Organization Design Governance - The Strategic Value of HR - People Plans and Talent Management | ON THE MARK
30th June 2015 Admin

Organization Design Governance – The Strategic Value of HR – People Plans and Talent Management

Over the last few months we’ve looked at how organization design needs to move far beyond being a project to a state of ongoing governance. In practical terms, this means staying “true” to the original organization design intents whilst conducting yearly reviews of the design and operating model answering the all-important OTM question:  Is our business still “fit for purpose?”  This should be just sensible strategic, operational and commercial understanding of the world of in which we work. Unfortunately, its not.

During any “strategic review, or business planning process,” understanding what the future holds is core and often the domain of strategic advisory teams, chief strategy officers and their analysts along with finance teams.  HR functions have challenged the business to consider people plans and talent management needs as part of the picture of what the future holds.

At OTM, we’ve embark on a variety of advisory, transformation and design projects, often followed by implementation support.  More and more we’re working on projects that we would describe as design governance projects.  Working with clients as part of their strategic business review and yearly planning cycle, helping them to look beyond what they know now, to anticipate the future and prepare the appropriate design response as part of their planning cycle.

So this month I thought I’d share a scenario illustrating the overlap between HR and organization design governance. Specifically, how people plans and talent management and the role they play in planning for the future.

Consider this scenario.

The leadership team for the ABC Company conduct its business planning and budgeting process every year starting in late summer completing it by end of January.  The leadership team are extremely proud of it as well as their performance review and talent planning process. The process is implemented like clockwork each year and if fact, the business sets aside two weeks per month each year – one week in the late winter to conduct performance and development plans followed by one week in the early fall to conduct reviews of progress against those plans.  Every employee and leader has this done.  This is a solid process but from an organization design governance perspective, this falls far short.

While the talent planning process is solid, it is completely disconnected from the business planning process and more importantly, aligning the future needs of the business with people plans and talent management 1-3 years out.

In this year’s business planning process and strategic review of the design and operating model, the leadership team identified an increased need for a “global focus” in one part of the business.  These globalization plans translated into identifying talent with similar expertise, however with different interpersonal and management skills such as the ability to manage and work with a virtual team. This is something the leadership team hadn’t anticipated.

With HR team members in the room during the design and operating model review, they were able to take the changes in business and breakdown into work and role requirements thus providing a better view of talent needs.  These needs were then coalesced into a robust people plan for the business looking 1-3 years out.

Doing this work is extremely effective ensuring better anticipation of the need for talent in advance, rather than being reactionary in their talent management plans. The process works well in anticipating service demand on the recruiting team, as well helping leadership to plan development investments and head-count requests as part of the annual budgeting process.

The recruiting team goes out to the market and works diligently to attract the right talent for the roles agreed upon for the coming 12-18 months, and this team works closely with the leadership team throughout the year.

Managers in the affected part of the business, have more robust development plans to upskill the people they have in anticipation of the new ways of working.

This may sound like a simple addition to the job specification however understanding the importance of this as part of the future design and operating model is critical to the success for the coming years, rather than just the next 12 months. People who are currently thriving in the office-based environment, may not in a virtual workforce. This has implications for people plans and talent management across both attraction, development and retention.

So now, as part an integral part of the annual business planning and organization design governance review, a review of how real work is affected in every Function followed by the impacts on roles is included (work to be done, roles to be played, jobs to be filled and how they all fit together as part of the design and operating model).

Going forward, the leadership team at ABC Company has realized the value of including HR as an integral part of the annual planning and budgeting process as well as asking OTM’s favorite question – “are we still fit for purpose?”

By focusing on Organization Design Governance it has highlighted the significant value of HR allowing HR to become truly a strategic partner.

By Mark LaScola

ON THE MARK’s experience and passion for collaborative business transformation that’s supported by pragmatism, systems thinking, and a belief in people is unparalleled. OTM has been in business for 26 years and is a global leader in organization design consulting.

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