Dealing with Organizational Changes

According to a 2013 Towers Watson survey, 25% of employers sustain advantages from organizational changes over the long term. The notion of change can be quite alarming for many.  However, change is inevitable for organizations, given the environment we’ve experienced over the last decade. In this issue of Astronology, we discuss organizational change…and ways to do it successfully.

Change is inevitable, considering in the last 10 years we’ve had to deal with

• The economic downturn and slow recovery
• An increasing demand for employees with technical skills
• Overall process changes with advancing technology and globalization

Some organizations, in order to stay afloat, have had to deal with mergers, technical skills upgrades for employees dedicated to outdated methodologies & technologies, and changes in lead staff due to early retirements & layoffs.  With only 25% of employees seeing an advantage in these sometimes necessary and generally large adjustments, it’s important to understand what the major factors are in making organization-wide changes and having participant buy in for successful results.  To facilitate success, managing change can be broken into two factors: planning and following up with execution.

Planning

Although it sounds easy, planning is anything but. Planning involves more than just identifying areas that need change. It also involves recognizing the areas of concern, and addressing & managing worker enthusiasm, or “buy in” to change.

In order to have workers buy in to change, they must be motivated to want to change. This is mainly done by alleviating the natural anxiety that comes with facing an unknown future. This is where education and training become important. When workers are aware of what to expect and how to handle it, anxiety is lessened. When workers feel involved in making changes, whether by input in the design of change or having a dignified role in its execution, control is given which can lessen anxiety. Anxiety can also be lowered by making clear to workers what the organization’s mission is in conjunction with the new changes. Including team building moments leading up to the change can give a sense of security and comradery. Giving evidence that workers will have the opportunity to build their own careers from these changes is also a great incentive. Clear communication on these points is of high value.

Execution

During the execution of change activities, availability of support is crucial. Employees must know that they have the resources available to carry on their responsibilities during and after the change. It is also imperative that leaders are available to give support, clear communication, and even commendation during the adjustment. Human Resources expert Susan Healthfield expresses, in an article for the human resources page on about.com, “Spend extra time and energy working with your front line supervisory staff and line managers to ensure that they understand, can communicate about, and support the changes. Their action and communication are critical in molding the opinion of your workforce.” She makes mention of a previous client that had to deal with changes in work teams. The client had expressed that they wished they had handled differently mid-level managers who resisted change. The client had given these particular managers 18 months to buy in to the change.  It was observed that this kindness undermined the change for some time.

                  
Inc.com’s online article, “Managing Organizational Change” lists these key steps when making organizational changes:

• Understand the current state of the organization.

• Identify problems the organization faces.

• Assign a level of importance to each one.

• Assess the kinds of changes needed to solve the problems.

• Competently envision and lay out the desired future state of the organization.

• Carve the ideal situation for the organization after the change is implemented.

• Convey this vision clearly to everyone involved in the change effort.

• Design a means of transition to the new state. An important part of the transition should be maintaining some sort of stability.  Some things—such as the organization’s overall mission or key staff—should remain constant in the midst of turmoil to help reduce people's anxiety.

• Implement the change in an orderly manner.

• Manage the transition effectively. It might be helpful to draw up a plan, allocate resources, and appoint a key person to take charge of the change process.

• The organization’s leaders should try to generate enthusiasm for the change, by sharing their goals & vision, and acting as role models. In some cases, it may be useful to try for small victories first in order to pave the way for later successes

The Difference Between a Great Manager and an “Okay” Manager

According to a report from gallup.com, “managers account for at least 70% of variance in employee engagement…”.  With a March 2015 survey discovering that only 32.9% of employees are engaged at work, clearly management has a dramatic impact on employee engagement and work productivity. In this issue of Astronology, we look into the characteristics needed to define great management versus mediocre management.

As discussed in our first Astronology article of 2015, there are various areas that managers can target to improve employee engagement. Those highlighted areas were the following:

·       Goal Setting

·       Communication

·       Promotion of Work / Life Balance

       Targeting these areas can be the start of attacking a bigger issue for managers…manager engagement. An April 2015 Gallup report stated that although 54% of managers with high talent are engaged at work, just 35% of all U.S. managers are engaged in their work and workplaces. 51% of U.S. managers are not engaged…and 14% are actively disengaged.

