Stay focused on what matters (value)

5 guideposts to help keep “reorgs” on track

Stay focused

Posted by Robin Jones and Don Miller on July 22, 2014

Raise your hand if you’ve been involved in an organizational redesign at some point in your career, whether leading or participating in the effort. In fact, it’s not unusual for a shift in business strategy to trigger a corresponding shift in organizational structure. The idea is that the organization is reconfigured to enable and support the business strategy so it ultimately becomes reality and generates value for the business. However, we have all seen many instances where companies start down the path of an organizational redesign only to get sidetracked along the way or end up at a destination that doesn’t fulfill their expectations or needs.

What if you, as an HR leader, could offer your business colleagues a straightforward way to think about and guide their decisions about how to organize the business to generate value? Common missteps can be avoided by taking the time up front to frame the effort around five key areas that can generate business value — what we call “value dimensions.”

  1. Product/Service Utility — how useful customers find your products/services to be (their features, efficiency, performance, potential benefits).
  2. Customer Exchange — the money, time, and/or energy customers expend obtaining your products/services.
  3. Distribution Effectiveness — the way customers access your products/services, or how you distribute products/services to your customers.
  4. Financial Performance — the monetary value your business generates, measured in things like revenue, utilization, growth, cash, and stock price.
  5. Organizational Agility — your ability to grow, adapt, and evolve to sustain performance over time.

Figuring out early on which of these value dimensions you want to solve for or refresh gives you (1) a guidepost(s) to help you stay on the right path and (2) insight into how to translate that value into the actions, behaviors, processes, and capabilities of your workforce. This is particularly important, because whatever capabilities you’re trying to change or improve in the business ultimately trickle down to your front lines (or the most impactful workforce segment, such as your sales force), and how those people operate, behave, and drive the business strategy.

For example, say your goal is to improve your customer exchanges. You might develop a governance decision-making framework for who is collecting information about customer purchases or interactions, who’s analyzing the information, and who owns the task of improving the exchange.

The idea is to help leaders zero in on where they’re trying to create value by undertaking an organizational redesign, and then stay true to that goal as they work through the change.

The five value dimensions are the foundation of Deloitte’s Organizational Value Generator (OVG) approach — a values-based, analytics-driven framework for organizing a business for effective performance. You can see how the OVG works in our publication, Generating Sustainable Value Through Organization Design. While the document presents a particular industry (Technology, Media, and Telecommunications) perspective, the principles can be applied by anyone who is trying to realize the value of their business strategy.

We find the HR leaders we work with are frequently looking for ways to engage their business partners and assist them in meeting business objectives. Being able to offer the OVG approach to help them understand and frame the underlying issues in terms of value is a great place to start.

Robin Jones Robin Jones is a principal in the Human Capital Practice of Deloitte Consulting LLP, where she leads business change and organization transformation initiatives for technology, media, and telecommunications clients.
Don Miller Don Miller is a senior manager in the Organization Transformation Human Capital Practice of Deloitte Consulting LLP, where he focuses on helping media and telecommunications clients solve their top business challenges.

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