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How’s it going…really?Cultural Insights from Organizational Assessment
Austin IIA, May 14, 2019
How’s it going…really? Cultural Insights from Organizational AssessmentAdam JonesSenior Consultant, Organizational Assessment/Strategic GovernanceWeaver
Tom Shindell, PhDInnovation and Strategy AnalystTexas Department of Motor Vehicles
Welcome!
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Quick history
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We have presented together before, but it has been seven years.
Working Dynamics
“Don’t bother me with the details, I am an idea man!!!!!”
• What is organizational assessment?
• Motivations that drive OA• OA Areas of Focus• The Players• The Tools of the Trade• A Case Study• Reflections
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Today’s Agenda
…and throughout the presentation, we will give voice to the internal audit perspective!
Organizational Assessment (OA):a systematic process for obtaining valid informationabout the performance of an organization and the factors that affect performance.
It is conducted in order to identify areas of competence, areas for improvement, and possible risks. Ideally, the result is to help support investment and restructuring decisions.
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Defined
http://www.reflectlearn.org/discover/your-introductory-guide-to-oa#_What_is_an
Organizational Assessment (OA):
a systematic process for obtaining valid information about the performanceof an organization and the factors that affect performance.
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Defined
Performance!!!!Factor
Factor
Factor
Factor People
Process
Technology
Governance
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Factors
Process
Technology
People
OA Factors
Governance
Organizational assessments can largely be defined by exploring three factors:
• People• Process• Technology
Underlying those three factors, governancedetermines how an organization derives authority, makes decisions and implements policy and process. It can be either public governance (statutory) or corporate governance.
Also keep in mind how an organization is structured.
The McKinsey 7s Framework provides a good starting point for OA when an organization has a commitment to and demonstration of shared values.
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Factors
Why would you embark on an organizational assessment?
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Motivations
Why would you embark on an organizational assessment?
– New Leadership
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Motivations
Why would you embark on an organizational assessment?
– New Leadership– Strategic Planning
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Motivations
Why would you embark on an organizational assessment?
– New Leadership– Strategic Planning– Organizational Crossroads
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Motivations
Why would you embark on an organizational assessment?
– New Leadership– Strategic Planning– Organizational Crossroads– Post-audit or Investigation
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Motivations
Why would you embark on an organizational assessment?
– New Leadership– Strategic Planning– Organizational Crossroads– Post-audit or Investigation– Re-organization Effort
• Reduction-in-force• No reduction-in-force
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Motivations
Why would you embark on an organizational assessment?
– New Leadership– Strategic Planning– Organizational Crossroads– Post-audit or Investigation– Re-organization Effort
• Reduction-in-force• No reduction-in-force
– “Sunset” or Efficiency Study
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Motivations
Why would you embark on an organizational assessment?
– New Leadership– Strategic Planning– Organizational Crossroads– Post-audit or Investigation– Re-organization Effort
• Reduction-in-force• No reduction-in-force
– “Sunset” or Efficiency Study– Dramatic Shift in Environment
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Motivations
– New Leadership– Strategic Planning– Organizational Crossroads– Post-audit or Investigation– Re-organization Effort
• Reduction-in-force• No reduction-in-force
– “Sunset” or Efficiency Study– Dramatic Shift in Environment
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Internal Audit Perspective
What role could – or should – internal audit play in each of these scenarios?
Organizational assessment can take multiple forms and can be a combination of those forms. Here are some of the common focuses:
Governance Information Technology Operational Functions Service or Product Delivery Strategic Planning/Priorities
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OA Areas of Focus
Organizational assessment can take multiple forms and can be a combination of those forms. Here are some of the common types:
Governance Information Technology Operational Functions Service or Product Delivery Strategic Planning/Priorities
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OA Areas of Focus
Recall…
Regardless of the focus of assessment, we are still looking at the factors that impact performance.
Governance:
How does an organization make decisions and implement policy?
How do those decisions contribute to organizational performance?
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OA Areas of Focus
Information Technology:
IT impacts all functional areas in an organization.
Is the IT organization a help or hindrance to organizational performance (or both)?
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OA Areas of Focus
NOTE: An IT organizational assessment often has more findings around people and process than it does on technology.
