Three Investments that Deliver Organisational Effectiveness

In the eighth show in this current series of B I G Insights on the Business Bunker we explored “The Systemiser”, one of the ten characteristics uncovered by the University of Kent’s Business School that challenge us to reflect on how we, as leaders, approach growth and performance.

Our research reveals that those SMEs that develop effective ways for people to deliver their products/services outperform the competition. This is because the development of people systems allows work to be delivered at the right level of quality, on time, and within budget.

As we debated how best to explore this characteristic we uncovered two distinct, yet related issues; that of managing ‘people’ and managing ‘process’. As a consequence, we decided to split the exploration of this characteristic in two. In this blog we were joined by Len Nanjad to explore the managing ‘people’ aspect of The Systemiser. Len had a story to share, and a unique perspective on this issue as a respected practitioner in organisational design helping leaders gain clarity on the way they organise work.

The secret is in the people ‘system’

Len’s philosophy is that the route to better results is through understanding the whole people system. That is, the tasks to be delivered, the roles to be performed, and the selection, and management of people capability to perform.

Len reveals, “Leaders that we have spoken with are trying a lot of the things that may address behaviour, culture, management skill, talent management, and performance management. Yet they are still concerned about engagement and productivity. Trust and engagement come from achieving or exceeding goals together – people want to be on a winning team, and know they are part of that result. And that, in itself, leads to better results”.

Growth brings greater levels of complexity

As organisations grow and develop we add in new people. Depending on how we integrate these new roles and people to our existing systems, growth will always bring a greater level of complexity, which results in increased costs (Wilson and Perumal, 2010). If we are not clear however, on how new roles interact and integrate with the existing people system the delivery of work can quickly become messy and hard to manage.

Len comments, “In such situations, as a leader of the business, our time can become focused on managing an unwieldy system and solving, what can often feel like, an endless list of people and systemic issues. This can, in turn, lead us down an operational alley, fighting to find time away from solving day-to-day issues, so that we can turn our attention to the all-important bigger picture and strategic goals we are trying to achieve. More often than not, our experience of systems of managing people can undermine the trust we have in our staff and in their ability to deliver”.

This debate led us to ask the question: what is it in my working system that creates the conditions for trust and better results? Out of this debate, three steps emerged.

1.Map what work needs to get done to develop role clarity

The tasks that are performed in small organisations and teams can often develop over a significant period of time, since formation. There can be an unspoken and unwritten agreement amongst staff about that is the ‘right’ thing to do, what is expected in a given situation.

This level of informality may work whilst people systems are relatively small, however Len recommends, “At the core of any people management system is understanding what tasks and activities need to be delivered to satisfy your strategic goals. Once you know these tasks, you can group them into roles that will need to be performed, with clarity around decision making authority; who has the autocratic right to say ‘yes’, ‘no’, to recommend or to veto? This allows leaders to refine the people system to ensure it delivers the strategy”.

2.Understand the capabilities of your people to deliver

How many of us really know what our people are capable of? Beyond task-based knowledge, and basic cognitive abilities, it is well recognized that people need to understand the purpose and strategy of an organisation, have resonance with others and have an understanding of the system within which they operate. For staff to only understand their own little piece in the puzzle is not helpful; understanding how the whole system works allows any member of staff to propose and see through changes.

As Len states, “When labour is cheap, and your products/services are in demand, you can hire more ‘horsepower’ to deliver, no matter how inefficient your systems are. However, the world is a different place to what it was. You now need to select those with the right capabilities to deliver. If you don’t you risk increasing the cost of recruitment and selection exponentially, potentially 1.4 times the salary of the role (American Management Association) or even TEN TIMES that for certain positions (California Strategic HR Partnership)”.

3.Manage the system

It might sound rather obvious, but this requires us, as leaders of our organisations, to move from working “in” the business to “on” the business. Len highlights, “We need to transition from managing tasks and process to designing and managing systems of people and processes. This requires a different mindset, and capabilities that many of us have not fully developed”.

Len describes this as a ‘three tier structure’, “Making sure there are clear accountabilities two layers down is a vital management practice. And vice versa for employees with their managers two levels up. Everyone in the system needs to be clear of what is expected of one another. This is not ‘extra’ HR stuff to comply with and add to your workload, it is a central part of the job of leaders and management”.

Len concludes, “Overall, engagement and productivity is about improving your complex, adaptive human system. To do that, clarify the roles and their complexity, understand your people’s capability to handle complexity, and bake talent management accountabilities into roles two-levels up and down. These three things are simple and, though not easy, readily accomplished. They provide proven returns on your investments in organisational effectiveness. Most importantly, they increase the certainty that your organisational design will deliver your business plan, and reduce the risk that you won’t.

Make a Difference (MAD) challenge

We like to challenge the readers of our blogs to reflect on the impact that the content has had on them, and to question their own approach. In reading this blog, we invite you to reflect on the following questions:

  • What is your current/future strategic direction, and how is this influencing the way you manage people?
  • How would you rate the level of trust you have in your people, and they have in you?
  • What are the activities that need to get done in your organisation in order to deliver your products/services with quality, on time, and within budget?
  • How do you know that the people in your team/organisation understand the ‘system’ they operate in? What evidence do you have of this?
  • How do you manage the assignment of roles, and how they are performed across your team/organisation?

To listen to the live show again click here

Click here for further information on the collaboration between the Kent Business School and the Business Bunker Radio Show. Should you have any questions in regard to this piece of the wider work please do not hesitate to get in touch with Dr Simon Raby S.O.Raby@kent.ac.uk or Paul Andrews businessbunker@yahoo.co.uk

References

Wilson, S. and Perumal, A. 2010. A Fresh Take on Complexity Costs: Six Principles for Waging War on an Intractable Issue. American Management Association.

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