OrgVue - HR Analytics, Organisation Design, Methods and Challenges

JUNE 2012DECEMBER 2013

HR Analytics & Organisation Design –Methods and challengesBrighton – Part 1

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Who we are: Concentra is a firm that delivers consulting value using innovative analytics

75 people, based in Borough Market, London

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Companies usually require many software products to plan and manage their organization

Common software products for organization planning and management

1 BUSINESS INTELLIGENCE 2 ORG CHARTS AND WORKFORCE PLANNING

3 TALENT MANAGEMENT 4 PROCESS DESIGN AND COSTING

• Database, data warehouse and data cubes

• Linking multiple systems

• Data visualisation

• HR specific IP and HR analytics

• Org Charts

• Matrix reporting

• What-if and scenario analysis

• Spans and depth reporting

• Succession planning

• 9-box grid

• Competency mapping

• Objective mapping

• Flight risk analysis

• Process definition and mapping

• Accountability matrix (RACI) mapping

• Process costing

• Mapping processes to customers and Cost-to-

Serve

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OrgVue revolutionizes organization management by combining many capabilities in a single product

OrgVue capabilities

1 BUSINESS INTELLIGENCE

• Database, data warehouse

and data cubes

• Linking multiple systems

• Data visualisation

• HR specific IP and HR

analytics

2 ORG CHARTS AND WORKFORCE PLANNING

• Org Charts

• Matrix reporting

• What-if and scenario

analysis

• Spans and depth reporting

4 PROCESS DESIGN AND COSTING

• Process definition,

mapping and costing

• Accountability matrix

mapping (RACI)

• Mapping processes to

customers and Cost-to-Serve

3 TALENT MANAGEMENT

• Succession planning

• 9-box grid

• Competency mapping

• Objective mapping

• Flight risk analysis

PLUS ORG DESIGN AND MODELING

Org Design Revolutionary

modelling

PLUS POWERFUL DATA TOOLS

Drag-and-drop

data cleansing

Surveys and

web forms

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We believe that the work should lead the way, but that process design can often be too complex…

Examples of poor process design

Too complex Frankly useless

… or the team has to organise the work after structures have been set higher up

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… or process design can be incomplete, with the team having to ‘work out’ the work after structures have been set higher up

Examples of top-down change: 03 Dec 2012


What does HR do ?!HR process mapping, time allocation, importance weighting & data item prioritisation

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In the first half, we aim to give you 5 key things to take away

Agenda for the ‘HR processes’ session

The five things we want to give you to take away are:

1. HR Process mapping cards & a powerful method

2. A ‘Brighton set’ of HR effort benchmarks

3. Priority surveying method

4. A ‘Brighton set’ of prioritised HR decisions

5. A ‘Brighton set’ of prioritised HR data

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We mapped the activities of a generic HR department

Generic HR process map

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The HR process cards are used to organise your activities into a structured flow

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Time allocation allows you to compare your process to other companies’ processes

Time allocation exercise

Use the coins to get a

sense of where the

time is spent

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The process map helped us to identify 65 standard HR decisions covering all core HR activities

For which decisions has enhanced decision making capability the largest impact?

Example: Decisions for value stream Employee Journey


HR Analytics & Organisation Design –Methods and challengesBrighton – Part 2

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In the second half, we address five common Challenges for Organisation Design with solutions to each

Agenda

The five challenges we want to address are:

1. How to establish a Baseline? [Data from multiple sources]

2. How to map Processes? [Human interface]

3. How to treat the organisation as a System? [Data from multiple angles]

4. How to Right Size the organisation?

5. How to Assess impact on the people affected?

… because these are not often discussed and rarely solved

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The process of Org Design has many challenges throughout

DEFINE CASE FOR CHANGE

AND MACRO DESIGN

UNDERSTAND

AS-IS

DEFINE MICRO

TO-BE

IMPLEMENT

• Contradictory drivers not well understood and too much complexity

• Vested interests focus on increasing power base rather than defining the optimal structures

• Which frameworks to use?

