critical elements

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Critical Elements of an Organization


Business Model

The business model describes why your organization exists and how you will achieve your business objectives. It normally includes the vision, business strategy and business outcomes (why you are in business); how you add value to your clients (client segments, value propositions, client experience models), and how you will achieve your objectives (revenue streams, delivery models, performance models and targets).


Organizational model

Your organizational model should be consistent with your business model. If your business focuses on manufacturing, then creating an organization structure centered on the business process or product lines is likely the right one. If you are providing services, then the organization could be structured around service offerings, client segments or the service delivery process. The organization could also be structured around the functions of the organization (for instance, marketing, operations, product development, channel management, etc.), or around key positions (for instance chief customer officer, chief operating officer, chief financial officer, etc.).

Attributes of an effective organizational model include:

Flexibility to easily adapt to changing business requirements
Rapid effective decision-making with line of sight between decisions and outcomes
Disciplined business and management processes which eliminate non-value added steps
Clearly differentiated roles, jobs and competencies derived from the core business processes
Leveraged technology to automate repetitive tasks and procedures and maximize employee productivity and creativity.

Governance

Governance is the glue that holds the organization together. Governance brings together the authority, accountability, resources and results at the decision-making point. Governance provides the means for assigning tasks and following through on the actions that will generate the expected results. Some of the governance processes include performance management and reporting, strategic planning and investment, policy formulation, partnership management and resource allocation. Governance is often represented through reporting relationships and executives/management committees.


People components

People are the most important asset of organizations. Successful organizations need sufficient people with the right talent and competencies, assigned to meaningful roles within a culture that is respectful, innovative, performance-driven and collaborative.

Culture - is to the organization what personality is to the individual; it is the pattern of shared beliefs, values and assumptions that are acquired over time and shape behavior. Culture embodies the unwritten rules and norms which govern the collective behavior of the organization. Culture determines the way things are done around the work place, how decisions are made, how clients are taken care of and how employees are treated. Desired cultural elements generally include respect, teamwork, collaboration, innovation, results/outcomes driven, and client-centred.

Roles - are the foundation blocks of jobs. Roles are directly linked to the business or management processes and each role has tasks, outputs, levels/standards of performance and relationships to other roles. Roles are aggregated into jobs; a role can be assigned to multiple jobs. (for instance, the financial analysis role can part of the budget manager job or the auditor job).

Jobs - are assigned to people. Many people can perform the same job (for instance auditor, salesperson, client service agent). A job description includes the sum total of the tasks of all roles assigned to that job, the conditions under which the job is performed, the performance level expected, the outputs produced, the reporting relationships and the competencies required to perform the tasks.

Competencies - describe the skills, knowledge, abilities and attributes an organization's workforce must possess to perform the business process activities and to execute on the organization's strategy. Competencies form the basis for the management of talent the organization needs: for recruiting, promotion, job assignment, training, compensation and career progression. Typical competency cluster include business knowledge, technical, functional and management skills, professional qualities, and personal attributes.



Business and management processes

Processes outline the steps and activities, their sequence, the triggers for action, inputs and outputs of all the activities required to produce the desired outcomes. Core business processes describe the various activities that are essential to deliver the client value proposition and experience. Processes give the organizational structure purpose and meaning and provide the basis for defining the roles, jobs and organizational structure.


Technology and infrastructure

The technology and infrastructure describe the interplay between the various components of the systems, applications, tools and layout that support the mandate and outcomes of the organization. The technology and infrastructure components enable the business processes and the performance of employees and optimize the facilities, layout and ergonomics of the workplace. Examples of technology include financial management, human resources management, performance management and analytics systems; operational technology and productivity tools; and network and communication capabilities, equipment and tools. Facilities include the location, safety and workplace design aspects of the work environment.