TOO MANY BOSSES, TOO FEW LEADERS: Building Strong BONES

RAJEEV PESHAWARIA

FREE PRESS; 222 PAGES

PART 2: ENTERPRISE LEADERSHIP

2.3          B-B-N: Building Strong BONES

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BONES refer to the organizational design of the company.  This is the formal organizational structure and the division of work among individuals and groups.  NERVES on the other hand, are the informal setup, the culture of the organization.  BONES create a structure for executing a strategy, and NERVES create a culture that enables long term excellence.  Most leaders eventually get their strategy right, but fail to execute or create long-term growth because of inadequate attention to BONES and NERVES.

Leaders need to create an organizational structure that best serves flawless execution of strategy, than ensure each job is filled by the right person, and finally create supporting systems and processes that drive performance.  Many people make decisions based on power and politics rather than actual business needs.  Even in the age now, compensation is still determined largely based on the ‘scope of position’. i.e. the number of resources directly under the command of the position.  Thus, an executive will not willingly gives up resources when he doesn’t need them.  This will further cause executives playing turf-protection game when it comes to proactive transformation.

Strategy is about making choices.  It provides a prioritization and decision-making framework.  There is no perfect formula for determining the size and design of an organization.  Leaders must continue to fine tune until they get it almost right.  Organizational design is an ongoing task, so the key point is to keep the big-picture strategy in mind while making resource allocation decisions.  Creating the right organization structure is like balancing your personal budget.  Resources are always constrained and it’s a matter of making strategic choices.

Jobs need to be filled with the best available talent.  Too many people are hired every day without enough clarity on what is expected of them.  Most competencies model look at past’s success.  Such ‘look back’ models don’t really hold true.  Performance expectations should therefore be defined in terms of input.  Few tips for hiring:

·        Define performance expectations for each job

·        Hire for desired performance outcome

·        Be prepared to admit mistakes and rectify them

There are 2 important systems that should be created to encourage the desired behaviour:

PERFORMANCE MANAGEMENT	PRO MOTION
What get measured, gets done	Reinforce desired values
Give adequate thoughts on how performance will be measured	Track-record of value-based behaviour before promoting
Measure both commercial goals and values	People who are not ‘culture carriers’ are given messages to that effect when they are due for a promotion
Define individual performance on 2 levels -          Commercials goals -          Values	Ask to demonstrate living the business principles before being promoted
Agree on what need to be achieved
Agree on how it will be achieved
Exchange feedback about performance

THE BASIC PRINCIPLES OF SOUND ORGANIZATION DESIGN

Having the right people in key jobs

Designing and maintaining a nimble and efficient organization structure

Establishing supporting systems like performance measurement

While the Brains tell the organization what to do by way of mission and strategy; while the Nerves tell the organization how to behave by way of cultural ethos; it is the Bones that enables execution that is the structure and supporting systems and processes.  So, leaders are advised to keep an eye on the Bones all year round and not delegate it to HR.