Operational Functions:
How do common operational functions impact performance?
– Human Resources– Procurement– Budget/Accounting– Grants Administration – Inventory– Maintenance/Infrastructure– Program Admin/Evaluation– Customer Relations– Stakeholder Relations 23
Types of OA
Service/Product Delivery:
How are key services or products being delivered to constituents or customers?
What organizational factors impact the success of those services or products?
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OA Areas of Focus
Does your organization live up to Flo’s standards?
Strategic Planning/Priorities:
An OA can be performed in advance of a strategic planning or prioritization effort or alongsidesuch an effort.
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OA Areas of Focus
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The Players
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The PlayersEven if an OA is not initiated by a governing or oversight body, it requires buy-in from the responsible decision-makers.
Board of Directors
Chief Executive
Project Director
Executive Sponsor
COO/CFO/CIO
Core Team(2-3)
Dept Heads
Stakeholders (internal)
Stakeholders (external)
Internal Model
Oversight Leadership Execution
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The PlayersEven if an OA is not initiated by a governing or oversight body, it requires buy-in from the responsible decision-makers.
Board of Directors
Chief Executive
Internal Project Director
Executive Sponsor
COO/CFO/CIO
External Team
External Model
Oversight Leadership
Execution
Departments
Stakeholders (internal)
Stakeholders (external)
Communication
So where does internal audit fit in?
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Internal Audit Perspective
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Internal Audit Perspective
In any organizational assessment, there are multiple points at which internal audit can be helpful…
Board of Directors
Chief Executive
Internal Project Director
Executive Sponsor
COO/CFO/CIO
External Team
External Model
Oversight Leadership
Execution
Departments
Stakeholders (internal)
Stakeholders (external)
Communication
Internal AuditInternal Audit
Internal Audit
…including serving as project director.
Credibility: Recognition from the main stakeholders and members of the organization, while having the right balance of authority, responsibility, insight and knowledge of the organization.Technical know-how: Understanding of the OA approach, knowledge about the organization's programs and services, and data analysis skills.Objectivity: Ability to balance the perspectives of different people.Communication skills: Ability to communicate the results of the OA in a manner easily understood by all parties.Interpersonal skills: Ability to interact with all parties in a sensitive and effective manner and ability to work as part of a team.Availability: Availability to conduct the OA and willingness to commit time to working on it.
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OA Team Attributes
32purchased image
Tools of the Trade
There are common tools and processes employed in OA, many of which are familiar to internal audit:
Observation Interviews Stakeholder Survey Process Mapping SWOT KSA Maturity Model
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Tools of the Trade
As we look at each of these tools, we want to keep in mind what cultural insights can be gleaned about an organization’s people, processes and technology.
…and how those insights inform our understanding of the organization’s performance and its effective governance.
ObservationAn assessment starts with the very first observations you make at an entrance conference.*
This is akin to the management concept: MBWA.
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Tools of the Trade
*actually, it starts well before then; you can learn a lot about an organization by negotiating a contract or scheduling a meeting.
ObservationOne observation that is relatively easy to make when walking the halls is that it is hard to hide dysfunction.
Or the opposite:
It is hard to fake functional.
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Tools of the Trade
Organizational Emotional Intelligence
Tools of the Trade
Eric is a first responder – a firefighter with the Amarillo Fire Department.
He’s also my nephew.
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Meet Eric Clark
Cultural Insights
What does your future with AFD look like?
... I just hope to continue to create great relationships and leave a positive impact on the city and department.
What’s the best part about being a FF?
We get to love on people and bring compassion to those that may not receive it normally.
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InterviewInterviews are the fundamental building blocks of gathering information about an organization.
Interview questions should be thoughtful, deliberate and allow room for interview subjects to elaborate.
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Tools of the Trade
Here are some questions to consider: Are the key stakeholders satisfied with the way the organization is performing? What are the key indicators used by the organization to monitor its performance? What are the organization’s financial priorities? Is there a clear mission and vision driving the behavior of the organization? Is there a high commitment to performance in the organization? Are there functioning systems in place that reinforce organizational values, such as
promotions, incentives, or training? Do people feel valued for their work? Does the governing structure both clarify and support organizational direction? Are the right people in the right jobs in the organization? Is the organization’s level of technology appropriate to carry out its functions? Does the organization communicate clearly and deliberately across all levels?
