Organizational Capability Management: The Role of I/O Psychologists in Strategy

Questions for this Session

As a practitioner, what are some of the challenges you see when it comes to execution of business strategy? How do you get from higher-level strategy to something that can be executed by the business?
How do you go about what it will really take to execute the strategy? How do you ensure that plan is successfully executed?

How can I/O psychologists/OD practitioners help? What is the Role of I/O professionals at the table to facilitate the right dialogue & process to achieve the business result.

The Case for Organizational Capability Alignment

65%

of leaders do not consider their own organizations successful at executing their strategies. (AMA, 2012)

Only 17% of senior-level

talent leaders indicate their workforce strategy is consistently aligned with their business strategy. (Hewitt Associates
& HCI, 2008)

What are your specific challenges?

What will we do?

What will it really take?

How will we get there?

Unclear Strategic Priorities Lack of Consensus On Strategic Priorities Lack of Strategic Short- and LongTerm Priorities Need to adapt/refine existing strategy to shifts in the environment

Undefined Capabilities Needed to Execute Priorities How to Close the Capabilities Gap? Are Work Streams investments Justified by value gains?

Unclear path from Work Streams to results Unclear path from Work Streams to results

Change Execution Model: Four Phases

Re-decide

PREPARE

DECIDE

DEFINE

IMPLEMENT

SUSTAIN

Full realization of critically important endeavors requires disciplined execution of: Clarifying what it will take and committing Decide
to the path ahead

Define

Implement
Sustain

Reframing, designing the solution, planning how we will get there by when & at what cost Achieving minimum acceptable realization; no turning back Achieving realization of intended business benefits
Conner Partners 2008. All rights reserved.

Conner Partners 2008. All rights reserved.

Merck & Co. Model - Work in Progress

1. Strategic Intelligence 2. Strategy Development

Results

8. Execute Initiatives

Performance metrics

3. Business Portfolio Mgmt

Operating plan Dashboards Budgets P&Ls

Performance metrics

7. Measures & Targets

4. Portfolio Resource Allocation Choices 5. Strategy Translation

6. Alignment & Execution Resources

Lessons Learned

Shell Strategic Planning:

Scenarios
OUR GOAL IS NOT TO PREDICT THE FUTURE BUT TO ENABLE POLICYMAKERS TO MAKE RICHER AND BETTER DECISIONS INVOLVING THE FUTURE, AS A RESULT OF HAVING A DEEPER GRASP OF KEY DRIVERS AND KEY UNCERTAINTIES. JEREMY BENTHAM, HEAD OF SCENARIOS, STRATEGY AND BUSINESS DEVELOPMENT, ROYAL DUTCH SHELL

March 2013 Mountains The first scenario, labeled mountains, sees a strong role for government and the introduction of firm and far -reaching policy measures. These help to develop more compact cities and transform the global transport network. New policies unlock plentiful natural gas resources making it the largest global energy source by the 2030s and accelerate carbon capture and storage technology, supporting a cleaner energy system. Oceans The second scenario, which we call oceans, describes a more prosperous and volatile world. Energy demand surges, due to strong economic growth. Power is more widely distributed and governments take longer to agree major decisions. Market forces rather than policies shape the energy system: oil and coal remain part of the energy mix but renewable energy also grows. By the 2070s solar becomes the worlds largest energy source. http://www.shell.com/global/future-energy/scenarios/new-lens-scenarios.html http://youtu.be/jIwzMhDFP2M

Copyright Royal Dutch Shell

Shell Change Architecture:

Successful change requires

Copyright Shell Organisation Effectiveness

Shell Change Architecture:

Change Health Tracker Process Overview
1.Dissatisfied leaders personally committed to the change
SCORING

Danger Caution Under Control Optimised

10. Sustainable change celebrated and institutionalised

2. Compelling case for action among a critical mass of leadership

Programme
9. Progress monitored and used to correct

Leadership

3. Diagnostic review of organization capability leading to a prioritized portfolio of interventions

Management

People
EXAMPLE

4. Implementation driven by leadership as an integrated whole

8. Change plans defined and resourced

5. Clear understanding of the case for change, the future state, the impact on them and their role in it 6. Their psychological responses are addressed

7. Involvement of those most impacted

SUGGESTED DIAGNOSTIC PROCESS

Introduce and explain the 10 change principles and the tracker tool

Agree which change programme or project to health track

Take each principle in turn and ask How well has this principle been applied to the change so far? Assign a score and move to next one Capture diagnostic insights on a flipchart as you go

Complete the diagnostic scoring Step back and draw conclusions

Through discussion, convert diagnosis into a structured set of follow up actions that: - mitigate identified change risks in each change principle - further strengthen and leverage proven strengths of the change programme/project

