Thursday 31 October 2019

Designing the Organisation and Enterprise Architecture

I presented on designing a customer driven, process based, flat / horizontal organisation at IRMUK's business process and enterprise architecture conference this month.

It was a great event and I learnt a lot about enterprise archirecture as well as checking my understanding of business process design.

I tried to take account of some of these learnings too, broadening out the presentation to include the use of new enterprise architecture opportunities to develop a digital organisation too.

I'm not completely sure I've got this right and will be reflecting more on it over the next few months, and posting again once I've come to some firmer conclusions.

Jon Ingham

Friday 18 October 2019

Leading and managing the MOE

This is my fourth and final post on Arthur Yeung and Dave Ulrich’s new book, Reinventing the Organization. I’ve already dealt with Dave’s new organisational logic, the features of a Market Oriented Ecosystem (MOE) and the process for creating a MOE. The rest of the book deals with the consequences of choosing a MOE option.

The HR aspects of the model are dealt with by the book under the governance heading. Personally, I think these aspects provide more than just governance of the structure - many of them are actually a central part of the organisation form. Culture, in particular, is a key aspect of the ecosystem platform.

Arthur and Dave suggest HR activities will need to be tailored to a MOE and I agree. I actually think that we may need to do more tailoring than he or the case studies suggest. Eg Supercell is heavily focused on teams but they still believe “that one exceptional person equals a hundred ordinary people”. Perhaps it depends on what they mean by exceptional, but they certainly would benefit from recruiting people who can fit well within their teams (which many individualistic superstars often struggle to do). I make more suggestions about this in The Social Organization (TSO).

I’d also have liked to read more about the complexities involved in designing a non-MOE / more distributed ecosystem. These include, for example, how to bring partners with different capabilities together to support the overall capabilities of the ecosystem, and how to handle organisations with different cultures. However, in a MOE these difficulties are largely stripped out by the platform.

There are also some good suggestions on leadership, eg I agree that leadership in an ecosystem needs to be much more distributed than in a traditional organisation. But it’s interesting that they single out Lee Kuan Yew as a leader who ensures accountability. And I can see that this type of authoritarian leader might work well in a centralised MOE. Other more distributed ecosystems will need leaders who are much more consultative and democratic than this.

I also think Arthur and Dave begin an interesting point when they suggest that different types of leaders are required by the platform from the cells. Actually, for me, this is about the network and the cells - the platform needs designing and maintaining, but not leading, as opposed to the people and the network between the people which exists on or uses the platform.

And I think in many MOEs and other ecosystems and organisations, we’re going to need even more different types of leaders, including of networks and cells / horizontal teams, and also of communities and as is most commonly the case currently, of individuals working within functions. However, I do disagree that this should have anything to do with age.

I also think that in many cases, it’s going to be the same people working in various combinations of these different roles. So it may be that they are staffed by different people, but it may also be that the same people need to act differently in different capacities, eg when leading horizontal teams as opposed to when they’re leading communities.

Eg one of my recent posts discussed the challenges faced by people moving between project management and project member positions. I think if we’re asking people to shift between team leadership, network leadership, partner leadership and other roles the challenges are going to be much bigger than this.

I may focus on this agenda in my next book…

Also, I sent Dave a copy of the series before posting them, and he sent me this response which you may be interested in too:

"Response to Jon Ingram

Let me begin my response to Jon’s comments with an apology and a thanks.  In our book Reinventing the Organization we wanted to build on and synthesize previous literature on innovating organizations.  We included 12 initiatives to rethink elements of organizations (network, ambidextrous, post hierarchy, holocracy, agile, ameba, team of teams, etc).  Clearly, we did not include all of these studies, and we missed Jon’s “outstanding” (from my foreword) book The Social Organization.  This was my mistake and we should have included a discussion of his work on platforms which is another piece of the broader market oriented ecosystem (MOE) logic we proposed. 

Our goal was not to just do a book on “organization redesign” (or other elements of reinvention) with a focus on platforms and capabilities (2 chapters in book) but to cover the entire organization reinvention logic, including environment, strategy, integrated governance mechanisms, and leadership  (13 chapters).  So, I apologize to Jon for not including his organization design work.  I am sure we missed insights on elements of the reinvented organization as well (as Jon points out).  Again, we see most of the insights Jon points out are elements of the overall organization reinvention logic. I also want to thank Jon for his insights on organization design. 

