about employees.

We take a look at another dimension central in significance.

Employee Commitment

Definition

Signifies what motivates the employees to do more than what’s in their job descriptions.

Details

Employee Commitment is much higher for the employees who identify with the organization.  This element:

  • Develops over time and is an outcome of shared experiences.
  • Is often an antecedent of loyalty.
  • Induces employees to guard the organization’s secrets.
  • Pushes employees to work for organization’s best interests.

Research has found that employees with the highest levels of commitment:

  • Perform 20% better.
  • Are 87% less likely to leave the organization.

Metrics

The 3 metrics that gauge the Employee Commitment dimension of Employee Engagement include:

  1. Commitment to deliver the brand promise along with knowledge of the brand.
  2. Very committed to delivering the brand promise.
  3. Feels like the organization has a great deal of personal meaning.

Interested in learning more about these foundational pillars to Employee Engagement? You can download an editable PowerPoint on 5 Dimensions of Employee Engagement here on the Flevy documents marketplace.

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7 Key Practices Which Separates Sustainability Leaders from Sustainability Laggards

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The Sustainability Performance of a firm can be viewed as a spectrum ranging from outstanding to inadequate. Firms rated as Sustainability Leaders are often proactive in addressing sustainability issues, exploring innovative solutions by mobilizing resources and actors interested in particular sustainability issues, and many times setting the sustainability agenda for their industry or geographic region.

Conversely, firms that are considered sustainability laggards often ignore stakeholder concerns about Sustainability and the need to change their behavior. Contrary to leading firms that usually direct their attention externally as much as internally, laggards are marked by a widespread lack of interest in Sustainability and tend to focus on their internal concerns and priorities

Corporate commitment to Sustainability-based Management is strengthening.

Even as organizations overall are strengthening their commitments to Sustainability, one cohort of organization is expanding its commitments far more aggressively than others. They have emerged as Sustainability Strategy Leaders, while others stand as Laggards.

A study conducted between MIT Sloan and BCG Consulting Group, addresses the reasons for the gap which separates Leaders from Laggards of Sustainability.  The study found strategic approach to Sustainability is the main differentiator between Sustainability Leaders and Laggards:

  • Sustainability Leaders — Leaders act on their belief that Sustainability is already at the core of their business and is a necessity to respond well to shifting customer preference.
  • Sustainability Laggards — Laggards view Sustainability in terms of risk management and efficiency gains.

The strategic approach also acts as a differentiator as to how Sustainability Leaders deal with other business parameters, such as:

  • Response to challenges and opportunities in Sustainability.
  • Approach to “terms” of competition in the context of Sustainability concerns.
  • Transformation of management practices in response to Sustainability requirements.

Making early moves even when all needed information around Sustainability is not in place is the first marked step of early adopters of Sustainability.

In a survey of global corporate Leaders conducted by BCG and the MIT Sloan Management Review, it was revealed that an economic downturn caused more emphasis to be placed on Sustainability in companies’ corporate agendas.

As more companies take up Sustainability, the report reveals a striking difference between two groups of companies, based on how they incorporate Sustainability into their business operations.

image (7)

Brief Outline

Sustainability Leaders have high-leverage tactics and strategies that transform the way their organization competes on Sustainability.  They have incorporated  Sustainability into their Strategy Development and Strategic Planning process.  Likewise, they exhibit a broader perspective of Sustainability and its implications to business. They have identified a range of business drivers that support their Sustainability Investments.

  • Increased Margins
  • Increased Market Share
  • Greater potential for innovation in their business models, processes, and access to new markets
  • Competitive Advantage

There are 7 key practices consistently followed by Sustainability Leaders.

  1. Move Early – Leaders take bold steps with an understanding that they need to make early moves even before they have all the answers in place.
  2. Balance Long and Short-Term goals – Sustainability Leaders strike a balance between their overarching vision and being specific about areas where they can gain a Competitive Advantage.
  3. Drive top-down and bottom-up – Leaders recognize that as much as it is a top-down exercise, Sustainability is also a bottom-up exercise.
  4. De-silo Sustainability – Leaders do not drive Sustainability in a silo, instead they integrate it into the very fabric of their business processes.
  5. Measure and monitor – Leaders establish metrics and baselines to measure their progress with Sustainability Initiatives.
  6. Value intangible benefits – Leaders are distinguished by their readiness to ascribe the value of intangible benefits to competitiveness due to Sustainability measures.
  7. Be transparent and authentic – Leaders are realistic with their Sustainability targets, and they openly communicate about their challenges and success around Sustainability.