Ultimately, the difference between a great manager and an “okay” manager is leadership quality. The April Gallup report discovers that the talent of being a great manager is found in one out of 10 people, while another two in 10 possess a basic talent for management. With training and coaching, these abilities can be heightened. The talents Gallup observed in great managers are the following:

·       Ability to motivate every employee to take action via engagement

·       Assertiveness in driving outcomes and overcoming adversity & resistance

·       Create a culture of accountability

·       Build working relationships that create trust, open communication, and full transparency

·       Make decisions based on productivity…not office politics

Many other articles support these observations. John Kotter, Konosuke Matsushita professor of Leadership at Harvard University expressed, “Management is a set of processes that keep an organization functioning. They make it work today – they make it hit this quarter’s numbers. The processes are about planning, budgeting, staffing, clarifying jobs, measuring performance, and problem-solving when results did not go to plan.” All of these are processes are necessary in order to get an organization functioning.  However, the qualities to lead, to be a great manager, involve “aligning people to the vision, that means buy-in and communication, motivation and inspiration.” An inc.com article listed the following similar nine qualities that define great leadership:

·       Awareness

·       Decisiveness

·       Empathy

·       Accountability

·       Confidence

·       Optimism

·       Honesty

·       Focus

·       Inspiration

Similar qualities were mentioned in a Houston Chronicle online article. If one in 10 people possess these qualities, there is a strong possibility right now in work groups and in various sections in organizations that great managers, great leaders, are literally waiting to be cultivated. Have you recently identified these qualities in your managers? Do you see potential in certain workers? How does your organization cultivate leaders? Write to Astronology with your thoughts!

Neglecting Retirement Plan Fiduciary Obligations: Plan Sponsors have “Nowhere to Run”

Summary

Employers who sponsor defined contribution (DC) retirement plans for their employees select the plan’s broker, record keeper, and third party administrator (TPA) as well as determine the plan design, pick investment options, and educate employees about the program. These plans can be rewarding and beneficial for both employer and employee. Most such plans are, however, subject to the Employee Retirement Income Security Act of 1974 (ERISA) which imposes significant fiduciary obligations on the individuals serving as plan sponsors. In some cases the individuals can be held personally liable for losses.

The good news is that the government provides guidance for best practices which, if followed, significantly reduce plan sponsor liability. These practices address vendor selection (broker, record keeper and TPA), investment guidelines, and educational policy among other matters.

The article outlines the key points of a strong retirement program that will significantly reduce fiduciary liability.

Real World Risks

Three examples where plan sponsors failed to meet their ERISA fiduciary obligations:

• Flagstar Bank agreed to make a $3 million payment to its 401(k) plan for allowing investments in its own stock during the Great Recession, “when they allegedly knew, or should have know, that such investment was imprudent.”

• Coin Builders LLC of Wisconsin Rapids and its president was sued by the Department of Labor for improperly transferring $1.3 million in plan assets to a Coin Builders bank account. The president also allegedly handled plan assets without being bonded as required by ERISA.

• Engineering giant Bechtel has agreed to an $18.5 million settlement of an excessive 401(k) fee suit.

• The following retirement plan strategies may reduce the likelihood that these types of lawsuits will happen to your organization.

Core Elements of a Retirement Plan

All ERISA retirement plans must include:

• A written plan that describes benefit structure and guides day-to-day operations.
• A trust account that holds the plan’s assets.
• A recordkeeping system to track the flow of monies to and from the plan.
• Reports that furnish mandatory disclosures (e.g., fees)  to plan participants, beneficiaries, and government.

Who Will Manage Your Retirement Benefits Plan?

Selection of reputable and competent vendors and assignment of the right staff or board members are integral to implementing a compliant plan:

• Hiring outside professionals (e.g., investment advisor)
• Forming an internal administrative committee
•  Assigning management to Human Resources if applicable
•  A combination of the above

Six Important Rules for Fiduciaries of Retirement Plans

Following these six rules can help reduce fiduciary risk:

1. Act solely in the interests of the plan participants and exclusively for the purpose of providing benefits.
2. Act "prudently" and document decision making
3. Follow the terms of your plan (except where it conflicts with ERISA) and keep it current.
4. Diversify investments to minimize risk of loss
5. Pay only "reasonable" expenses and fees
6. Avoid "prohibited" transactions

The “prudent man rule” in ERISA requires fiduciaries to carry out their duties with the same "care, skill, prudence and diligence" as would a person who is familiar with the subject and has the capacity to understand the issues.

