A weak system often starts at the top of the organization with a lack of clarity of the differences in accountabilities between a Board of Directors and a CEO. A disconnect may also exist between the strategic planning system at the top of the organization and a performance appraisal system at the middle and lower levels of the organization.

Think about your own organization. Is there a lack of clarity about the role of each manager related to direct reports? Is there a lack of clarity about the unique contribution that each level in the organization should be making? We often find, for instance, that little consideration is given to the real time frames required for significant work; everyone – regardless of the position they hold in an organization - has a one year plan. Not surprising that many organizations fail to deliver superior performance with this abundance of handicaps.

What can be done to fix them?

Ensure that positions and accountabilities are properly aligned.

The first step is to ensure that positions are properly aligned. This provides the spine of the organization. If the spine is misaligned, the accountability framework by definition will be suboptimal. In particular, there is a method called time span analysis that can help determine how many layers an organization should have, ensure that every position is in the correct layer, and determine the time span of work that should be done at that level. The basic idea is that positions are higher up in an organization should have more complex accountabilities that have longer time spans.

On this organization spine, accountability and authority start at the top of the organization and are delegated down. Each level should have a prescribed range of time spans (accountability with the longest target completion time). This can range from five, ten or 20 years for a CEO down to one day for some first line employees.

Longer term accountabilities can include product development, territory development, integration of mergers and acquisitions, and implementation of major systems across an organization. These should be specified and measured. Due to the short-term orientation of many organizations, these longer accountabilities are not properly specified, to the long term detriment of the organization.

Develop an integrated business planning and review system.

A business planning and review system should be developed for the whole organization that integrates existing systems into one system (e.g. strategic planning and performance appraisal).

Each manager (from the CEO on down) should be accountable, doing stratum appropriate work himself or herself; setting context and prescribed limits for direct reports; delegating time span appropriate accountabilities; and ensuring appropriate resources and authorities. Each level in the organization should provide unique added value.

Each manager should have a business plan which should be within the context and prescribed limits provided by one’s immediate manager. Each manager’s business plan should include vision, mission, values (these tend to be common across an organization), strategic positioning, operational plan and resource plan. Strategic planning is too important to just leave to senior executives.

The Board of Directors should be accountable for ensuring optimal organization design.

Most Boards of Directors and Senior Executive Management Teams spend considerable time on strategic planning, but very little on ensuring that the organization design (e.g. alignment of positions vertically and functionally) and business planning and review systems are optimally designed.

The significant focus on one - without a commensurate focus on the other – is, at best, suboptimal and at worst, a waste of time and resources.

Indeed, one of the greatest challenges facing an organization
is to get each level performing the added value work that they are uniquely capable of doing. There is a strong tendency for each level to focus on lower level work, and not add value commensurate with their level in the organization. This, of course, is a significant waste of money. A business planning system that is built on a strong organization design aligns the deliverables of each role and assures the right complexity of work.

Claude Lamoureux, President and CEO, Ontario Teachers’ Pension Fund, has said “CEO’s should be accountable for developing, implementing and maintaining superior organization designs. Boards of Directors should be accountable for ensuring that this happens.”

An organization capable and committed to developing a robust and flexible accountability framework on the spine of a strong organization design can help everyone perform the right work,
at the right level, in a consistent direction. This commitment to accountability is fundamental to driving superior organization performance.

Email us at info@capelleassociates.com, or call us at
416-236-3044 to learn more about how you can use Organization Design to further enhance your business
success.

©2005 Capelle Associates Inc.                        Terms of use