Jon disagrees with some of our logic, which is fine.  We like to see pivots from one organization logic to another (hierarchy to systems to capability to market oriented ecosystem).  This means that MOE builds on these previous logic, but evolves them.  We did not make this clear and some organizations still operate as hierarchies, systems, or internal capabilities.  But, in an increasingly turbulent environment (chapter 2) and with strategic agility (chapter 3), the MOE organization offers a new logic of organizing. 

There is a good debate about starting organization change from the inside (my book Organization Capability had a subtitle, “competing from the inside out”) to leverage core competencies versus starting from the outside (our book HR from the Outside in) to anticipate and respond to external changes.  In some ways where organization change starts (inside or outside) is less relevant than the 2 are connected. 

Jon dives deep into the role of platforms.  We would agree that the role of platforms in supporting cells is evolving.  Platforms offer support through technology, common enterprise-wide values, shared learning about building capabilities, and creation and distribution of new processes. 

I am/we (arthur and I) are open to debate as this organization reinvention emerges.  One of my concerns with Jon’s comments is that he keeps talking about “Dave” when these ideas are clearly drawn from exceptional work by Arthur Yeung, the first author on this book and originator of most of the ideas.  He has trained many of the leaders of Chinese companies (including Haier) and has been granted first hand access to the ideas he shaped and companies have implemented in our case studies."  

I told Dave there was no need to apologise, and I wasn’t trying to make a thing of  the connections between our books. This blog is a personalised narrative on what I see happening around me, but also on what I’m doing. And therefore a lot of my posts are commenting from a fairly egocentric perspective. Two years after my book, that still often means commenting on, and making links back to that. So I see and have described how the books has advanced thinking from TSO, but I wouldn’t expect Dave to refer to it. (And he's already been very generous in  shout outs at various conferences around the world too.)

And Dave was right about Arthur of course (not saying he was wrong about everything else) and I've tried to give Arthur a stronger billing, at least in the last three posts.

There's also this comment from Dave on his HR Magazine article:

"Jon has done and will continue to do exceptional work. It is a legitimate and great debate to do work from the inside/out or outside/in. My first book Organization Capability (1990) was subtitled, "competing from the inside out" and built on CK Prahalad's idea of leveraging your core competences. More recently, we have focused more outside in (HR Value Proposition; HR From the Outside In). Hopefully, where ever one starts (inside or outside), they create a virtuous cycle (actually spiral) to both win in the marketplace with customers and investors and in he work place with individual competencies and organization capabilities. Jon's note that not all organizations should be MOE's is a very nice addition we should have acknowledged."

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Thursday 17 October 2019

#HRcoreAcademy Day 1 / Social Talent

I’ve been presenting on Social Talent in the Talent Trends room at Teneo’s HR Core Academy in Amsterdam.

Tom Haak opened the day presenting his  ten top trends for talent management. My suggestion was that shifting from human to social talent (or human plus social talent) needs to be one of those trends.

Work is increasingly specialised. Yes, I know there are calls for polymaths, neo-generalists and even just general generalists (“Generalists are going to Rule the World”) but just look at the variety of job titles in this slide from Tom and Cyriel Kortleven - talk about specialism! ('The Head of All Things Awesome' would do as a catch-all title though).

At the same time, work is becoming more complex and to deal with today's complex, multi disciplinary challenges we need to bring specialists together into teams, groups and networks. Everyone in my session seemed to agree that they spend too much time in meetings. And most raised their hands when I asked which of their organisations compete mainly on social vs human capital.

So why is it that most organisations still focus on managing, measuring, developing and rewarding the performance of individuals rather than doing this for teams?

My suggestion for dealing with this was to focus on organisation design, social HR processes, social talent and leadership / organisation development.

Social organisation design

Moving to a social way of organising starts with getting the organisation design right. It’s difficult to develop the right relationships if people are trying to do something which their job designs don’t enable them to do. For me, that's mainly about building on existing functions to use horizontal teams, communities and networks.