Document Your Process and Build an Inspection Ready ERISA File

Your assigned staff with the help of your broker/consultant should ensure that appropriate documentation has been kept on your process: An inspection ready ERISA file should include:

• Basic plan document w/amendments, adoption agreement, SPD
• IRS opinion, advisory, or determination letter
• Investment policy statement and ongoing IPC minutes
• Investment contracts, prospectuses, semi-annual reports
• Form 5500, summary annual report.
• ADP/ACP and other required tests
• Fidelity bond
• 404(c) documentation (regarding diversification of plan investments)
• 408(b)(2) disclosures & reasonableness determination of service providers (service provider disclosures of services, fiduciary status, and compensation)
• 404(a)(5) participant disclosures (plan sponsor explanation of fees and expenses deducted from participant accounts)
• Performance, monitoring, benchmarking, & fee analysis reports
• Education and enrollment information
• Qualified Default Investment Alternative (QDIA) determination (the account into which contributions are placed when no investment election has been make by the participant)

This article was written by: Bob Trobe, Managing Director at Crystal & Company. For more information please contact Bob at 212.504.5960 or robert.trobe@crystalco.com

Do Your Teams Have the Qualities Necessary for Success?

Whether it’s every day or for a special project, at some point of time we all have to do some form of collaborative teamwork. Some people dread this, others look forward to it. What are some qualities to instill in your team in order to ensure success? Astronology covers five critical qualities of a successful team.

Communication:

                

Clear consistent communication is extremely important. There is nothing worse than when team members don’t feel comfortable voicing their opinions and ideas.  Open and clear communication has to be promoted within the group. Having a facilitator for brainstorming sessions will be helpful in enforcing this. Facilitators have to be mindful to encourage all participants to contribute and, more importantly, acknowledge each contribution given. A facilitator also has to guide the selection of the best solution / process for the team. Recording meeting sessions via notes and sending these notes afterwards will also promote clear communication.

Active Listening:

Hand in hand with clear communication, team members must practice active listening. This form of listening is important because it can create meaningful dialogue when it comes to deliberating on a decision. Active listening requires team members to listen with the intent to understand, not with the intent to respond. This will allow the speaker to freely voice his / her thoughts and, most importantly, allow the other team members the chance to thoroughly think about what is suggested. This also means dismissive attitudes cannot be tolerated. An effective technique to use in order to encourage active listening is, after a suggestion is made, or a thought is shared, a team member – preferably the facilitator – repeats what has been said in order to verify that everyone has the same understanding.

Commitment:

Although ideally we would like to think that everyone on a team is committed to the assignment, unfortunately this is not always the case. A starting point for success is the commitment level of the team leader or facilitator. A Forbes online article on the top qualities of a great leader stated that “There is no greater motivation than seeing the boss down in the trenches working alongside everyone else, showing that hard work is being done on every level.” As a team leader / facilitator, are you also assigning yourself tasks when it comes to delegation? Does the rest of the team see that you are also hard at work? Your demonstration of your sense of responsibility will echo to your team and can encourage everyone to take their roles more seriously.

Respect and Support:

Two other key qualities are respect and support. If a team leader can’t demonstrate respect and support to a teammate, nothing will be accomplished. Team members won’t feel free to express themselves, and team morale will lower significantly as a result. One articled suggested that team members, “…don’t place conditions on when they’ll provide assistance, when they’ll choose to listen, and when they’ll share information. Good team players also have a sense of humor and know how to have fun (and all teams can use a bit of both), but they don’t have fun at someone else’s expense.”

All of these qualities contribute to positive team morale and effectiveness in handling team assignments. There may be additional qualities, however, that other teams may value more than ones mentioned above. What qualities do you value in a team? Write to Astron and share your team’s keys to success!

No Vacation Nation?

In our last Astronology, we discussed work / life balance in America, with a primary focus on the negative outcomes from improper balance and what some employers are doing to combat them. In this issue of Astronology, we’ll explore a key component of work / life balance – the vacation policy.