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Tools of the Trade
The previous questions simply scratch the surface and provide an entry point for conversations.
ReflectLearn.org offers a compendium of OA questions at the link below:
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Tools of the Trade
http://documents.reflectlearn.org/Offline%20Docs%20for%20Your%20Introductory%20Guide%20to%20OA/Examples%20of%20ToRs/OAPerformanceAssessmentQuestions.pdf
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Internal Audit Perspective
In your experience as internal auditors, what are your favorite interview questions?
What questions would you find most effective in an organizational assessment context?
Cultural Insights
Do I know what my job
is?
Do I know how
I am doing at my job?
Do I like the people I work
with?
Do I like what I do?
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This four question matrix proves an effective way to tease out the quality of management that employees are receiving. The last two questions are particularly relevant when looking at overall organizational culture.
Stakeholder SurveyAn effective shortcut to organizational culture, perception and behavior is a stakeholder(internal or external) satisfaction survey.
Many organizations have a recent one on hand, either as the result of a governance requirement or a previous planning process.
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Tools of the Trade
Stakeholder SurveyThe audience could be:
Employees Customers Other Stakeholders
If one does not exist, tools like SurveyMonkey make it very easy to do one yourself.
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Tools of the Trade
If you work in Texas government, you already have this resource available.
The U.T. School of Social Work Survey of Employee Engagement* provides longitudinal data going back almost 30 years for some agencies.
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Tools of the Trade
*formerly the Survey of Organizational Excellence
In a customer satisfaction context, make sure that management is telling the truth.
The structure and use of survey data can sometimes lead to unintended consequences.
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Cultural Insights
For example,
“The Tyranny of the 10s”
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Cultural Insights
Be discerning about how the results of a survey reflect the realityof what you know about the organization.
Process MappingProcess mapping creates a visual documentation of each step in a workflow that leads to a result: filling an order, shipping a product, issuing a certificate, others.
To the right is an example of a simple process flow.
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Tools of the Trade
The initial step in process mapping is documenting the existing process, or the
As is…But greater value can result from editing that as is process to improve efficiency and effectiveness, or the
To be…49
Tools of the Trade
How a process is perceived to work by employees and how a process actually functions can often diverge significantly.
We have examples of this in our case study.
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Cultural Insights
Here’s the official Abbott and Costello process map.
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Cultural Insights
One last note…
Remember that a process map is also a risk map. Identifying crucial process points is an initial step in any risk assessment.
How many of you use process mapping in your internal audit practice?
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Internal Audit Perspective
S.W.A.T.!!!!!
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Tools of the Trade
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Tools of the TradeUhm, I mean SWOT…
Strengths, Weaknesses, Opportunities, ThreatsA SWOT analysis is typically a focus group activity that defines the current state of the organization, ideally through consensus (but not necessarily).
Even though a SWOT is a “point in time” exercise, it often leads to a future road map. SWOT is very effective in a strategic planning context.
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Tools of the TradeThere are other SWOT-like models that can also be deployed.
SOAR: Strengths, Opportunities, Aspirations and Results (SWOT’s more positive cousin).
Porter’s Five Forces: A tool for assessing industry competitive environment
PEST: Assesses political, environmental, social and technological forces
OKRs: Objectives and Key Results, a Silicon Valley favorite
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Cultural Insights
A SWOT can be multi-layered:
Governing Board Executive Team Departments Employees Stakeholders
Differing perceptions across each layer of the organization provide valuable insights to organizational culture and performance.
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Tools of the TradeKnowledge, Skills, Abilities (KSA)A KSA matrix documents the knowledge, skills and abilities of employees in the organization in the context of the job to which they are assigned.
The matrix is also applied to the collective needs of the organization (for example: do we have enough database administrators given our current workload needs in IT?).
