Evolving the team to match the organisation’s changing needs.
Organisations change in two ways. There is the constant incremental change of continuous improvement, and there is the stepped change required by a new strategy. The new strategy may be driven by external conditions, by new owners or backers, by the regular rhythm of the multi-year strategy cycle, or by all three. Whatever the reason for change, teams within the organisation must reorganise and reconfigure to meet the new demands placed upon them.
When undergoing change, whether incremental or stepped, an organisation faces several risks:
- Losing skills and experience, which, even if not needed for the new operating model, are needed in the short to medium term, while the new operating model is put in place.
- Confusing the organisation’s short to medium term skill and experience needs with what the enduring longer-term needs will be.
- Underestimating what can be achieved with the existing team, simply by reviewing and adjusting roles and responsibilities.
- Overestimating how easy it will be to find the right skills and experience for the organisation’s short to medium term requirements: often, this takes much longer than circumstances require.
What can be done to manage these risks?
We see several critical actions:
1. Mitigate the risk of losing skills and experience you need short to medium term by getting a reliable and realistic view of what members of the current team actually do and the role they play in the operating model.
This can be more complex than it seems. One phenomenon to be alert for is ‘functional dyads’: where two people are required to perform a crucial activity. One of us saw this in a large organisation whose Chief Operating Officer retired. Shortly after they made the former COO’s divisional financial controller redundant. The next annual budget round was bumpier than expected. In fact, the two executives had worked a functional dyad, with the quiet but very capable and shrewd controller following up and negotiating the adjustments to plans and budgets across the organisations that made previous budgeting rounds go smoothly.
2. Keep individuals who you need for the short to medium term motivated and engaged, even when their roles will not exist, or will change materially, in the longer term?
Any activity involving individuals requires that they are treated with respect. That includes letting them know what is planned and allowing them to respond, including making suggestions that might persuade you to change your initial plan. With open and mature conversations there is an opportunity to discuss whether someone wants to remain with the organisation, but in a new capacity, or, more likely at more senior levels, to agree a fixed period before they move on from their current role and out of the organisation. A respectful exit package that rewards a strong performer (in the current operating model) for supporting the transition, with milestone payments if appropriate, is almost always an option, and a cost effective one.
3. Review the skills the organisation will need on a permanent basis, and those which can be ‘rented’ for the current phase.
An organisation undergoing a huge transition, such as an IPO, will almost always require a different set of capabilities, usually at different levels of capacity and intensity, than business-as-usual. That means it will often be better to buy in expertise from external sources, including interims, than to create a role the shape of which will change once the transitional and transformational work is completed. The key skills required of roles will change post-transition. For example, the corporate finance expertise that an organisation may need for a major corporate event like an IPO will not necessarily be what they need post-listing.
4. Use the current team and their skills to the maximum.
New blood can be appealing: after all, if we’d had the right team would we be making the changes we now need to make? But the effectiveness of a team, at any level, is driven by more than the attributes of each individual member. It is a function of how tasks are split between the members of the team and how the team dynamics operate. Linking this to the last point: involving the current team and using their skills to the maximum during the transition is a smart and cost effective solution. And it may be that their skills and experience have a role to play in to the new post-transition operating model.
5. Get the right expertise in place to do the immediate tasks.
In any transition time is a factor, and there will be some activities that need to be done as soon as possible. Finding the right person to do these activities quickly, whilst also ensuring that that person is the right person for the post-transition operating model becomes a challenge. But the need to find the long term appointee, shouldn’t delay getting the right expertise in place to do the immediate tasks.
With thoughtful planning, having the right team in place through a transition, should be a straightforward and achievable objective.
This is the first of three articles on HR transformation. Rupert has also written articles on Augmentation and Integration.