‘No Vacation Nation’

Did you know that America is considered the “No Vacation Nation”? CNN reported in a 2011 online article that roughly 57% of U.S. workers use up all the vacation days they’re allotted. As mentioned in our previous article, employees can be overworked from not taking adequate breaks or rest from work. The results from workplace stress can impact an organization so much that absenteeism increases, employees have lower job satisfaction, and eventually, employees have a lower commitment to the organization overall.

Under federal law United States employers are not obligated to offer any paid vacation. Although many organizations aren’t required to give vacation time, however, it doesn’t mean they don’t offer it. A Center for Economic and Policy Research report states “Almost one in four Americans (23%) have no paid vacation and no paid holidays.” This means that a significant number do enjoy time off benefits.

Although the number of Americans that are offered paid vacation is quite large, when comparing the amount of days given for vacation time, we see surprisingly that the typical U.S. worker at a private company gets 10 days of paid vacation and six paid holidays per year. In contrast, our European counterparts are required by law to set a minimum of 20 days paid vacation per year for employees. In recent years, however, the US approach is changing, as organizations are creating unique vacation policies. Take a look at what the following organizations offer, for example:

• Paid, Paid Vacation: A cloud base contact management for individuals and business organization, FullContact offers its employees once a year, $7,500 to go on vacation…and completely disconnect from work (no emailing!). 
• Two Weeks Paid Vacation and Use of Services: An online social network designed to help travelers find free local accommodations, CouchSurfing not only offer employees two weeks of paid time off, but also encourages usage of its own services in order for employees to have a vacation. 
• One Week Off and Additional Spending Money: The CEO of Evernote offers employees unlimited vacation time and $1,000 spending money to take off at least a week at a time. 
• Unlimited Vacation: An online book retailer, Chegg, lets its employees take as much vacation as they choose.

The reality for many organizations is that offering unlimited vacations and additional money is not feasible. But all organizations can find unique ways to promote a healthy work / life balance. Have you looked into ways you could possibly do so? For instance, here at Astron, during the summer months, employees are offered ½ days on Fridays. This allows employees to take advantage of fun events that occur here in New York during the summer, as well as give employees a satisfactory pause from their usual routine. As always, if your organization offers anything unique in regards to vacation policy and work / life balance, Let us know and we’ll gladly share your thoughts here at Astronology.

Work / Life Balance Keeps Your Organization Strong

Have you heard?  The OECD Better Life Index ranks America low in terms of work / life balance. This is no surprise to many.  Currently, close to 30% of Americans work weekends.  We also tend to work longer hours than employees in many other advanced countries. So what does this mean to Human Resources?  Plenty.

            

Improper balance between work and life can only lead to one thing… workplace stress. For Human Resources, workplace stress means dealing with a host of employee issues, namely:

• Increased absenteeism

• Decreased productivity

• Underperformance in work

•  Low job satisfaction, resulting in low employee commitment

Inc.com notes that with easy access to work, with our smartphones and laptops, unfortunately it is easy for employees to become overworked. Personal and work lives blend together, instead of ideally being isolated. So what is an employer to do? How does Human Resources promote effective work / life balance, for engaged, dedicated employees?

Some organizations have taken non-traditional measures. For instance, Reed Hastings, founder of Netflix, promotes a “freedom and responsibility” culture within his company. A facet of this culture is its vacation policy…which doesn’t exist. “We focus on what people get done, not on how many days they work,” Hastings said in a Bloomberg Business Online article. “Prior to 2004 we had the standard vacation model, until we realized no one was tracking how many hours in a day they worked. Why were we tracking whether someone takes two weeks or four weeks of vacation?” Hastings noted that this tracking attitude developed, and has been maintained to this day, from the industrial era.

Perhaps, he is correct. IBM is another company who is well known for having an unconventional vacation policy. In particular, employees are allowed three or more weeks of vacation, but IBM doesn’t keep track of who takes how much time or when. Employees at all levels make informal time off arrangements with their direct supervisors.  The overall arbiter is if the employee can handle getting his / her work done on time with the time off.  If a workplace emergency occurs, there is usually a form of contact available. This contact aspect of the vacation plan does add pressure to some employees. A 2007 New York Times article notes that employees will sometimes feel peer pressure to check their e-mail and voicemail messages while on vacation.  Supervisors can sometimes ask subordinates to cancel days off to meet deadlines. Like Netflix, however, the real consideration for IBM’s vacation policy is whether the employees can handle the workloads they have, despite the time they take off.

