HR, Legal, and IT Oh My. The Role Of Social Business

July 6, 2012 Comments
HR, Legal, and IT Oh My. The Role Of Social Business

Social Business is about evolving an organization to achieve traits like agility, adaptability, connected, and engaged.  To accomplish this fully requires undertaking a set of complimentary efforts, one of which is looking at the overall design of your organization, recognizing those elements that will hinder your journey, and devising means of overcoming them.  As you develop a change management plan, one of the areas that needs focus is organizational design and the operational/infrastructure groups.

Often the supporting roles in an organization (those that provide company-wide operational and infrastructure functions) tend to be perceived by the workforce as anything but supportive.  There are many reasons for this, but let’s narrow in on some of those higher level functions that interact the most with divisional units.  Those like HR, Legal, and IT.

Problem 1: Who Are They Supporting?

While these groups certainly ‘support’ the departments in the sense that they provide services to them that they would otherwise have to do themselves, what you most often find is an antagonistic relationship.  This is predominantly because a parent-child notion of support has evolved, with the infrastructure in the role of the parent and the department that of the child.  IT, HR, Legal, etc. can take the position that they are in possession of a privileged, uniquely educated point of view and that the department, well meaning though it may be, simply doesn’t have enough perspective or experience in their area to be the driver in the relationship.  The end result is that these company-wide groups become viewed as roadblocks versus enablers.  Even the smallest request to deviate from the norm becomes something that a department must be willing to rock the boat and fight for all the way to the top. The executive team has become the only place with override authority.  Right about now the department heads reading this are nodding in vehement agreement, the infrastructure groups on the other hand are looking bewildered and thinking ‘Well of course that’s the way it is, our primary job is to protect the company!

Problem 2: What IS Their Primary Role?

This begs the question, is that true?  Have these roles that were centralized over time as a means of scaling more efficiently really become primarily about protection and control instead of being an enabling force?  Perhaps they are simply misunderstood and it’s just a matter of perspective and which side of the fence you’re sitting on?  The truth, as is so often the case, lies somewhere in the middle.  These groups would surely say ‘Of *course* we’re an enabler. Without our services this company couldn’t even function’. The departments would say ‘They slow me down at every turn and make things more difficult than they need to be’.  They’d both be right.  If we look through the lens of the real-world however and view the other influences taking place, I think we can more easily see where these perspectives break down.

Problem 3: The Role Of Risk

When a role becomes centralized and decoupled from the individual groups that it services, an interesting thing happens.  The values of the role, the way that it’s measured, and the focus of that role change dramatically.  One of the primary results of that is the way in which risk can become the driving force.  This carries with it both positive and negative outcomes that are central to the issue we are discussing here.

Positive:  This decoupling means that short-term, or individual motivators, can no longer inappropriately sway the decisions these decoupled roles have to make.  Example: If the head of sales has her own legal function that she oversees, she can demand that excessive risks are allowed into contracts simply because she hasn’t met her sales quota and really needs this deal to go through.  This obviously cannot be allowed to happen.

Negative: These decoupled roles, because they are no longer acting under the explicit direction of a customer driven process, can define their function as being primarily about risk avoidance.  While this may sound perfectly reasonable, a delicate balance is broken if a role cannot be overridden or at least mediated by the people it serves.  These functions should not be about risk avoidance, but rather knowing which risks are worth taking.  There is a massive difference.  Example: The head of sales needs a contract signed, has negotiated a perfectly reasonable and balanced contract, and needs legal to sign off.  Because legal sees its function as removing risk it insists on keeping clauses in the contract that minimally protect the company under some highly unlikely scenario, but in no way outweigh the benefit of this particular sale.  Since they are beholden to the company and not the department, its self-interest is in ensuring that they don’t look bad if an event occurs that they did not protect the company from (even if that event would have been worth it).  The balance of risk/reward has been lost.  Legal doesn’t feel judged by how well it finds the balance, only by the risks that they avoid.  Therefore these contracts become individual battles, with each companies legal teams simply working in isolation to prove who can ‘win’ the least amount of risk.  Yet the goal isn’t to see who can negotiate best, it’s to establish an effective and profitable relationship with the other party.  That becomes lost in the process. The department head now feels outside of that relationship and that they are having to battle against their own company to get business done.

Problem 4: The Role Of Standardization

As mentioned earlier, scale is a primary reason for the centralization of these roles.  This means that instead of working within an independent departments needs, and possibly at odds with other initiatives in the organization, these centralized groups can now create, distribute, and enforce standards organization-wide in the name of efficiency.  Yet we often get lost in this world of efficiency, efficiency is not the same as effectiveness.  These infrastructure groups can move so far towards standardization that they forget to include support of ‘beneficial variance’.  The result of this can, once again, lead towards a position of control versus enablement.  One of risk avoidance versus supporting intelligent risk.