Copyright Shell Organisation Effectiveness

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Shell Change Architecture:

Plan on a Page (POAP) steps for each work stream
BCIM Workstreams
Direction Setting Design & Plan Mobilisation Delivery Transition Consolidation & Improvement Close Out

Programme Set-up

Change Programme Charter Change Impact Assessment Change Strategy Change Implementation Plan Design Strategy Document Programme Kick off Workshop * Programme Overview Implementation History Assessment

Implementation Plan

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Manage and Document Programme

12

Change Implementation Plan Change Health Tracker Individual Readiness Assessment

After Action Review Transition Project Plan Programme Roles and Responsibilities

Close-out, Communicate, Celebrate, Redeploy

Engage Leaders

Change Agent Training

Communications & Engagement Strategy Stakeholder Analysis & Engagement Plan Programme Roles & Responsibilities Matrix Change Agent Assessment Sponsor Assessment

Communicating Change Programme Change Agent Assessment Sponsor Assessment

1 Implementation Assessment 1 After Action Review

Post Organisation Design Capability Diagnostic Level of Alignment Survey

Stakeholder Engagement Plan

Stakeholder Engagement and Communication

Communications & Engagement Strategy Stakeholder Analysis & Engagement Plan Communications Plan

Change Health Tracker Communications Health Traker

Context Setting Visioning Organisational Capability Diagnostic Design Criteria Design Blueprint

Conceptual Design

Implement Organisation Design

Detailed Design Tools: (Processes, People, Structure, Culture, Leadership) Design Proposal Transition Project Plan

Preparing the workforce commences in the Design and Plan phase

Training

Training Strategy Training Needs Assessment

Copyright Shell Organisation Effectiveness

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Fundamental Questions

How well are you positioned to compete in the marketplace? Do you have the resources to play? Is your strategy robust? How well can your organization implement your strategy? Do your actions create the results you want? IF NOT, YOU HAVE TO CHANGE YOUR STRATEGY, YOUR CAPABILITY, OR BOTH

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Successful Strategy Implementation Requires:

Understanding of a Companys Building Blocks

Context: Business Environment, Corporate History, Competitive Landscape, Marketplace (s), Regulatory Environment
Resources Strategic Direction Organization Capability Business Results

Financial Capital
Technology Product Portfolio Corporate Governance Strategy

Policies, Systems and Processes

Organization Structure

C
Leadership

Financial Return Market Share Share Price

Talent

Culture

Reputation

Parlyle Consulting

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Successful Strategy Implementation Requires:

Action Steps

Support Client to:

Dissatisfaction with the status quo Coalition of Leaders

Compelling case for action among a critical mass of leaders

Robust Strategy Organization Capability Gap Analysis = portfolio of interventions

Become Aware of their own dissatisfaction so much so that they have energy to change Paradox of Change
(as-is better starting point than should be)

Policies,Systems Systems, Processes Organization Policies, and Processes Structure Organization Structure Culture Talent Talent Leadership

Leadership
Culture

Move from Beginning, Middle to End of Intervention Overcome Getting Stuck

(Defense Mechanisms/Resistance) Desensitize Projection Deflection Intellectualization Introjection Retroflection Blurred Boundaries

Rigorous Change Management of each intervention

Change itself Peoples psychological reorientation to the change

Quantitative Qualitative

Metrics to Know Youve Arrived

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Polling question

1.

To what extent are you involved in your organizations strategic planning process? a) Not at all b) Somewhat involved c) Very involved

2.

How robust is your approach to secure organization capabilities? a) Not so robust b) Somewhat robust c) Very robust

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What is an Organization Capability?

BMS Definition:

An area of collective ability required of our organization in order to successfully execute the strategy and deliver value
Not just about people skills--tend to comprise a larger integrated system Not about tasks or activities Capabilities to play...win!
When we create a system of mutually reinforcing capabilities, we create competitive advantage1
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1The

Coherence Premium, Paul Leinwand and Cesare Mainardi, Harvard Business Review, June 2010, 86-92

BMS Organization Capability Framework: An iterative process Prioritize & Action Plan
(What will we do to get there?)

Identify
(What do we need? Where is there?)

Assess
(Where are we today? Where do we need to be, by when?)

Execute

Identify organization capabilities required of strategy Define what good looks like Conduct External Benchmarking

Assess current and desired capability maturity level, and timing

Identify actions to close gaps & timing: Organization Capability Plan

Execute plan Monitor Performance Refresh regularly

Integrate actions into: Workforce plan Learning & Development Org Design

17 2013 Bristol-Myers Squibb Company

Lessons Learned

Deliberate Alignment
to Strategic Priorities

Follow the Energy

and embed Organization Capability work in existing sponsored initiatives

Capability Planning allows the organization to deliver its strategic intent strategy only creates value if its implemented
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Turning Strategy into Action

How will we get there?
How will capability-building work streams translate into detailed work plans?
An Integrated Implementation Roadmap provides detailed information about tasks, roles, deadlines and milestones
12-18 Mo. 2-5 years

What will we do?