Virginia Bastian, HRD for Germany at Nestle used the Star model to explain the need for organisation design to extend beyond the structure. I think that's an important point although I prefer the McKinsey 7S or even better, my own Organisation Prioritisation Model (OPM) which I think is more useful as it includes a broader range of organisational elements which also need to be aligned with the rest of the organisation today (eg the digital and physical workplace).

And I loved what Nestle have been doing in HR. Firstly, they still have a mainly functional organisation, although innovated to link global, regional and in-country levels, and adding an operational group to Ulrich’s COEs, shared service and HRBPs.

However, the work they do is now focused on an overall Hire to Retire process, one of Nestle’s core end-to-end flows (slide from a different presentation).

Virginia’s own core team of six people work on projects related to improving this process flow. The major steps in the process are then headed from the COEs.

But they’re also looking at using communities and networks (or "community networks"). For example, HR realised they had limited expertise in organisation design and so got people together from change management, BPs, L&D etc to share tools and methodologies, get feeedback and co-create and then share knowledge.

Also, they are looking at building a fluid, ‘plasma’ organisation in Nestle Vietnam! I look forward to finding out more about that.

I didn’t get to explain but all the elements of the organisation (see my OPM again) need to relate to the organisational groups which are used, eg see this presentation on organisation design and the digital workplace (see my slides and my blog post on this).

Social HR processes

We also need to look at how we innovate all our HR processes across the full employment life cycle to focus on building social capital. This is firstly about recruiting, managing and developing people to fit within the teams, groups and networks they are going to participate in, eg by having the team, not just the team manager, recruit new people into the team.

And secondly, it is about managing, measuring, developing and rewarding the performance of teams, other groups and networks, rather than just doing this for individual employees.

I spoke about this in my session on social performance management at Teneo’s HR Core Lab five years ago (see my slides and my blog post on this).

In that session I also talked about the benefits of a social HR approach, including that it focuses on social capital which is more valuable than human capital, so it provides maybe twice the value. It also tends to develop both social capital and human capital, together, so that’s three times the value. And it also anchors the process / approach in the culture, which is particularly true for performance management - one of the reasons this process traditionally doesn’t work is that it’s done in semi secret between an employee and their line manager. In social performance management, this is much more open and ongoing, so it makes it feel like more of a thing. So perhaps four times the value of traditional HR?

Social talent

The room I was speaking in was focusing on talent trends so I wanted to talk about social talent too, ie the important role of connectors and brokers.

So it was interesting that my session was followed by one from Jamie Ward at the BBC talking about their learnings from the way the BBC deals with celebrity talent.

This still focuses very clearly on individual creative superstars (and the group from the BBC all put their hands up in my session to suggest they think human capital is still more important than social capital in their organisation): “Everyone has talent but only a few people who can make the difference for your organisation.”

I think many of the potential learnings from looking at celebrity talent are already happening. Eg “Creative industries are on the look out for talent all the time” is just sourcing / talent pipelining / head farming.  “If we find talent with something to give, we create a role for them” is job sculpting / crafting.

But some of the suggestions haven't been learnt, and these do need to be part of a social talent approach, eg: “Giving talent a hug - we look after them through fallow times.”

I strongly believe in best fit rather than best practice and therefore that every organisation should decide what its own ideology, principles and strategy are going to be. However, I remain unconvinced that the BBC’s strategy is the right one for them. Look at the way the number of writers of a hit song has increased. I don’t see why writing and producing a hit TV programme should be any different from this. There is something different about on-screen talent, but then I think the BBC in particular needs to be in the business of developing potential rather than competing for those already seen as talent, and paying through the nose to get them - something they get plenty of criticism for.

That applies to organisational talent management too - we’d be much better not focusing so much on recruiting and rewarding talented superstars who are already in high demand, and focusing more on creating more effective organisations and talented teams.

Social leadership

Leadership needs to move to being more about leading from within rather than leading from above. It needs to extend to leading groups rather than just individuals, and it needs to change according to the particular type of group - see this blog post for more on this.

In addition, everyone needs to lead, so organisation development approaches like WOL are leadership development interventions too.