Positive: Standardization provides major cost savings and increases in productivity.  IT standardizing its computer systems and software, HR with its tools and processes, Legal with templatized and pre-approved contracts/forms.  Example: If you need a computer for a new hire, you can have it in hand with all accounts set up, all software installed and configured to work within the business networks much more expediently and at a lower cost than if each department was responsible for doing this on its own.

Negative: Standardization can become a function of enforcement and cause a loss of reasonable balance when dealing with beneficial variance.  Example: You need a useful piece of software immediately to work on a project.  IT says that it is not approved but that you can submit a request to have them test it within the corporate environment and if eventually approved you can have them procure and install it.  This attempt at enforcement actually tends to introduce greater risk because the department will now try and go around IT since IT is now perceived as a barrier to getting business done instead of someone who facilitates it.  Yet again creating an antagonistic relationship.

Problem 5: The Role Of Disconnectedness

There are natural turf wars in hierarchies.  It comes with the territory.  The problem is that even though there are groups (like these infrastructure and operational groups) that work at an organization vs. departmental level, they are only tasked with certain narrow functions.  Very few organizations contain a working group that facilitates bringing these individual fiefdoms together in a way where they can work together effectively.  Asking a manager to step into another persons arena and propose to them that they change the way they operate so as to benefit the organization overall is a very difficult thing to do.  The political risks, and time required to engage in this activity push people to fall back into their own zones and just work within the resources they have control over.

Positive: It’s very difficult to run an organization day-to-day if everyone feels empowered to suggest improvements directly and expects them to be addressed.  The sheer volume, and conflicting nature of the various perspectives can make for a frustrating experience to all involved.  That can hurt morale vs help it.  This is why you typically end up with a ‘suggestion box’ mentality that no one expects to be taken too seriously. One that is used as a means for management to draw from a list of ideas, pick an item that already meets their agenda, and hold it up to demonstrate they are ‘listening’.  Like it or not, these silos keep a hierarchy functioning, albeit with a focus on efficiency and not effectiveness.

Negative: Change is incredibly difficult to institute if it requires cross-silo efforts (which most meaningful change does).  Communications break down and a ‘every man for himself’ mentality pervades the organization.  Budgets are allocated with too heavy an emphasis on who can fight for them the best vs. where they’ll have the most impact.  Management layers become clouded by bias and political maneuverings.  Isolated pockets of varying value systems and culture make up the organization vs. a consistent foundation.

Solutions:  This is far too extensive a topic to try and answer in a single blog post, but here are some basics to get the ball rolling.

  • Develop a culture around effectiveness instead of efficiency.  The higher the percentage of knowledge workers in your organization the more important this becomes.  Develop a more holistic viewpoint that understands that the narrow view of solving a problem may seem more efficient but when looked at from a larger perspective is actually less profitable.
  • Insist that there are processes, and the people to support them, in place to cope effectively with ‘beneficial variance’ (those exception items that do not conform to the standard yet are worth doing).  This also ties into employee innovation.
  • Build a model like SideraWorks’ Center of Gravity framework which is purpose built to provide a voice and balance amongst competing interests.  The focus should be one of enablement, while still supplying meaningful standards and governance.
  • Depending upon the nature and level of maturity of the company you can pursue a more aggressive scale of organizational change by looking at distributed models (see ‘podular’ designs put forth by Dave Gray here as an example)
  • Have a scenario workshop with the executive team, department heads, and operational groups to discuss examples of the innate conflicts of ‘serving two masters’ and drive understanding amongst the groups about what values and exceptions the company supports moving forward.
  • If large enough, explore having resources within these operational groups that engage as ambassadors in a customer service mentality for the department heads.  People who maintain a perspective of ‘what can we do to reduce friction and make their jobs easier?’.  Flexibility is key here, creating isolated ‘benefits’ then making them available to the whole company isn’t the same thing.
  • Modify the way infrastructure groups are measured for success, include a satisfaction rating from the people they serve as a portion of that measure and reinforce behaviors that focus on finding balance between risk/reward and the judgment that requires.

What you may notice is that all of these recommendations are small pieces that support the evolution mentioned at the very beginning in regards to Social Business.  Agile, Adaptive, Engaged, Connected.  You may also notice that not once was technology mentioned as a solution.  It’s not that technology doesn’t play a role, it certainly does.  It’s simply that businesses have a tendency to gravitate towards  technology as a solution because it’s easy.  It’s tangible and progress is easily measured as a ‘project’.  It’s also the least effective means of solving these particular issues and can deflect from focusing on the true issues. So for the moment I suggest removing it from the board until you’ve made some of the more difficult choices.

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