HR STRUCTURES
THE VOCAL WORKFORCE
Tanya Warnakulasuriya explains how to simplify HR structures and permit employees to take control
Picture this scenario… A sales manager of a large multinational organisation has a simple IT problem about which he calls the IT division at his branch. The IT people investigate it and inform him that while they could rectify the problem immediately, the manager would need to complete a ‘global service request’ form.
This form then needs to be authorised by the head of the division, which will take more than 24 hours as he’s at meetings all day. Once that authorisation is completed, further approval is required from the country head and head of IT.
Completing these steps could take a total of three days; and that’s three days of lost sales for the company! This could have been avoided if the branch’s IT person was allowed to rectify the issue immediately.
Is this an efficient way of working?
If you have worked in internal audit or for a global IT division, you may insist that such layers of protocol are essential to avoid the abuse of systems and unauthorised use of company property. The fact is that the collective cost of wasted time and productivity, which are the result of overly bureaucratic processes, far outweigh the savings that accrue from fraud or the prevention of unauthorised use of company resources.
It is a painful fact that as many companies grow and expand, they develop increasingly complex and overly layered operating structures. We’re told that these are designed to make operations more agile in what is a rapidly changing business environment, but they do the opposite in reality.
Most workforces find themselves stripped of power and responsibility as more reporting layers are installed between them and the board. As a company expands, decision-making becomes more centralised with managers attempting to justify their existence and retain control.
Such centralised structures result in severe bottlenecks of knowledge as key management information struggles to reach workers, and vital production and customer information is then slow in being passed back to the central decision-makers. There are simply too many layers in-between and essential business information becomes lost in translation.
So does your company have too many layers?
Try this simple test…
Go to your factory floor, customer service desk or local branch sales assistants and ask them to tell you what your company’s vision and corporate values are. It is virtually guaranteed that at least eight out of 10 companies will find that their ‘ground staff’ wouldn’t know these.
The concept of lean organisations and thinking that was developed by Toyota in the 1970s seems to be outdated. Yet, its key tenets are still valid. Ensuring that all activities can be correlated to adding value to the customer is still important, and being able to eliminate non-value activities – as well as reduce waste and inefficiency – is still essential to business survival.
However, if you were to ask most support divisions why they do what they do and how their activities directly benefit the organisation’s customers, most would struggle to offer an answer. One reason for this is because no one really questions new protocols and procedures that are put in place. At best, protocols are piloted and tested before they’re rolled out but very little notice is taken of the results or outcomes.
Having followed the painful process of introducing and embedding a new procedure, what happens if it is found that it doesn’t work?
No one is held accountable. A band-aid solution is quickly found, which usually involves… you guessed it, more new processes and procedures!
Jon Husband’s Wirearchy Management Framework offers four key pillars that need to be upheld in an organisation, no matter how complex its structure is. They are the seamless flow of knowledge, trust between all levels of the organisation, credibility and a focus on results-based operations. For these pillars to be upheld, companies must encourage three rules of thumb.
First, workers should ‘work out loud.’ In other words, they should be able to narrate their work – tell the story of what they do and why they do it. This is incredibly empowering for the employee and workers understand how they play a part in the overall structure of the company by having these conversations with each other.
Secondly, critical thinking is key. All employees can develop their personal learning systems when they have the right to question the systems and procedures that have been established. Without blindly following and resenting processes, a vocal workforce can provide valuable feedback.
And finally, there must be proper distribution of authority among employees. If a business places trust in its workers and offers them the authority that is required for their roles, most will rise to the challenge and act responsibly to honour and protect the company’s values.
Netflix CEO Wilmot Reed Hastings Jr. says that his company prides itself on high-performance staff and not management layers. As it grows, he will simply add more high-performance staff… not more layers.
There is a notion with senior management that in an IT system transfer, employees should support it by working to the tune of the system. In a productive and practical set up, there should be coordination with the system and the employees. Such loopholes are to be cleared prior to simplifying structures for empowering employees with more authority.
Let’s take a deeper look at the three rules of thumb, for a meaningful and pragmatic perspective.
First, we may have to keep aside distribution of authority, for the sake of the golden rule of ‘delegation of authority,’ standards of internal audit and organisational policies that are woven around it, which makes it hard to bend or break such rules.
If an organisation’s culture and management outlook seem to be unconducive and fair on employee voicing, and is not receptive to employee suggestions and comments, employees would also inevitably adopt a defensive approach.
Those are the companies that voice out the ‘do it yourself’ (DIY) culture and the ‘you suggest it, then you do it’ culture. So employees get the fear of, ‘if I suggest then I have to shoulder it.’ This blocks the free flow of authentic ideas within the workforce. So organisations are losing since employees’ critical thinking and feedback are restricted from materialising into productive outcomes.
Another point is that some job roles are made up of junk elements that include over processing of information (which is a waste) and generation of reports as a routine which are never even looked at or referred by the management. In such a backdrop, an employee is bound to get lost when narrating his or her role in terms of value addition.
We may accept that the arguments for eliminating layers and empowering employees. But what if we are unable to embrace the assumptions and rules that are linked to its implementation?
There are the organisations that constantly talk, urging middle and lower level employees to eliminate non-value adding activities and minimise waste to enhance efficiency. Thus, thin profit margins are overly concentrated, failing to see that the management is not eliminating waste at the right point where substantial costs are actually generated. As such, companies see the benefit of reducing paper costs, and do not see the escalating cost of higher pay and perks which occur when each new layer is added – a case of seeing the ant and not the elephant.
These are the very organisations where a top person is added to almost every business or service unit, when the CEO or General Manager changes. These are the organisations that aim to grow large and strong, by appointing a new layer. The reason for their decision seems like a blind adoption of a strong assumption that happens to be fragile or baseless. Perhaps as a modus operandi, new corporate management may think that adding layers is like a makeover or face-lift to boost corporate image.
When a tall structure is made taller, reporting lines, authority lines and approval times all tend to lengthen and be ambiguous and complicated. The middle and lower level staff would also feel a psychological blow when they have to climb a much taller career ladder and their career advancement is slowed down.
These employees are deprived of core work and the skills and traits connected with it, which if given would make them shine.
There is lot of subjectivity in terms of the four pillars of success.
The most difficult item in the list is trust across all levels of the organisation. In countries like Japan, people are honest and loyal to the employer and trust is not a bottleneck. Employees may be in the good books of others but that is not an indication of the level of trust. There are top officers who do not blow the horn, who keep mum and remain in comfort zones even if they smell danger in advance. Such officers always carry the ‘good’ label. On the other hand, a handful of managers speak up, and may be subject to prejudice if they do not satisfy the expectations of the corporate management.
When trust seems shaky, credibility does not take off in full scale. Loyalty and commitment towards results-based operations can make credibility increase. When responsibility is taken for the sake of formal procedures and authority, the focus towards efficiency tends to suffer. There is a high probability that employees will tick off a check list, but will not focus on attention to detail and subtle aspects that can make a significant impact on the final results and operations.