• Data not in one place or clean

• Missing data

• Job titles do not reflect what people actually do

• Key pieces missing –e.g. competencies

• Lack of ability to visualise or understand

• Need to translate

“Macro” principles into

effective detail

• How to right size?

• How to define

accountabilities and

link to roles?

• Which competencies

are needed for which

roles?

• Selection process of who gets which role

• Communicate the to-be model, to be accountabilities, to be skills required and allocation of people to roles

• Deal with the transformation and on-going change

Summary organisation design steps and example issues

EX

AM

PL

E C

HA

LL

EN

GE

S

FIGHT FOR

TRANSPARENCY

BALANCE MACRO DESIGN

TRADE-OFFS

DEFINE AN INTEGRATED

SYSTEM

MAKE IT REAL AND

SUSTAINABLE

PR

OC

ES

S

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We have developed a method to address these challenges in a structured way

The OrgVue 3M Org Design Method

1. Summary of the end-to-end Org Design

Process

2. Macro Design Challenges

3. Start-up: Contracting & Comms for project

success

4. Vision-to-Mission and overall Strategy

5. Design Criteria

6. Summary process mapping

7. Structure options

8. Accountability matrix

9. Reality check: the informal organisation

10.Business Case

24. MIR (Making it Real) checklist

25. HOWWIP

26. Risk Management

27. Action Management

28. Project Management inc. Governance

and Quality management

29. Job Descriptions

30. Competency Assessment and Tracking

31. Workforce - Timeline & management

32. Selection Process - People to Roles

33. Impact Analysis

34. Communications

35. Talent mapping & succession planning

36. Fast Feedback & 360 degree Feedback

37. OD Review: Benefits Tracking & delivery

38. Celebrations, Review & Recap of end-to-

end Org Design Process

MACRO DESIGN MICRO (PLAN TO TRANSITION)

11. Baseline & data

12. Org Charting & visualisation

13. Objectives

14. Detailed Process Design

15. Detailed Accountabilities & Structure

16. Decision Making

17. Competencies

18. Right sizing

19. Non Business-as-Usual

20. Risk Planning

21. Action Planning

22. Pay & Grading

23. Workforce Planning

MAKING IT REAL (TRANSITION)

Source: OrgVue, 2012

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Agenda

1. How to establish a Baseline?

2. How to map Processes?

3. How to treat the organisation as a System?




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How do you establish how many people, who does what, what the costings are?

If you can get the baseline clear, it enormouslyhelps you to make the case for change

Situation: Power of a fixed starting point

“Give me a place to stand,

and a lever long enough and

I will move the Earth.”

Archimedes, 280-211BC

1 HOW TO ESTABLISH A

BASELINE?

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Yet issues with data arise from many angles

Complication: typical issues that we see

TYPICAL ISSUE EXAMPLE

Scale of data • ‘We have between 7,000 and 7,500 people across more than 50 countries

– but we can’t say for sure in any one country.’

Multiple systems • ‘We have started to implement Peoplesoft. We are 2½ years in and it’s

about half completed. Most of the remaining countries keep their HR data

in excel’

• HR people in 15 countries out of 50

Inconsistent meta data • Different job titles, grade structures, pay bands even within countries

• ‘We have grown by acquisition and we have nightmares about the different

terms and conditions we have inherited’

Reporting lines unclear • It’s not clear who reports into whom

• Three types of matrix reporting

Changing data, not kept up to

date

• ‘Our organisation charts are always out of date’

• Grading becomes inconsistent across business units

• Job titles in the system not keeping pace with what people do


BASELINE?

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Our approach is a consistent 5 step approachto building the baseline

Resolution: baseline approach


BASELINE?

1. AGREE DATA

PRIORITIES5. MAINTAIN3. CLEANSE

4. TRIANGULATE

AND SIGN OFF

2. SOURCE

AND LOAD

• Define questions

that need to be

answered

• Use standard lists

to prioritise data

elements

• Agree owners

• Map source systems

and Excel islands

• Collect

• Automate if needed

on an ongoing basis

• Run surveys and/or

workshops to plug

data gaps

• Visualise gaps and

errors

• Put data into the

hands of those that

know it best

• Provide a system to

make it easy to clean

errors

• Agree meta data and

fix

• Identify key

stakeholders who can

verify data

• Facilitate meetings to

resolve differences

• Achieve one source of

the truth

• Ensure numbers match

with Finance

• Provide the process

• Provide the method

• Provide the skills to:

Keep it up to date

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1. Agree the data priorities and sources

Example fields for baseline data


BASELINE?

