By Barry Jaruzelski, Vice President and Managing Partner, US Communications & Technology Practice, and Frank Jones, Vice President and Managing Partner, US Operations Practice, BOOZ ALLEN HAMILTON INC.
The struggle to do more with less is universal, and companies everywhere are transforming their operating models to refocus on the customer and extract next generation savings. Overhead costs are a primary and persistent target of these reviews, but traditional supply-side reengineering techniques have been largely tapped.
Our recent client experience suggests that managing the demand for overhead services yields as much, if not more, in terms of benefits. Using tools such as customer segmentation, tailored business streams, and business process outsourcing/offshoring, companies are transforming their organizations from the inside out to better adapt and respond to the rapid changes in their external marketplace.
To effect this transformation, companies are redefining their "organizational DNA" -- that together define the unique attributes and performance of a company. We describe the DNA of a living organization as having four bases that, combined in myriad ways, define an organization's unique traits. These bases are:
Structure. What does the organizational hierarchy look like?
Decision Rights. Who decides what?
Motivators. What objectives, incentives, and career alternatives do people have?
Information. What metrics are used to measure performance? How are activities coordinated, and how is knowledge transferred?
Organizations whose DNA is poorly configured will exhibit dysfunctional symptoms and counterproductive behaviors. For example, when decision rights are unclear or ill-defined, organizations often develop redundant "shadow staff," or excessive middle-management layers with narrow spans of control. While no company may ever completely master the enigma of execution, the most resilient and consistently successful ones have discovered that the devil is in the details of organization. For them, organizing to execute has truly become a competitive edge.