KSA Illustrated
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Tools of the Trade
IT FUNCTION KEY IT Department Operational Review
KSA Inadequate in Functional Area Knowledge Skills Assessment Matrix
KSA Partial in Functional AreaKSA Acceptable in Functional Area DRAFT FOR DISCUSSION PURPOSES ONLY
KSA NOT APPLICABLE
IT Knowledge Skills and Abilities Matrix
IT Function
Stra
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Ente
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Plng
Proj
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Com
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Bud
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Serv
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Del
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Syst
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Adm
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Net
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Dat
abas
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Polic
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IT S
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Appl
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Supp
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Dat
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Cam
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Del
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Adm
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Svc
Del
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Med
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Name Title
Long
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Cur
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Ass
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Long
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Sala
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2018
Sal
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Surv
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Job
Des
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Mat
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R
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Qua
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Cultural InsightsRecall a previous slide about motivations for an OA:
– Re-organization Effort• Reduction-in-force• No reduction-in-force
As soon as you embark on a KSA (reviewing HR files, gauging workloads, interviewing employees….) you will cause major organizational stress if you do not handle the upfront communication appropriately.
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Tools of the TradeMaturity ModelA maturity model can be used to assess the current effectiveness of an organization and then determine what capabilities are needed to improve its effectiveness (or to mature).
A simple maturity model is provided here.
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Tools of the TradeHere is a more complex maturity model.
This happens to be Hewlett-Packard’s. You regularly see maturity models applied to IT, sometimes using a criteria framework like COSO.
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Cultural InsightsRemember:
Not everything is worth optimizing!
You need to assess what your organization needs…
but also what it will tolerate.
Combining IA with OA!An organizational assessment can precede a number of other valued-added IA projects (or be done in conjunction):
– Internal Controls Review– Enterprise Risk Assessment– IT General Controls– Performance Indicator Development (KPI)– Business Process Improvement
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Internal Audit Perspective
Although an organizational assessment is neither an audit nor an investigation, you do find out things that people don’t always want to hear.
You need to set the ground rules for communicating findings up front.
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Final Point to Ponder…
A Case Study
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The Texas State Board for Educator Certification (SBEC) was an independent state agency from 1995 to 2005 charged with certifying public school educators, governing educator preparation programs and overseeing the education profession.
In the 2005 regular session, the Texas Legislature moved SBEC from independent agency status to become a division of the Texas Education Agency.
The TEA established a transition steering committee, which initiated a organizational assessment of SBEC.
A Case Study
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The TEA made these two people responsible for the execution of the SBEC organizational assessment:
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SBEC OA StructureSBEC reflected a traditional internal model for OA.
Texas Legislature
Education Commissioner
Tom Shindell
Adam Jones
COO
Core Team
SBEC Division Heads
Stakeholders (internal)
Stakeholders (external)
SBEC OA
Oversight Leadership Execution
Transition Working Group
SBEC touched on most of the common areas for an OA.
Governance: SBEC had extensive rulemaking
authority to be incorporated into TEA internal processes.
Information Technology: SBEC brought with it a major
legacy IT system.
*Operational Functions were not reviewed; TEA had taken them over. 68
SBEC OA Areas of Focus
Service or Product Delivery: SBEC certification is a mission-
critical service in public education.
Strategic Planning/Priorities: SBEC’s strategic plan and
priorities were examined in the context of TEA.
Observation Interviews Stakeholder Survey Process Mapping SWOT KSA (limited) Maturity Model
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SBEC Tools of the TradeThe SBEC OA was heavily reliant on observation and interviews in a collaborative fashion between the SBEC department heads and the TEA transition team (on which internal audit was represented).
There was a limited exploration of the incoming staff’s KSA.
And…
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SBEC Tools of the Trade
Extensive process mapping carried the day.
We were integrating a regulatory licensing body into the agency, full of contradictions, exceptions and unintended statutory consequences.
…all of it determined by administrative rulemaking.
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SBEC: Lessons Learned
• Employee morale is a very fragile state.
• Process mapping can be threatening in ways you can’t anticipate. People take process ownership personally.
• “Heroic effort”…is not a replicable process.
• You must communicate what you are doing and why.
• Legacy computer systems can have a disproportionate impact on performance.
• Just because that’s the way you have always done it…
• You need to know when it is good enough.