Interested in gaining more understanding of Sustainability Leaders and their practices?  You can learn more and download an editable PowerPoint about Sustainability-Leaders vs. Laggards here on the Flevy documents marketplace.

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When Survival in the Midst of Chaos Calls for Supply Chain Sustainability

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In the modern age, organizations are striving to form a sustainable Supply Chain system to cope with the challenges that are arising. Such issues include the pic 1 Supply Chain Sustainabilityemission of hazardous substances, excessive resource consumption, Supply Chain risks, and complex procedures.

Through Strategic Planning, organizations around the globe are adopting strategies to become a sustainable organization.  In fact, there is an increasing trend towards organizations adopting sustainable Supply Chain Management practices.

Gaining a Foothold on Supply Chain Management

Supply Chain Management is the design, planning, execution, control, and monitoring of Supply Chain activities. It addresses the fundamental business problem of supplying products to meet demand in a complex and uncertain world.

Looking at Supply Chain Management, we can see that it draws on the value chain concept of business strategist, Michael Porter.  It looks at supply issues at the multi-company level.  It creates net value, builds a competitive infrastructure, leverages worldwide logistics, synchronizes supply with demand, and measures performance globally.

The need for Supply Chain Management came about when shorter product life cycles and greater product variety has increased Supply Chain costs and complexity.  And as outsourcing, globalization, and business fragmentation became a common practice, there was now the need for Supply Chain integration. This was further emphasized with the advances in emergent technologies. which created more opportunities for Digital Transformation within Supply Chains.

The 4 Levels of Supply Chain Management Strategies

There are 4 Levels of Supply Chain Management Strategies. The first 3 strategies are foundational Supply Chain Strategies.

Before any Supply Chain can be considered sustainable, there are 3 foundational Supply Chain Strategies that need to be undertaken.

  1. Legal Supply Chain Strategy. There are a number of legal rules and regulations that need to be followed by organizations. The Supply Chain Strategy must cater to all legal rules.  An example is a ruling according to the Restrictions of Hazardous Substances Directive (RoHS) wherein an organization must not rely on the mercury, cadmium, and chromium as they result in huge emission of hazardous substances.
  1. Ethical Supply Chain Strategy. To become an ethically strong organization, it is required that the organization operates with integrity and focus on what is right. The organization could develop a policy that governs the organization’s operations. It is also essential that the Supply Chain quality assurance team that is built complies with ethical sustainability.
  1. Responsible Supply Chain Strategy. To become responsible, the organization could spend resources in compliance with sustainable rules. The organization could set up training and development programs to drive sustainability within the organization. It can also focus on environment-friendly activities to boost its social responsibility.

Before an organization can become sustainable, significant efforts must be exerted to put the 3 foundational Supply Chain Strategies in place within the organization.

Reaching the Level of Sustainability

Sustainable Supply Chain Strategy has become increasingly important as more and more organizations are focusing on putting it in place.  According to the MIT Slogan Review, over 75% of organizations listed in the S&P 500 reported sustainability reports where it shows that catering up to the responsibility is becoming highly challenging and important.  There has been a significant increase and inclination towards sustainability and this depicts the importance of becoming sustainable.

With the passage of time, it has become evident that organizations around the globe are becoming fond of sustainable considerations.

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When Organizational Behavioral Issues Start Affecting Organizations

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Most organizations are unhealthy.  Only organizations that are recognized to be Resilient, Just-in-Time, and Military can be described and relatively free from pic 1 Organizational Behavioral Issuesdysfunction.  Yet, only 27% of the responses gathered from the Org DNA Profiler showed a healthy profile.

The Org DNA Profiler is a short online self-assessment tool launched on December 9, 2003. It was used to measure an organization’s relative strength in 4 key areas, on the basis of individual employees’ responses to 19 questions. From a total of 4,007 completed assessments collected, there were 6 Organizational Behavioral issues that were prompted.  These issues can still be turned around by undertaking the appropriate step.

The 6 Key Issues on Organizational Behavior

Organizational Behavioral Issues are observations on the prevalence of dysfunctions among business organizations.

