Disciples Preach Organization Design
(a summary of an article published in the Globe and Mail, October 11, 2000)

An executive vice-president at the Bank of Montreal says his decision to invest in organization design has paid off handsomely for his company.

Several years ago, Rob Pearce, who heads up his bank’s North American electronic banking services, felt that he needed to change how work was done within his division.

He called upon Dr. Ron Capelle, an expert in organization design, to study and help overhaul the division’s job and reporting structures.

The result of that work, said Mr. Pearce, is the best employee commitment scores in the bank and strong customer service ratings. “We made a few shekels along the way,” he added.

Mr. Pearce’s experience appears to be typical among executives who have paid attention to organization design. Dr, Capelle’s firm - Capelle Associates Inc.- conducted a survey, in partnership with the Globe and Mail, that found a positive statistical relationship between organization design and financial performance. Organizations with stronger design –consistent with Dr. Capelle’s model – tend to show better customer and employee satisfaction and healthier financial results. Those with weaker designs don’t do as well, the survey found.

Mr. Pearce says much of his division’s work in reorganizing its design involved carefully defining each job, and then matching the available talent to these positions. He said the most positive results were observed in a certain kind of an employee – a “journeyman” type who is extremely loyal but drifting in his or her career.

“We put these people into well-defined jobs and watch them flourish,” he said.

Derek Fry, president of Visa Canada Association, says that he is “absolutely convinced our organizational performance has improved” after working with Capelle Associates Inc.

The work of Capelle Associates Inc. is largely based on the research of Elliot Jaques, a Canadian-born theorist who has gained international attention for his analysis of work, jobs, and reporting structures.

According to Dr. Capelle, the Jaques’ method provides tools that help organizations solve their thorniest issues, such as:

• Determining the best number of layers for the organization
• Identifying when employees are ready for promotion
• Determining the correct layer for each manager

Dr. Capelle said deciding the correct layer for each manager is particularly critical to an organization’s success. A manager should be exactly one layer above a direct report. If the two are working on the same layer, the manager will micromanage and the employee will underperform. If they are more than one layer apart, the employee will not get enough direction.

“The vertical alignment of positions in an organization is the spine on which everything else is built,” said Dr. Capelle.

see also Management Gaps Can Prove Lethal
If you are interested in ordering print copies of the complete article summarized above, please email info@capelleassociates.com

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