What is the source?

Data quality and plan to plug gap?

What if we don’t have the data?

What is the need now vs. later?

DATA ITEM NOTES

First Name Might want to include fields such as “known as”

Last Name

Employee IDIf not consistent between systems, OrgVue can create unique

global ID

Line Manager IDThe ID may vary between country systems; some line managers

appear in multiple country systems

RoleWill, in due course, need to agree a common definition of the

roles

Salary Will need to include benefits, bonuses, other costs inc. tax

Currency What FX rates should be included?

Department Will need to achieve consistency in functional definitions

Site LocationCould reference site name or code; potential to aggregate

regionally and nationally

Performance review

rating

Typically from another system; history would add additional

insight for spotting trends

Start dateAllows calculation of tenure, risk of turnover and termination

costs

Birth dateCould be useful for strategic workforce planning and predicting

potential waves of departures

First Name Might want to include fields such as “known as”

DATA ITEM NOTES

GenderUseful for responding to

regulatory queries on diversity

Employment

status

Permanent, Temp, Ltd Co.

Contractor, other Contractor,

FTE Hours FTE = Full Time Equivalent.

Termination

costs

Grade

Absence

record

For example number of days or

Bradford factor

4321For each:

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Customer

2. Load the data from multiple systems

Data sources and usage process


BASELINE?

CONSOLIDATE DATA USE DATASTORE AND MANAGE DATA

Local HR systems

Canonical data set

Local

data

use

Read-

only

data

viewing

Copy /

paste

local

upload

Local

upload

Feed back where required changes are identified

Review Environment

CSV

local

upload

PerformanceTraining

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3a. Visualise the data to get stakeholder views

Example org chart sized by headcount


BASELINE?

Visualise to identify quickly where there may be issues in the data

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3b. Cleanse the data intuitively and easily

Dragging and dropping in action


BASELINE?

Drag and drop to correct information regarding individuals or groups

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4. Achieve sign-off by triangulating from multiple angles 1 HOW TO ESTABLISH A

BASELINE?

Sign-off process

Data collected

from HR

department

Data collected

from Finance

department

Compare HR data against a function that’s likely to have accurate data e.g. Finance.

Get a sense check from

stakeholders who

should have a strong

gut feeling

Get a sense check from

stakeholders who

should have a strong

gut feeling

THAT’S

CORRECT!

IDENTIFY

DIFFERENCES

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5a. Maintain the insight for the long-term 1 HOW TO ESTABLISH A

BASELINE?

The data must be easy to maintain long after the project team has gone

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5b. Maintain the insight for the long-term

Example data quality tracking


BASELINE?

• Chart 1: 1,470 employees, of whom 175 are orphans. An

employee is an orphan if he has nobody to whom he must

report and nobody who reports to him.

• Chart 2: 266 employees are at “depth 1”. After subtracting

the 175 orphans, the data still counts 91 “orphan groups”

• Chart 3: Many examples of low spans of control

• Chart 4: Each data entry refers to exactly one employee.

This is how it should be!

Data reveals many

‘orphans’ and broken

hierarchies. The HR data

provided so far may include

some inaccuracies!

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Complexity often overwhelms the process mapper

Situation: examples of complex process mapping

Too complex Frankly useless

2 HOW TO MAP PROCESSES

IN ORG DESIGN?

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You have to know when to stop and how tocapture ongoing value from the process map

Complication: Level of detail and maintaining the value

• Know when to stop

• Focus on the business value in the workstream

• Scale the depth to the size of the organisation

• Convert one-off exercise into ongoing value

e.g. data driven, not just images

• Ongoing link to other data sources, e.g. roles


IN ORG DESIGN?