Laura Krsnik from Merck talked about their WOL initiative, or ‘movement’ in the other room, focusing on L&D 4.0. This was about "building relationships that matter".

As well as WOL being a social intervention, Merck have also been building a WOL core community consisting of 30 to 40 Wolers who are intrinsically motivated to support the movement. Some of these are mentors who are taking on a particular effort as a mentor, helping to spread WOL into the rest of the organisation. These people can also act as ambassadors attending alumni events etc.

WOL is now being incorporated as a core element in management development programmes, helping to generate better behaviours around generosity etc. (Importantly, it's not the cure for everything however.)

I thought Laura provided an interesting story and agree that WOL and similar developments can often grow bottom-up. However I disagree that they can’t start at the top. Or the fact that they can’t is an individuation that we have the wrong leaders in place now.

That was it and  I hope I (together with the other speakers who illustrated my suggestions so nicely) covered off Tom’s six tests for talent initiatives:

  • Personalisation - yes, that's the focus of networks in particular (though I think there's a linked need for personalisation to the group - groupisation?)
  • Employee focus - communities
  • Speed - horizontal teams
  • Analytics - eg ONA / SNA which I talked about in the section on social talent
  • HR technology - social / digital networks which I meant to talk about in the section on organisation design
  • Open and connected - that's the whole point of social organisation.

I'll post on day 2 soon. 

Picture credits: Sally Brand, Cyriel Kortleven

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Tuesday 15 October 2019

Competitive People Strategy

Perhaps the most interesting article in this month’s HR magazine (other than my own Different Slant of course) is this one on Helmut Schuster at BP.

I love a lot of the suggestions, including the idea about HR creating / catalysing an ecosystem.

However, "HR professionals need to be businesspeople first who just so happen to look after the people agenda." hugely undervalues what HR can provide. Schuster (whose background is from outside HR) is absolutely correct in suggesting that two brains are better than one, so what's the point in us echoing the same thinking as everyone else in the rest of our businesses?

But the point I most object to is Schuster’s suggestion that:

“Don’t whatever you do talk about ‘people strategies’. I hate this phrase as much as I hate the word ‘HR’. What you need to have is a corporate strategy. The people part of it is simply the people agenda. Now get on with it.”

Ah yes, because people are simply a part of the business and managing them is totally simple too. NO! - it’s not true. But if people believe in this then I can see how they might want to fill HR with businesspeople first people, ideally ones from the rest of the business. In fact, why bother having HR at all? (a question which some organisations are asking, but which again shows a lack of understanding about the value HR can add.)

There’s a lot of this attitude around unfortunately. Eg I was really interested in reading Kevin Green’s new book ‘Competitive People Strategy’. And I’m not going to be too hard on this book, as it does reference my first book, ‘Strategic Human Capital Management’, so it’s obviously brilliant! But it does fall into the same trap as Helmut Schuster.

That’s because the book explains the basis for business strategy and presents models like MichaelPorter’s Five Forces, the Boston Consulting Matrix, and Kaplan and Norton’s Strategy Maps. And it does review the key role of organisational capabilities. But it doesn’t explain the role of these capabilities in the organisation strategy maps (see my interview with Porter for an explanation of this) or the opportunity for creating value.

And although the chapters on HR and leadership opportunities are very interesting they are presented as best practices to support inimitable business strategies. There’s nothing on the need for inimitable, best fit people and organisation strategies. And there are no tools for developing organisation strategy which are equivalent to the tools listed for developing business strategy.

Basically, it deals with ‘people support activities’ linked to corporate strategy. That’s fine, and we do need to perform these activities, but it’s not how we act strategically, or as Schuster claims, to “drive business strategy”.

Karen Beaven's book Strategic Human Resource Management takes a similar approach. This book refers to my second boook, The Social Organization, so it's obviously brilliant too. And it is more people centric than Kevin's book, and there are some great case examples from Karen's own experience at River Island in it, but again most of the models etc focus on competitor analysis, PESTEL analysis, etc, rather than getting to understand people.

(And what GDPR has to do with being strategic I've no idea.)

Josh Bersin is absolutely right that HR's new job is about making work more human (though this need isn't that new - as it was the focus of 'Strategic Human Capital Management' back in 2007, and of this blog since then as well.