How about you? What policy or plans does your organization have to promote a healthy work / life balance? Is it an area of consideration in your human resource strategy? Let us know and we’ll gladly share your thoughts here at Astronology.

What’s Happening with Employment in 2015

While it’s been over five years since the Great Recession, a continuing aftershock from 2009’s economic struggles includes the thinking pattern of potential employees.  A 2012 Forbes online article mentioned the number of temporary or contract positions available was up 6% from 2011’s figures. In this same article it was noted that over 40% more people held temp jobs in 2012 than in 2009. What does this all point to? There is the possibility that candidates have moved from looking for a career and to looking strictly for jobs.  According to Jennifer Loftus, National Director of Astron Solutions, “this switch from careers to jobs signals challenges for employers.  We expect employee engagement levels to potentially decline, as employees move into a more transient mindset vis-à-vis their employers.”

An August 2014 Fortune online article highlighted that 86% of job seekers who are currently employed are looking for work outside their current occupations. The article quoted Tara Sinclair, an Indeed.com economist, saying, “We expect to see that as the economy improves, more job hunters will try to move into something that’s closer to their ‘dream job’.” Another concern to keep in mind is that millennials continue to enter the workforce. The trend is for 91% of millennials to stay less than three years in a job, with 54% wanting to start their own business – and many have already have done so. So what does this mean for Human Resources?

Quite possibly the dreaded three words: high turnover rates.  On the NBC news online economy watch page, Joel Naroff, President of Naroff Economic Advisors, mentioned, “Once job growth picks up and the unemployment rate comes down, it’s ‘Take this job and shove it’ time and the turnover is going to be massive because everybody has been dumped on for the last five years. For those businesses (in which) turnover matters, it’s going to kill them.”

What are some organizations doing to combat the possibility of waves of turnover? The short answer: money. Tara Sinclair mentioned in Indeed.com’s research, “As a rule, our research showed that people who are already in highly paid occupations want to stay in their current fields…money isn’t usually what attracts people to a job, according to our findings, but it can be very useful for retention.”

Another option is flexibility. “Highly skilled employees, such as in tech and mathematics, are especially interested in flexibility…even those who are employed full-time right now are searching our site for part-time jobs, and for companies that allowed flexible arrangements like job-sharing,” according to Sinclair.  Millennials are another group that considers flexibility important. Roughly 45% of Millennials will choose flexibility over pay when selecting between employment offers.

Has your organization observed a spike in turnover? Have you noticed other trends as an aftershock from the 2009 Recession? Has your organization found solutions to these HR challenges? Please share with us! We’d love to feature you in a future issue of Astronology!

The Best and the Worst of the Interview Questons

Interviewing a candidate for a role at your company can be an exciting time, but it also can be a tough one. Everyone tries to figure out the best things to ask, the questions to avoid, the way to avoid the painful questions and the best way to pull out thought-provoking questions. So I've thought about it a lot and I wanted to go through some of the best and some of the worst of the interview questions I've received, heard, or read about:

"Why do you want to work here? (and, if applicable, why do you want to leave where you currently work?)" 

I love this one and the question too often gets overlooked or underasked. Too many candidates mass apply to jobs online and have no clue what the heck they're applying to most of the time. During the financial crisis, I interviewed a ton of candidates, who, when I asked them this question, answered for me why they want a job, but not why they wanted the job I was offering. Also, if the person is currently employed, finding out why they would take the leap to join you is really enlightening. Sometimes, if you give a candidate enough leash, they'll say too much during that second part and you'll realize that they're not a good fit.

"Are you more of a hunter or a gatherer?"

I hate this one. Unless you're applying to a job in agriculture, what the heck is the point in phrasing it that way? This was among Glassdoor's Top 25 Oddball Interview Questions from 2014 as a question asked by Dell and I really do wonder what hunting and gathering Dell employees are doing. I do understand the point of the question, but there really has to be a better way to ask it.

"On a scale of 1-10, how lucky are you?"

I was asked this in my last job interview and I just saw it appeared, in a similar form, in the Glassdoor rankings as asked by Airbnb. I sort of like this one, though, I go back and forth on it. On one hand, I like that it pries a person to answer a bit honestly and outside of their resume, but on the other hand, my luck in my job life is not the same as my luck in my personal life and this can be really uncomfortable for some people.