Are strategic priorities specific enough to be actionable but simple enough to be well understood?

What will it really take?

What will the organization need to look like in terms of structure, processes, skills and culture to achieve strategic priorities? Where are the gaps compared to todays organization?

Define short and long-term strategic priorities

Organizational Requirements

Current Organization

Vs.
Examples of Capability Building Work Streams
Redefinition of work activities Skill-Building and Alignment Organizational Restructuring Workforce Engagement Investment Forecasted value creation

6 months 18 months 2 years

Reorder or modify strategic priorities?

Capability Building Work Streams are defined based on which gaps are most critical to close, considering time and resource requirements.

Reorder or modify Capability Building Work Streams

Bristol-Myers Squibb Company & Fisher Rock Organizational Consulting

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WHAT CAN I/O PSYCHOLOGISTS BRING TO THE TABLE?

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I/O Competencies

I/O Psychologists bring a wide array of competencies to the table to facilitate the right dialogue & process to achieve the business result.

Research Methods & Analytics

Process Consulting & Stakeholder Engagement

Talent Management Expertise

Organizational Design

Team Building and Facilitation

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Internal and External I/O Partnership: Influence and Power Dynamics

Internals Customer Intimacy part of the System
Internal External Work up via the hierarchy

Externals Expert with external perspective

External - External Networked in to the Top not part of the hierarchy Trusted Advisor to the CEO
(safer to speak truth to power)

Strategic

Operational

Subordinate to the CEO Fixed Cost Mutual Investment

Variable Cost Expendable

Tactical

Deep Roots in the Culture

Anthropologist external observer with knowledge of other systems and cultures

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A Suite of Tools

What will we do?

What will it take?

How to get there?

Strategic Capability Alignment: Assessment and Report Leadership Team Offsite Team Effectiveness: Negotiation Toolbox Decision-making Network

Joint Business-HR Summit Gap Visioning and Identification ROI Assessment and Calibration Tool

Work Stream Roadmap Program Governance Architecture Roadmap Dashboard and Processes RACI Project Plans

Project Management Office tools and processes kit

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What will we do?

AP Assessment

Sample Questions

Assessments to Calibrate Understanding and Commitment

The Business Model: What concerns do you have about the potential of your business model for fueling the organizations growth? Current Organization Architecture: What competencies are needed by members of the organization in order to be successful? How does this fit with the current skill profile within the various units of the organization? Current Organization Architecture: What are the requirements of the organizations leaders to fuel growth for the organization? Feedback for CEO: What would you like the CEO and others to learn about improving the organizations performance that they may not already know?
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Issue: Leadership Team Alignment to Strategy Approach/Tool: CAP Assessment and Report Outcomes: Assessment of Leadership Team Alignment to Strategic Priorities

What will it really take?

Proposed Agenda: Day 1

Strategy Alignment and Work Streams Planning Offsite

Time
9:00 9:15

Agenda Item
Opening

Intended Outcome
Understand objectives of meeting Agree on ground rules Get comfortable with other attendees and create open and trusting environment Understanding of key attributes of high growth organizations

Lead
CEO

9:15 9:45

Icebreaker

I/O

Issues: Closing the gap between current and required capabilities, defining capabilitybuilding work streams, and justifying strategic priorities Approach/Tool: CAP Joint HRBusiness Summit Agenda Outcomes: Capability gaps and work streams identified, an aligned understanding and confirmation of short and longer term strategic priorities

9:45 10:45

10:45 11:00 11:00 am 12:00

Characteristics of high-growth organizations Break Present results of assessments

I/O

Begin to build understanding, alignment and commitment on strategic priorities. Identify large workstream buckets.

I/O

12:00 1:30 1:30 3:30

Break Workstream Planning Small cross-functional teams draft workstream plans, which include goals, resources, and timeline Report out of workstream plan. Refinement and prioritization Planning of next steps and clarify accountabilities and resources needs CEO Head of HR

3:30 4:30

Refinement & Prioritization Next Steps

4:30 5:00

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How will we get there?

Program Governance

Governance Architecture
Senior Leadership Team

Issue: Translating capability-building work streams into overall charter, roadmap and detailed work plans. Approach/Tools: Program Governance Architecture Outcomes: The structure, roles and accountabilities of senior leadership, the steering committee, the core program team and the project teams

Steering Committee

Core Team

Workstream Teams
Strategy Structure and Processes Talent & Capability Leadership & Change Management

Subject Matter Experts

Special Advisors

Project Teams

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