This article is the first in a three-part series on applying systems diagnostics to understand the sources of organizational underperformance (this article) why transformations often fail to deliver (Designing transformations to avoid failure), and how to keep transformations from going off course (Diagnosing and adjusting transformations to ensure success). It is based in part on my Strategic Analytics book. The issues addressed in the series will be covered in depth in the upcoming virtual workshop Driving Organizational Change with Data.
When challenges with strategy execution and organizational performance arise, what is the source?
If there is a quality or customer service problem, is that because:
- People individually are not doing their jobs?
- Team members are not in synch with each other?
- There are problems with cross-functional collaboration?
Could all three be part of the problem?
A system is effective when the work at each level – individual, team, process – is designed robustly and aligned across levels. There are three foundational pieces of successful organization and operating model design and performance:
- Job/individual level
- Team level
- Business process level
Each one is complex in its own right, and they are interdependent: jobs are embedded within teams, and teams are embedded within business processes.
Making matters worse, people are often on multiple teams, and teams may work on multiple business processes. Thus addressing work design and alignment across all three levels (individual; team; process) creates even greater complexity than the design and alignment challenges at the job and team levels on their own. And that is a main reason why strategy execution often falls short.
This article addresses how the work is designed and optimized within each level, and the challenges of having effective alignment across levels. Getting process improvement and change right means starting with systems analyses like what follows.
Design, alignment and performance at the individual (job) level
There are three core elements of successful job design and performance:
- How the job is designed: roles & responsibilities
- How it is staffed: the person’s competencies
- How engaging/motivating the work is: whether the person embraces or begrudges the work
Addressing all three of these elements is necessary to determine the enablers and barriers to job performance. Yet this foundational block to systems diagnostics is usually missing. Job design is usually controlled by the business, while staffing and engagement are viewed as the responsibility of HR.
What results is a divide-and-conquer mess, with business leaders expecting HR to solve performance challenges without addressing the job design, and HR all-too-often settling for doing just that. Yet designing solutions to performance challenges at the individual level usually requires addressing job design plus staffing and/or engagement.
For example, people regularly face challenges doing tasks they have not performed previously. They may struggle to master the new tasks quickly:
- because they face a learning curve for mastering the new tasks, and they may need help from others via training or mentoring
- because they find the new tasks less motivating than their previous tasks
- and/or because they are over-burdened with insufficient time and energy to do their work
The first challenge is a competency gap; the second is a motivation/engagement gap; the third is job design gap. Usually at least two are contributing factors to individual job performance.
An effective systems diagnostic of job performance starts with addressing the gaps in each of the these three elements, and the alignment among them.
Design, alignment and performance at the team level
Similar elements are at play when it comes to successful team design and performance:
- How the team is designed: the team members’ roles & responsibilities
- How the team is staffed: the match between each person’s competencies, what the team needs from each role, and their ability to integrate their work effectively
- How the team engages with the work: whether the team work together seamlessly, or at cross purposes (is “the whole greater than the sum of its parts”?)
Misdiagnosing performance challenges at the team level is very common, because so many things can go wrong. On the one hand, people want to contribute, be good team players, etc. If everything goes as planned, teams are created with clear goals, staffed with the best possible players, and figure out effective ways to get their collective work done in a timely manner.
The reality usually is quite different. Everyone has weaknesses which can negatively impact their teammates’ performance. For example, a finance or supply chain expert on a team may be selected because of their familiarity with doing the team’s work in the past, yet have some gaps in the technical skills needed to support the team.
Other options for staffing the team may not be available because of personnel shortages. Or the available people may be more junior, less experienced in doing the work. The team leader then faces a tradeoff: go with the “sure thing” experienced person, who has known competency gaps, but can get to work quickly; or choose the up-and-coming younger person who will take longer to get up to speed, while (hopefully) eventually being able to out-perform their more experienced colleague.
Even in the rare cases where the team is designed and staffed optimally, that’s just the beginning of the challenge. Achieving alignment in the work takes time, a lot of effort, and usually some good fortune – no negative surprises for the team. Which is why a thorough systems diagnostic addresses design and alignment at both the individual and team levels.
Design, alignment and performance at the business process level
Getting everything right for an entire business process is an order of magnitude greater than at the individual and team levels. Across an entire business process, from end-to-end, there are many teams that have to coordinate their work; all while each team deals with their internal design and performance issues, which are built on top of the individual job design and performance challenges.
The leadership challenge is how to induce seamless cross-functional alignment across organizational boundaries (silos), from end-to-end for the business process. Organizations are designed with strong boundaries separating distinct types of work because it is economically efficient to do. So compartmentalization of the work into silos is a necessity for anything to be done efficiently. Yet that compartmentalization is the exact reason why executing the work effectively end-to-end is so difficult. No one owns the entire business process end-to-end, so trying to achieve perfect alignment – or even effective alignment – across the enterprise usually is a fool’s errand.
Interventions such as business process reengineering and design thinking are designed to bring together all relevant cross-functional perspectives to evaluate the situation quickly, and design changes to improve organizational performance. If those methodologies properly incorporate all the elements detailed here across the different levels where the work happens, then they can be effective at diagnosing the sources of strategy execution failure, and gaps in organizational transformation.
Next article: Designing transformations to avoid failure