Process mapping risks disappearing into detail or being a one-off exercise

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Our approach is to map processes visually, in a way that can be linked, calculated and updated

Resolution: Process map showing activities, decisions and deliverables


IN ORG DESIGN?

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It is useful to connect the processes to the roles that carry them out

Example of linking by RAS or by capability


IN ORG DESIGN?

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It is valuable to show the links visually to helpclarify responsibilities

Organisation chart with ‘linked’ cards showing responsibilities


IN ORG DESIGN?

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Agenda







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Org Design experts value a holistic approach

Situation: what the experts say

“Organisation Development is about building and maintaining the health of the

organisation as a total system” (Schein, 1988)

“Organisation Design …requires holistic thinking (systems, structures, people,

performance measures, processes, culture, skills…); not to be undertaken lightly;

a fundamental process and not a repair job…” (paraphrased from Stanford,

2007)

“We have to learn how to view an organisation as a system .... the way all parts

work together will determine how well the system works.” (Seddon, 2012)

“A common error in organizational improvement work is to address certain

design elements in isolation…” (Hanna, 2013)

3 THE ORGANISATION AS A

SYSTEM

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The reality is that OD is often based on part of the system

Complication: examples of OD in action

So how do you think about the organisation as a system?


SYSTEM

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EXERCISE

In practice, do organisation restructurings address the whole system?

In your group, identify the main themes in your case example. Does it contain:

• Product changes?

• Process changes?

• Competencies changes?

• Role changes?

• Personnel changes?

• Job description changes?

The challenge: is your example an Organisation Design situation?

Do you have indications of whether it is being addressed holistically?

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We seek to treat the organisation as a system

Resolution: linking the key aspects of the organisation


SYSTEM

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Case study: a client had aggregate revenuescustomer numbers & revenue build-up by brand

Aggregate Revenues by Brand

Number of customers per Brand

Revenue build up by Brand


SYSTEM

CASE STUDY

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We sought to understand 100% of costs either as people, processes or customers

Process cost

distributed by

driver ratios

Percent time spent

by each person on

each process

People (e.g.: £56m of cost)

Customers (e.g.: £56m of cost)

Processes

e.g.: £16m of cost

e.g.: £40m of cost

Direct allocation to

customers based on

time percentage and

driver ratios

CASE STUDY


SYSTEM

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We* interviewed the majority of level 3 managers and key figures at levels 4 and 5

Level 2

CEO

Level 3

L4…


SYSTEM

CASE STUDY

* Project team of two: one external person and one internal person

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We documented 72 business processes covering 700 process steps 3 THE ORGANISATION AS A

SYSTEM

CASE STUDY

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By week 4 we had linked a third of employees to business processes (170 out of 526) 3 THE ORGANISATION AS A

SYSTEM

CASE STUDY

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By week 6 we had allocated 15% of overhead costs to business processes (£8.5m of £56m) 3 THE ORGANISATION AS A

SYSTEM

CASE STUDY

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By week 10 we had fully allocated all cost to the customer and process levels 3 THE ORGANISATION AS A

SYSTEM

CASE STUDY

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Agenda







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There are few agreed ways for sizing theorganisation

Situation: A gap in methodology

“I’d like to know how many people I’ve got … and

I’d love to know how many people I need.”

US CardCo Ops Director

How do you set the organisation at the right size for what it needs to do?

4 HOW TO Right Size THE

ORGANISATION?

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Typically, right-sizing isn’t done with anything like the rigour it deserves

Complication: 4 frequent default options

It just evolves

Magic Number

Who shouts loudest

Across the board cut


ORGANISATION?

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EXERCISE

What is your experience of right-sizing as part of Organisation Design?

In your group, discuss:

• In what percentage of your Org Design interventions have you sought to ‘Right Size’ the

organisation?

• What method did you use?

• What was the organisation’s reaction to the analysis?

• Would you recommend using a right-sizing method to others?