"What's your greatest weakness"/"Where do you see yourself in 5 years?"

I hate both of these with a passion so I figured I'd lump them together. My greatest weakness is my inability to hide my disdain for your question and I see myself in 5 years hopefully answering much more important questions. NEXT

"I have a brainteaser for you..."

Once Google decides they're total wastes of time, as their Senior Vice President of People Operations, Laszlo Bock, described to the New York Times in 2013, you should as well.

"This job requires you to multitask and balance a bunch of ASAP deadlines at once--can you tell me how you will go about prioritizing that if we hire you?"

One that I asked and asked and asked at a previous job. And I almost stopped asking it until the perfect candidate answered it correctly. Incorrect answers including saying that she would prioritize bigger (or higher revenue) clients over smaller ones, that they had no clue since they didn't work there, or that they would ask me every time (I gasped at that one). The best candidate told me that she would work with the team and the clients to make sure she understood exactly when everything actually needed to be returned--and that she would make sure to communicate with everyone involved as it was getting closer to the deadline. She got the job (and still works there).

"What single project or task would you consider your most significant accomplishment in your career to date?"

I have to admit that I didn't love it when I first heard it in interviews but I warmed up to it and then I read in Inc. all the reasons why it's the best interview question and, while I don't think it's THE BEST, I have to agree, it's definitely one that you need to ask. The great part about this question, for me, is that I don't have an answer predetermined. I actually come up with a new one every time I interview, and try to adapt that answer to what would be most relateable to the job I'm applying for at the time.

"What would you like to tell me about you that is not on your resume?"

Since I told you which I thought wasn't THE BEST, I will now tell you my favorite. I got asked this in a job interview one time and I don't think I've left it out of any job interview that I've conducted since. I love it because the candidate can make what they want of it and can really get a chance to express themselves outside of a piece of paper.

It also shows a bit of how someone can think on think on their feet. One candidate told me that everything was on the resume that I needed to know (he didn't get an offer). One told me that there was a job missing because he really didn't like the boss and sued the company afterwards and didn't want me to call for a reference (he didn't get an offer). But one candidate told me that she was hesitant to put that she also volunteered to coach soccer on the side and would be a great addition if we had a company kickball team (she got an offer).

The key isn't to stump the candidate--it's to make them think, make them talk, and see how they answer questions. If you ask all generic questions, you can't be upset getting all generic answers. And if you ask stupid questions, you should not be surprised by stupid answers. The key to an interview is allowing a candidate to give you a view into their person--figure out the best question that you can ask to help them reveal that.

When That Layoff Memo Backfires

One of the most unfortunate parts of the past 7 years or so is that most of us have either been laid off or had a close family member laid off. It's a really tough time for everyone, from the person who gets the axe to the person giving the pink slip to the people who are left behind after a big round of layoffs. And while laying off employees is never a good experience, there are certainly better ways to do it than others.

I've heard of one bank who let employees know that they had been laid off when their keycard didn't work in the morning.

I've heard of small businesses where the owner lets all the employees go without any severance and walks away with a big fat check.

We've all heard of the CEOs who take the nice Golden Parachute and leave their employees struggling to pay their bills.

And then, as New York Magazine wrote in July, there was Microsoft who sent one of those memos that should have never been sent. It starts with "Hello there" and, amazingly, with that ridiculous intro, goes downhill from there.

We plan to right-size our manufacturing operations to align to the new strategy and take advantage of integration opportunities. We expect to focus phone production mainly in Hanoi, with some production to continue in Beijing and Dongguan. We plan to shift other Microsoft manufacturing and repair operations to Manaus and Reynosa respectively, and start a phased exit from Komaron, Hungary.

The emphasis in there is mine but five layoff buzzwords in one paragraph is impressive, especially considering that the rest of the ~14 paragraph e-mail has some other ones dropped in as well. The breakdown of the article itself is great, and, overall, the memo isn't that bad compared to some that have been sent over the past 7 years.

But the point is that memos like this NEVER need to be sent. Why put something like this in writing that can be ridiculed outside the company and provide no comfort for anyone within the company (either laid off or left behind)? I understand there's no efficient way to lay off 18,000 employees (or 12,500 within one business unit), but laying off people through a poorly constructed memo just adds to the pain these people are feeling--and it allows it to be put out there so future applicants think twice before working for you and your organization.