  1. Most organizations are unhealthy. More than 60% of the organizations are either Passive-Aggressive, Fits-and-Starts, Outgrown, or Overmanaged.
  1. Organizational DNA changes as companies grow. Small companies report more Resilient and Just-in-Time behaviors. They become more centralized and demonstrate Military traits as they grow.  Once annual revenues cross the $101B threshold, decentralization occurs. However, often this is undertaken badly.
  1. Attitude determines attitude. There are sharp differences between senior management and lower-level personnel. A disconnect exists between the organizations that senior executives believe they have established and the organizations they are actually running.
  1. Non-executives feel micromanaged. Junior managers feel a lack of maneuvering room compared to senior managers who view their self-professed involvement in operating decisions as good.
  1. Decision rights are unclear. More than 50% of the respondents believe that the accountability for decisions and actions in their organizations was vague.
  1. Execution is the exception, not the rule. Less than 50% of the respondents agreed that important strategic and operational decisions are quickly translated into action in their organizations.

It is expected that all organizations have behavioral issues.  However, unlike humans and other organisms, organizations can change their DNA by adjusting and adapting their building blocks and resolve these issues. There are just processes that organizations must take into consideration to effectively address these behavioral issues and turn them around for the benefit and advantages of the organization.

The Need to Unlearn, Learn, and Relearn

It is advisable for an organization to continue to analyze its organization as it grows into and occasionally out of dysfunction.  This can be done by using a 4-step evolutionary process.

Step 1: $0 – $500 Million. The first step or Step 1 generally demonstrates characteristics depicting Resilient or Just-in-Time profiles.

Organizations at this level are effective at executing and adapting to changes in the environment. They are generally younger small companies that are attuned to and aligned with the vision and strategy of the founders. They are known to be able to adapt more nimbly to market shifts.

Step 2: $500 Million – $1 Billion. The second step is an evolutionary phase where organizations are starting to experience the adverse effect of growth in terms of size.  This is basically the stage where Military profile has reached its peak in revenue segment. These are the organizations that are bureaucratic, slow, and overly politicized. At this point, expanding middle management starts to second guess and interfere in lower-level decision making.

Step 3 is where organizations are becoming too large and step 4 is returning back to a Resilient profile. The 4-step evolutionary process reflects the stages of development of organizations as they start from being small to being large and complex. It is a reflection of the issues they are encountering at each step of development that they are in. Knowing where they are at this point will enable an organization to better undertake their Strategy Development in a most effective approach.

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Understanding The Importance of Organizational DNA: 10 Core Principles

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Organizations can change over the years. Change may happen because that is what the customers expect or it is because the organization gets to have even the most pic 1 Organizational DNA 10 Core Principlescoveted skills. Despite the changes, there are those that stay the same—the organization’s brand, its unique culture, and its shared lexicon. These are the underlying organizational and cultural design factors that define an organization’s personality. Metaphorically, these are called Organizational DNA. The Organizational DNA can indicate whether the organization is strong or weak in executing strategy.

Today, execution has come to a fore as organizations fail to effectively implement strategies. Organizations now realize that it must first resolve this dysfunction by understanding how the inherent traits of an organization influence and even determine each individual’s behavior. The idiosyncratic characteristics of an organization can be codified using the DNA. When the DNA of an organization is purely configured, unhealthy symptoms and counterproductive behaviors are demonstrated. High performing organizations have shown that there are precepts that they closely follow to ensure that their Organizational DNA is in order.

The 10 Principles of Organizational DNA

The 10 Principles of Organizational DNA are the precepts upon which high-performance companies are built on.

Let us take a look at 5 of the 10 Principles of Organizational DNA.

