Getting to the bottom of organisation and operating model challenges

Utilities typically struggle with reviews of their organisation and operating model. Whilst there may be many preconceived ideas on what organisational challenges exist, the prospect of a review raises many unanswered questions and runs the risk of destabilising the utility. An Organisational Diagnostic Framework developed by Marchment Hill Consulting (MHC) provides a strong and meaningful review of their organisation and operating model with minimal disruption to the BAU activities of the utility.

Context

Organisation and operating model reviews are not always as simple as they may seem. It is not uncommon to observe businesses struggling to identify how to approach such a review, or unsatisfied with the results of a recent review conducted by internal or external resources. For example, an organisation’s Executive Management Team may have a range of pre-conceived organisational challenges in mind (i.e. with respect to organisational structure, processes, performance, systems, etc.), but be confused about where to focus its efforts and how to conduct such a review without disrupting business activities.

At this stage, the risk of alienating staff and reviewing areas of low importance is high, which could result in significant delays and consume valuable time and resources. This raises a range of initial questions: How do we conduct such a review? Where do we focus? Do we have the necessary skills and how much effort are we willing to put into this? Do we need independent advice, or do we believe we can do this ourselves on an objective basis?

Once the initial review has delivered tangible findings and observations, the job doesn’t get any easier. At this stage, the review team now faces a whole new range of questions, such as: What issues are interconnected? What are the priorities? What set of solutions or improvements are needed? How do we implement the recommendations?

Given the long list of unanswered questions, such reviews require very careful planning and the establishment of a formal governance structure (i.e. steering committee) and an experienced project team, which quite often removes critical staff from BAU operations.

MHC has developed a proven and effective diagnostic framework for conducting organisation and operating model reviews. The diagnostic framework can be adopted on a whole-of-business basis, but is perfectly suited to divisional or business unit reviews.

Business challenges which might trigger the need for a review

Some common challenges often prompt our clients to review their organisational or business unit structures and operating models, for example:

Organisational diagnostic framework

Framework

MHC’s Organisational Diagnostic Framework provides a comprehensive guide to reviewing organisation and operating model challenges based on a standardised organisation or business unit operating model. Figure 1 outlines the six organisational and operating model elements investigated in a diagnostic.

Figure 1: Organisational Diagnostic Framework – (left) Organisational Operating Model and (right) An example of the typical attributes of the Organisation Structure & Governance element

The Organisational Diagnostic Framework seeks to investigate (through stakeholder interviews and desktop analysis) the strengths and weaknesses of any organisation, business unit or function, relative to the elements and attributes of the framework. The strengths and weaknesses are then prioritised based on a predetermined ‘Prioritisation of Issues’ scale (see Figure 2 below). This information is then used to develop and prioritise recommendations for improving the existing organisational structure and operating model.

Figure 2: Prioritisation of Issues scale

Typical findings and observations

MHC has a wealth of experience applying this diagnostic framework to energy and water utility clients. The table below highlights a range of typical findings and observations aligned to each element of the Organisational Diagnostic Framework.

Approach

The diagnostic is quick, highly consultative and relies on minimal preparation from the perspective of the utility. The consultative approach adopted ensures a high degree of stakeholder confidentiality, with group-wide consensus used as the basis of all presented observations and recommendations. The approach consists of a simple four-step process as outlined in the table below:

Examples of some typical outputs

Displayed below are some typical outputs developed using MHC’s Organisational Diagnostic Framework.

Assessment against Organisational Diagnostic Framework

An assessment of current performance against each element of the Organisational Diagnostic Framework is provided (via strengths and weaknesses), in order to assist with the identification and prioritisation of challenges.

List of priority recommendations

Priority recommendations and a range of other improvement options are identified to address the key challenges.

High-level improvement plan

Recommended priority initiatives and high-level timeframes are provided, including dependencies and key milestones.

Benefits

Reviews based on MHC’s Organisational Diagnostic Framework are both quick and effective. Within the span of four to six weeks, our clients have a detailed understanding of the strengths and weaknesses of their organisation and operating model, a set of priority and secondary recommendations and a high-level implementation plan. Some key benefits derived from using this diagnostic framework include:

Completely independent view of challenges and potential to rectify these
Validation of pre-conceived organisational challenges
Rapid identification of efficiency or effectiveness based enhancement opportunities
Minimal impact on BAU activities of utility
Tangible improvements in workforce engagement and readiness for change
Prioritisation of improvement effort
Achievable implementation plan that focuses on immediate to medium-term improvement opportunities
Ability to monitor organisational efficiency and effectiveness over time where the diagnostic is repeated, and
Low cost to deliver.

An Organisational Diagnostic Framework developed by MHC has been extensively adopted throughout the energy and water industry to provide a strong and meaningful review of their organisational-wide, divisional or business unit organisation and operating model with minimal disruption to the BAU activities of the utility.