Organization Design for Business

Is your organization doing everything it can to succeed in this VUCA (Volatile, Uncertain, Complex, and Ambiguous) economy?  Are you sure?

Is your organization properly designed to meet your goals?  Are your marketing, financial, and manufacturing strategies fully aligned with your overall strategy? Are your structures and processes fully aligned with your business plans?  Are your accountabilities and authorities aligned with your processes? Do you have the right jobs and skill sets in your organization?  How do you know?  Because you completed a review last quarter?  What about tomorrow? These issues may be costing you money and negatively impacting your operational capability.

What is Organization Design?

Organizational design is the way your organization is structured to comply with the strategic plan.  It is the link between your business goals and how managers & staff achieve those goals.  It helps achieve full alignment between your overarching strategy, your structure, and the key functions & roles in your business.

Organization Design focuses on the proper assignment and division of labor; establishing the appropriate level of coordination, control, authority & responsibility; and designing jobs that match the needs of your organization and the skills of your employees.

Effective organization design drives productivity, communications, and innovation.  It creates an environment where people can work effectively. 

When Should I Review my Organization?

Today!  Symptoms of ineffective organization design to look for include the following:

§  Poor inter-office coordination

§  Excessive friction and conflict among internal groups

§  Unclear roles

§  Misused resources

§  Poor work flow

§  Multiple Boss Syndrome

§  Reduced responsiveness to change

§  Proliferation of extra-organizational units such as task forces, committees, and projects

What Does an OD Project Look Like?

Organizational analysis involves reviewing your vision, mission, & strategy; assessing your current structure relative to your mission & strategy; drilling down to departmental levels to understand how units function; and addressing challenges & opportunities.  The objective is to improve performance by evolving from your current state to a desired future state.

Tips and Best Practices for a Successful Re-organization

1.   Problem Statement: Define your business needs, internal & external challenges, and organizational objectives.  What exactly are you trying to fix?  What is your ‘desired state’?

2.   Conceptual Business Model: Look in the mirror.  Outline your organizational strategy, resources, inputs, major functions, and outputs (products & services) in a clear & concise model.

3.   Design Principles: Create a set of design principles at the start of the project.  These are attributes that your new organization must have.  Examples include service excellence, process efficiency, business process ownership, P&L accountability, and implementability.  These become your evaluation criteria.

4.   Workflow: Map out the major activities and steps in your key business, discipline-specific, & administrative processes.  Identify and link the key roles (jobs / positions) that perform each step.  These become the building blocks and architectural platform of your future organization.

5.   Organizational model options: Create several potential ‘to be’ states divided into three groups; A. minor change, B. practical and realistic change, and C. radical ‘outside the box’ change.  Quite often the ideas generated in Group C will prove to be effective in a Group B option.  Evaluate the relative advantages and disadvantages of the options using your design principles / criteria.  Select a winner.

6.   People: Assess the “people impact” of changes.  Prepare a People Plan and take steps to address potential retraining, re-assignment, replacement, and recruiting needs.  Be open to the need to design a function or a unit around the skills and attributes of the incumbents – as opposed to what looks best on paper.

7.   Systems and Processes: Focus as much on how the new structural model will work as on what it looks like.  Ensure that systems and processes are fully integrated with the re-design. 

8.   Culture: Be aware of your organizational culture (unwritten norms and behaviors). Ensure that the re-design is in sync with your culture.

9.   Change Management: Expect management pushback and employee resistance to change, and plan accordingly.  Appoint a senior executive as project champion.  Develop a clear communications plan and adhere to it.

10. Implementation: Pay attention to how the re-design will actually happen. Prepare a detailed implementation plan and hold people accountable.  Address risks and bottlenecks as early as possible.

11. Beware of Entropy.  Entropy is the silent killer of organizational performance.  It is the measure of the disorder of a system, a natural process of degeneration, an automatic and unavoidable trend toward chaos.   The alignment of functions, positions, skills, processes, human talent, and performance to business priorities deteriorates over time and we don’t see it.  The cure is maintaining full alignment between your organizational strategy and your structure & processes – in other words – organization design.

Tim McConnell is the Managing Partner of McConnell Consulting (Organizational Architects) Inc. in New York.  More information can be found at www.McConnellConsulting-NY.com.

