Have you ever finished reading an article that just spoke to you? You were reading all the thoughts that had been jumbled around in your head, but someone organized and articulated them?
I just finished “A critical review of the three-box model for HR organization design” by Mark LaScola and Simon Davies, in the First Quarter 2011 WorldatWork Journal. In it, the authors assert that the very popular organization design for HR of 1.)strategic business partners, 2.)centers of excellence and 3.)shared services model is seriously flawed. Their rationale is that the model gives little pieces of whole work to several different parts of the HR team, which causes fragmentation and artificial boundaries. While they don’t use the word “silos”, it screams at me.
While I have groused about HR silos for many years, I don’t think I ever thought about the organization design as being a factor. I always attributed it to lack of communication and cross-function awareness. But they raise a really good point, reflecting on organization design as described by Treacy & Wiersema in “The Discipline of Market Leaders” (1995) – a huge influence on business in the 1990s, and one that I often see misquoted or misunderstood, using the term “operational excellence” without really understanding the premise.
Treacy and Wiersema postulate that there are basically three organizational designs, and a successful organization needs to be very clear on which design they adopt because it guides all of their decision-making. The basic premise is that a successful organization cannot be all things to all people and do anything well.
Back when I first studied their concept, we talked about great visual examples of the three designs that made great sense and stuck with me.
- “Operational Excellence” is defined as “best total cost”. The way to do that is standardized and consistent processes. Sort of “when you eat at McDonalds, you get a burger with ketchup, mustard and pickles”. If you want something different, you have to wait. (Well, that was in the 1990s – today they’re a little more flexible)
- “Customer Intimacy” is defined as “best total solution”. You provide custom solutions as defined by the customer. Think “have it your way” at Burger King.
- “Product Leadership” is defined as “product differentiation”. The focus is on always staying ahead of customer needs and wants – Think Apple designing products that no one even knew they wanted.
When you think about these three models, it is easy to see how organization design, skills and competencies and decision-making are different based on the approach, right?
When you are clear on your model, decisions become easier. You can educate the workforce on the values and parameters and let them loose.
Back to HR….LaScola and Davies suggest that HR has put themselves in the position of trying to be everything to everyone – customer-driven, timely and efficient, and highly innovative. They suggest that HR teams have a dialogue about who they are and define their value proposition, using input from the end-user, and design their work to fit the needs of the end-user, and keeping whole processes together to ensure that someone is looking at and responsible for the whole.
That makes a lot of sense to me….how about to you?
LaScola, M. & Davies, S. (2011). A critical review of the three-box model for HR design. WorldatWork Journal. Vol 20:1.
Treacy, M. & Wiersema, F. (1995). The Discipline of Market Leaders”. Addison-Wesley: Reading MA.