  1. Organizations always identify with 1 of 7 behavioral patterns regardless of industry and geography. Enterprise-wide behavior can either be passive-aggressive, overmanaged, outgrown, fits-and-starts, just-in-time, military-precision, or resilient. The complication here is that companies can face and conquer even the most pernicious performance problems by changing personalities. When this happens, it is crucial that the company must be ready for any problems that may arise as a result of the change in personality type. The inability to address these problems may be detrimental to the organization. Changing personality is not easy. It must be well-studied and strategically planned.
  1. Companies contain a mix of personalities. Business units fall under different archetypes, particularly in major acquisitions. At this stage, it is possible that a resilient organization may have a division that matches the fits-and-starts profile, characterized by smart entrepreneurial talent. However, despite that, it may lack the collective discipline necessary.
  1. There is a strong connection between personality type and strategy execution. In the survey conducted, 48% of the respondents fit a profile that is distinguished by weak execution. Passive-aggressive organizations may have people who pay lip service to results but they may consistently undermine some necessary efforts.
  1. Strong execution can be sustained. Organizations with a strong execution archetype cannot afford to be complacent. Leaders must continually seek feedback from the market, encourage and act on criticism from customers and frontline employees, and take action to address minor issues. These must be done before any problem gets bigger.
  1. The combination of building blocks determines the organization’s aptitude for execution. Organization DNA is made up of 4 building blocks. These are decision rights and norms, motivation and commitments, information and mindsets, and structure and networks. Complications may come in when companies decide to improve execution. At this point, building blocks must be considered and these must be considered as a whole and not individually.

The other 5 core principles of Organizational DNA are essentially necessary. Even the company with the most desirable profile, the resilient organization, must continually stay at the top of the game. Hence, it is essential that organizations must adopt the most appropriate behavioral pattern and personality to be able to build high-performance organizations. Strategy Development must be able to integrate into the organization’s Business Transformation the 10 core principles of Organizational DNA.

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The Power of the 5 Cost Management Strategies in Reducing Costs

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A commonly quoted statistic is that 80% to 95% of the cost of a product is determined by its design and is therefore set before the item enters manufacturing. This pic 1 5 Cost Management Strategiesassumption suggests that the dominant focus of Cost Management should be during Product Development and not during Manufacturing.

However, contrary to a widely held assumption, companies can integrate a variety of Cost Management techniques not only in the design phase but throughout the product life cycle.  This is to ensure that there is a substantial reduction in costs.  In fact, companies achieving Operational Excellence and competing aggressively on cost might consider the adoption of some form of an Integrated Cost Management Program that spans the entire product life cycle.

An organization must have a good understanding of Integrated Cost Management and the 5 Cost Management Strategies that they can use to reduce costs but still attain the desired level of functionality and quality at the target costs.

The 5 Cost Management Strategies

 The 5 Cost Management Strategies play a crucial role in the company’s integrated approach to Cost Management.

The 5 Cost Management Strategies can be applied throughout the product life cycle with one technique used during the product design and the rest during manufacturing.

  1. Target Costing. This is a technique applied during the design stage. Target Costing is best used when the manufacturing phase of the life cycle of a product is short.
  1. Product-specific Kaizen Costing. This is a technique applied during the early stages of the manufacturing phase. It enables the rapid redesign of a new product to correct for any cost overruns. The primary rule in Product-specific Kaizen Costing is that the product’s functionality and quality have to remain constant.
  1. General Kaizen Costing. The third Cost Management Strategy, this technique is applied during the manufacturing phase. It focuses on the way a product is manufactured with the assumption that the product’s design is already set.  This technique is effective when addressing manufacturing processes that are used across several product generations.
  1. Functional Group Management. This is the technique that is applied in the production process. Functional Group Management consists of breaking the production process into autonomous groups and treating each group as a profit instead of a cost center. The switch to profit as opposed to cost allows groups to increase the throughput of production processes even if changes result in higher costs. It enables the change in mindset that functional group management induces.
  1. Product Costing. The 5th Cost Management Strategy, this is the technique that coordinates the efforts of the other four techniques. It does coordination work by providing the other four techniques with important, up-to-date information.

Target Costing vis-a-vis Kaizen Costing

Kaizen Costing as known as continuous improvement costing.  It is a method of reducing managing costs. Kaizen Costing has a similarity with Target Costing but it also has its differences.  (Note: Kaizen is the Japanese term for Continuous Improvement and often tied to the philosophy of Lean Management.)

Both Kaizen Costing and Target Costing can achieve results with lower resources. This is basically their similarity. On the other hand, the differences lie in their usage and involvement.

Target Costing is used on the design stage and requires the involvement only of designers. On the other hand, Kaizen Costing is used during the manufacturing stage and requires high involvement of employees.  The general idea of Kaizen Costing is to determine target costs, design products, and process to not exceed those costs.

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