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We believe you can select robust methods to Right Size the organisation

Resolution: 4 right-sizing methods

1 Ratio analysis

The comparison of the number of FTEs in one

area to another measure, e.g. Total: HR; Sales:

Sales people cost Always used

2Activity

analysis

Survey how much time people spend on each

of their key activities

In large changes when what each person does is unclear

3Driver

analysis

Powerful analytics deliver rapid insights and

help the business address drivers of

performance

When demand for effort is unclear and needs to be tested

4Mathematical

modelling and

simulation

Used in non-deterministic and complex

settings, e.g. when there are flows or demand;

uncertainty of effort; system dynamics

Rarely and in the most complex situations

Increasing

frequency

Increasing

sophistication


ORGANISATION?

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Typical questions can help you get started

Example right-sizing questions

Sample starter questions

• What are the standard roles & job families in operations, customer service, Finance and HR?

• What are the core value-adding activities?

(test: would the end customer want us to do this?)

• Are the core roles fixed costs or variable costs?

(are they independent of or driven by business volumes?)

• Where are the highest ratios of outputs achieved per core role?

• Where are the lowest ratios of support to core roles?

• How much would it be worth if we could get to the best (or 2nd best) levels of each?

• What would we need to do to get there?

• How best to triangulate and balance the various ratios/KPIs?

• What is must have vs nice to have?

• ….

Source: Concentra


ORGANISATION?

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There are multiple types of impact from

organisational changeSituation: five typical issues

How do you calculate the impact of change and communicate it to those affected?

Change in

manager?

Change in

responsibilities?

Change in who

is reporting to

whom?

Loss of job? Change in

location?

5 HOW TO ASSESS THE

IMPACT?

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Each role or employee might be affected in its own way

Complication: Tracking impact in detail

5 HOW TO ASSESS THE

IMPACT?

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EXERCISE

What is your experience of impact analysis as part of Organisation Design?

In your group, discuss:

• How often in your Org Design interventions have people’s roles, line management relationships,

salaries, or locations been affected?

• In what percentage of these cases have you done an ‘impact analysis’?

• How did you do it?

• What was the organisation’s reaction?

• Would you recommend using impact analysis to others?

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You need to be able to see the impact of change at the summary level…

Resolution: Visualisations of impact

5 HOW TO ASSESS THE

IMPACT?

It helps if impact can be quantified easily and visualised by area

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…and each manager needs to know who isaffected in what way, in their area

Resolution: Lists of people impacted

5 HOW TO ASSESS THE

IMPACT?

Impact has to be easy to list for managers

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We have covered five Challenges for Organisation Design and HR Analytics and how to solve them

Agenda for the working session


The five HR challenges we want to address are:






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Reminder: the OrgVue approach to Organisation Design

The OrgVue 3M Org Design Method

1. Summary of the end-to-end Org Design

Process

2. Macro Design Challenges

3. Start-up: Contracting & Comms for project

success

4. Vision-to-Mission and overall Strategy

5. Design Criteria

6. Summary process mapping

7. Structure options

8. Accountability matrix

9. Reality check: the informal organisation

10.Business Case

24. MIR (Making it Real) checklist

25. HOWWIP

26. Risk Management

27. Action Management

28. Project Management inc. Governance

and Quality management

29. Job Descriptions

30. Competency Assessment and Tracking

31. Workforce - Timeline & management

32. Selection Process - People to Roles

33. Impact Analysis

34. Communications

35. Talent mapping & succession planning

36. Fast Feedback & 360 degree Feedback

37. OD Review: Benefits Tracking & delivery

38. Celebrations, Review & Recap of end-to-

end Org Design Process

MACRO DESIGN MICRO DESIGN

11. Baseline & data

12. Org Charting & visualisation

13. Objectives

14. Detailed Process Design

15. Detailed Accountabilities & Structure

16. Decision Making

17. Competencies

18. Right sizing

19. Non Business-as-Usual

20. Risk Planning

21. Action Planning

22. Pay & Grading

23. Workforce Planning

MAKING IT REAL

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Reminder: The Organisation as a System

Resolution: linking key aspects of the organisation

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Reminder: Visualising the organisation

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Revolutionise the way you see, plan and manage your organisation

For more information contact us at: [email protected]

mailto:[email protected]