But that's not just about ensuring conversations about human values are part of our conversations about the rest of the business. It's also having conversations about creating new business potential from these people values.

It's about real competitive people strategy. Not just supporting the business strategy and their use of business models, but our development and effective implementation of "people strategies", using organisation models to support this strategising.

So if you want to know how to create strategic value through people:

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Tuesday 8 October 2019

Creating a Market Oriented Ecosystem (MOE)

This is my third post on Arthur Yeung and Dave Ulrich’s new book, Reinventing the Organization.

My insights in my last two MOE related posts do create a few issues with Arthur and Dave’s suggested framework or process for designing a Market Oriented Organisation (MOE) which is shown above. (But please note that my posts always criticise rather than endorse, particularly as I use my blog to develop my own thinking, and therefore tend to focus on things I disagree with, or don’t understand, in order to work out what I do believe for myself. So like most of my reviews, this one will read more negatively than it should. Reinventing the Organization a great book, and if you’re interested in new opportunities in organisations reinvention, you should definitely read it.)

I think the first issue arises from studying three digital companies in Silicon Valley and four near equivalents in China (as well as Supercell). There’s a definite opportunity to use network effects to gain a monopolistic advantage in digital technology and the use of digital platforms lie at the heart of these easily scalable exponential organisations. But is that what we really want to recommend? Becoming a monopoly is a sensible commercial objective but it’s not going to provide a wonderful result for the global economy or society as a whole.

A second issue results from extrapolating the above examples to various other sectors and geographies. The extended, non-digital model will still work best for companies with lots of similar operations, eg retail stores like Walgreens. Platforms work best for relatively simple work which can be divided into tasks rather than more complex work which needs to pull people together into organisations. IT is a great example of this of course, which is why digital platforms work best of all.

Network effects also doesn’t work in the quite the same way outside technology. Competitive advantage is not going to automatically follow a MOE strategy, especially if a company’s competitors are also developing as MOEs. Where network effects don’t apply, more boringly traditional competitive advantage comes from choice and differentiation.

Plus there’s not that much room for that many ecosystems to exist. And even if ecosystems become the prevailing economic model, most companies are going to be ecosystem participants rather than orchestrators. There’s going to be a lot of wasted effort if every company now starts to develop their own ecosystem from scratch.

And there is still lots of valid choice:
  • Eg, I still think internal ecosystems can provide a lot of the benefits of their multi-organisation counterparts.
  • Or there are other options for developing more decentralised ecosystems that don’t depend on a platform, or where the orchestrator’s platform is a basis for a distributed ecosystem, but where the orchestrator doesn’t play a role in the ecosystem itself .
  • Or perhaps for becoming a blockchain based digital autonomous organisation (DAO) which if some predictions become true could blow the platform based organisation apart.
  • Or in lots of areas, hierarchical functional organisations can still rule!

For all these reasons, I think an evolved organisation design process needs to enable an organisation to choose the form it should take, rather than starting from the premise that it needs to be a MOE. So, for me, the sequence in any OD framework should read as something like:
  • Environment - all sectors and geographies are different - what is going on that your organisation needs to respond to, and if possible, inform? (“Create the future by anticipating what the market will be”)
  • Strategy and capability - these should both go together still for me. The capabilities need to support the strategy, but ideally needs to inform it too. Eg if you are, or are going to be a MOE, then your existing capabilities will indicate whether you are likely to be most successful as a creative, technology based or efficiency oriented one. This also provides the opportunity for creating value (“Strategy follows people”).
  • These then impact the nature of the potential ecosystem, and of the systems and structure of the ecosystem and your particular organisation.

It’s the selection of the right capabilities and principles, linked to the environment and strategy, which provides basis for choice in organisation design as well as the opportunity for more traditional competitive advantage. And information, customer, innovation and agility are clearly going to be useful capabilities but they may not be the right capabilities for your organisation. (Just as Amazon actually focuses on customer obsession, Tencent on user experience and Google on technology based innovation.)

