Recent events demonstrate graphically how western economies are struggling to achieve growth. The banking crisis and its aftermath have sapped confidence and momentum.
In spite of economic gloom, the declared aim of most companies remains to achieve "sustainable, profitable growth". Good HR-orientated organisational design management (ODM) can help with all those elements - sustainability, profitability, and rate of growth.
Different Types of Growth Challenge
ODM growth challenges come in all shapes and sizes; possible scenarios include:
- Company A is losing sales in low or negative growth markets; survival depends on entering new markets (products and/or territories) whilst cutting costs
- Company B has flat sales and views industry consolidation by merger or acquisition as its route to growth, scale economies and increased profits
- Company C is already growing rapidly, but its organisation is not coping well; productivity, working capital management and customer service are slipping; top line growth is not translating into bottom line growth
OD solutions for each scenario will differ, but a number of common factors that can inhibit growth may need to be dealt with on the way.
Common Growth Inhibitors
Like people, organisations are "prisoners of their experience". Many organisations have evolved in response to short-term demands rather than strategic priorities. OD can identify when an organisational step-change, rather than yet another "bolt-on" is necessary to help deliver growth.
Good and bad complexity
Complexity is often good - a vital part of a company's competitive advantage. And it is often very bad, a "growth slower", born of historical accident, outdated technology and human inertia. OD can sort the wheat from the chaff.
Cultural insensitivity in a globalising world can be a real show stopper. OD solutions can nurture local knowledge and locate resources where they best serve growth.
“Tight-loose control” from Head Office
Over-rigid control from the Central HO can stifle growth. OD can lay down essential, non-negotiable controls and reports, but also foster and reward local growth initiatives.
Failure to keep pace with game-changing technology in manufacturing or service provision will sooner or later result in declining sales. OD solutions should be future-proofed.
Mind and skill-sets
Managers in key roles need the hunger, determination and energy to drive for growth in competitive markets. OD can help get the right mind and skill-sets in the right places.
Common ODM approaches to growth
The quest for growth starts with ruthlessly honest analysis of the status quo and a precise statement of the proposed company strategy. Any OD solution must then reflect and enable the realisation of that strategy.
HR-orientated OD specialists can make a big contribution to:
- defining a growth-orientated company structure
- promoting a growth culture, with aligned rewards and recognition of success
- re-engineering business processes to remove bad complexity
- improving communication flows
- encouraging innovation
- identifying key managers with growth-orientated skills
- integrating mergers and acquisitions
Choosing ODM Specialists
Given the formidable list of potential growth tasks and inhibitors, choosing the right ODM specialists is itself a key decision. As well as great determination, the best specialists will possess a range of attributes, including clear strategic thinking, operational excellence, hands-on capability and interpersonal skills.
The placement within an existing company structure of the ODM function, its reporting lines and its relationship with the HR, Corporate Strategy and Operational Departments, also require careful consideration. Solutions will vary considerably according to company size and circumstances.