When "Unlimited" Vacation Time Doesn't Work

Vacation time is one of the top perks of some organizations. 3 weeks? 4 weeks? 6 weeks? What about "unlimited" or "flex" vacation times? Well a big trend recently is that move to unlimited vacation time, especially for start-ups. I mean what's better for a relaxed office environment than being able to take off whenever you need.

Well, as NYMag.com writes that unlimited isn't actually "unlimited". In fact, when given the opportunity to take off an "unlimited" amount of time, most employees take off very little. Instead of having everyone take off the same amount of time, no one wants to come out looking like a "moocher".

Banking away your vacation time can be annoying, but it does make you feel as if you've "earned" those days off; they're yours to spend as you wish. Compare that to a proposed (and quickly reversed) policy at the Los Angeles Times, which would have done away with all paid vacation, sick, and personal days in favor of an "unlimited" paid time off system — but one in which each day off would be at the discretion of the employee's supervisor, which would undoubtedly have led to employees taking less time off since each attempt to do so would entail a potentially awkward conversation.

Bingo. If you "earn" your vacation time, you can easily ask for it off. If it's unlimited, it makes it a lot harder. I currently work at a place with unlimited vacation time but few will take off more than a week or two. And since everyone is doing that, you don't want to be the guy taking 4 weeks.

Of course, that's not the culture everyplace--I spoke to one person who work at an unlimited vacation company and she said that everyone ends up taking between four and six weeks. But that was something that everyone knew was okay and everyone, more or less, held up their end of the bargain.

Two ways to ensure that, the article writes, is to have employees forfeit a bonus if they don't take off a certain amount of time or writing a minimum vacation time policy in the employee manual. Any way you go, if you're going to institute "unlimited" vacation, make sure your employees understand what that means.

Employee Engagement in 2015

According to a study conducted by SilkRoad, 49% of 150 surveyed HR professionals noted that engaging and retaining employees was a concern.  52% of those surveyed mentioned that creating an attractive and engaging organizational culture was also a concern.

Even the government is having concerns with employee engagement. A December 2014 Gallup poll reported that 27% of federal workers are engaged, 53% are not engaged…and an additional 19% are actively disengaged.  Lack of engagement from these workers can cost taxpayers an estimated $18 billion per year!  So what can be done to improve employee engagement and retain talent?

Set Challenges / Achievable Goals

What is the purpose of the organization? How does the employee see where his / her actions affect the purpose and goals of the organization? A good way to keep your employees engaged is to help them see where they fit within the organization and grow professionally.  Do you have a talent management system to record not only performance reviews but also goals? Are those goals progressive? Are they feasible?  Did you include the employee in making those goals? All of these factors matter when setting goals that help an employee to feel involved and motivated.

Communication

Communication is closely tied to setting challenges and goals. How does your organization communicate? Is it strictly e-mail? Do you combine communication methods depending on the message? Do employees have a means to have their voices heard? How do you ensure that their input has been / will be considered? Employees should feel open to voice their concerns about their positions, the state of the organization, and their growth within the organization. The employee should be aware of the organization’s expectation of him / her…and the organization should be aware of the employee’s expectations.  Such open communication allows for a cohesive environment.

Promote Work / Life Balance

Besides feeling part of an organization and feeling fulfilled in their position, employees also need proper work / life balance. Although a big part of this involves the employee’s being aware of his / her own limitations and home responsibilities, organizations can do their part in promoting proper home / life balance. Forbes magazine online highlighted a Glassdoor.com report on the top 25 employers for work-life balance. Samantha Zupan, a spokesperson for Glassdoor, pointed out that everyone’s key factors in work-life balance are different. “For example, what work-life balance is to a young single person compared to a parent with two young children can be very different.” Appealing features of employers that made the top 25 were the following:

• Option to telecommute
• Paid Time Off
• Compressed Work Weeks
• Family Friendly Work Environment

Zupan also mentioned that top ranking employers also offered fitness amenities. A big stand out option for many of these organizations was the senior leadership’s support of proper work / life balance.  Obviously not every organization can offer these options. But can some of these options be offered, even if only temporarily? For instance, during the holiday season can employees be offered a certain amount of time to telecommute? Are there options for flexibility in work schedule during the summer months?

As always, Astronology enjoys hearing from you! Does your organization have different strategies or features to keep your employees engaged? What features are you looking forward to implementing in 2015? Contact us to share!