In addition, these are all capabilities required by the ecosystem rather than capabilities required by the organisations participating in an ecosystem. I’d actually suggest the main capability required by any participant, including the orchestrator, is likely to be cooperation and collaboration. These are partly provided and automated by the platform, but they also always needs to be embedded in the people and their relationships, which is why I focus on social capital in The Social Organization (TSO).

Collaboration and other more human centred capabilities also have an important advantage alongside market orientation or other work based capabilities. Innovation doesn’t just originate through better alignment with external opportunities - it also comes from developing the inherent potential of people working for the business. Together with the two-way links between the environment and the strategy, and the strategy and capability, this also helps the MOE to create value.

For example, another type of ecosystem (perhaps not a market oriented one, and perhaps not even one operating a very technologically based platform) might include communities alongside horizontal teams in order to build relationships and insights and support the people involved.

However, even with these changes I still worry slightly that this MOE creation process looks a bit like strategic planning, whereas Arthur and Dave suggests MOEs need to develop strategic agility instead. I agree, although actually, I think strategic planning can still be performed within organisations, as long as it’s done at a high enough level and with a sufficiently inclusive approach. But I don’t think this will work for a whole ecosystem. Developing this has to be an incremental and emergent approach.

This is about making external connections with other organisations which might become partners later even if you can’t see exactly how. And it’s about preparing your own organisation to be more open to working with others, and more cellular and platform based internally too (through the use of horizontal teams, communities and networks, as in TSO). So designing your organisation and designing potential interfaces with other organisations rather than designing the whole ecosystem. I still think this fits with Arthur and Dave’s suggestion to “see the whole, but get started on only part of the transformation” too. And it works for any organisation, regardless of whether you want to, or are able to become the ecosystem orchestrator or not.

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Monday 7 October 2019

HR Magazine Different Slant: Modern Organisation Models

It was great being recognised as one of HR Magazine's Movers and Shakers last month (and being included on the cover this month - can you spot me? - and how many other influencers can you name???).

However, it's even more brilliant to have my thoughts on modern, people-centric organisation models included this month too. These summarise some of my insights from chapters 6 and 7 of 'The Social Organization', as well as providing a few slight updates on platform and blockchain based organisations too.

The full magazine is available to view or download here (you'll find my Different Slant article on pages 36-8).

And if you read it (and you should), do let me know what you think.

I'll also be publishing some more thoughts (somewhere between the high level review in the HR Magazine article and the detailed treatment in my book) on Linkedin - do check and follow / connect with me there too.

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Sunday 6 October 2019

IntranetNow: Insights from Strategic Organisation Design

I presented at Intranet Now on Friday. It was my first time at this event and I thought Wedge and Lisa did an amazing job - not only was the event as social as you'd expect a community generated conference to be, it was also more professionally organised than many professional ones. Well done both, and to all the helpers too.

In my own presentation, I wanted to make the same sorts of points I talked about at Digital Workplace Experience last year that the intranet / digital workplace needs to be seen as part of a broader organisation model.

Tony Stewart's tweet and video of me introducing my Organisation Prioritisation Model is here, and no, I don't know what I was doing with my arms either.

In addition, this year's conference focused on strategic impact and whilst we'd been talking about intranet strategies and content strategies, etc, I wanted to explain that having strategies isn't the same as being strategic. If this term is to mean anything, then it has to be about playing a direct role in creating competitive advantage (see my interview with Michael Porter). Not just aligned with or supporting this, but creating some of it through the intranet's indirect or direct impact on human or social capital, or acting as an aspect of organisation capital, helping a business set new or more stretching business goals.

Being strategic is always about differentiation and the key need here is to link the intranet; the connections it supports;  the type of information it provides; and the way it provides this to the way people work, and in particular, the type of groups and networks within the organisation.

  • So if what matters most is the organisational infrastructure, then the organisation probably wants to organise using traditional functions, and will be best of with a traditional / social intranet like Interact.
  • If what matters is the work, it should probably use horizontal teams, and may need to base or build its digital workplace around something like Slack or Teams.
  • If the connections between the people, then it needs to look at distributed networks and tools like Yammer, Aurea / Jive or HCL Connections.

By the way, social tools all get a lot of focus these days, but most organisations are still build upon traditional functions, and it's still the 'standard' intranet that often best fits the way people work in these organisations.

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