'Top managers heading for exit as Centrica axes 5,000 workers’ screamed the headline this weekend in the Times. Centrica has been battling various challenges over the last few years, so whilst the Coronavirus pandemic may have sped up significant structural changes, it certainly wasn’t the main overriding factor. It did however cause me to reflect on the fact that whilst COVID-19 may or may not take the ‘blame’, Centrica won’t be alone in using the opportunity to reshape their organisation. Interestingly, it was reported that three management layers will go to create a flatter, less bureaucratic organisation. It obviously does depend on how many layers you start out with compared to where you end up, and having worked in large corporates like Centrica that have legacy roots linked to the public sector, taking out three levels from 12+ layers may not make much difference in day to day terms.
However, taking the opportunity to reshape your organisation is something that many businesses are considering right now, and certainly for many it will be an unfortunate necessity due to pandemic-related reduced income meaning that it is no longer feasible to carry the staff overheads they previously could. Whilst stripping out roles in some organisations may be more straightforward, for others it will require a fundamental rethink. What skill sets and roles do you really need going forward? Do you have those skill sets already, or do you need to reskill or rehire to fill them? The temptation is often to start with the number of heads you might need to take out or move around to hit the right number, and whilst this achieves the specific goal of achieving an initial cost reduction, done in isolation this may create further challenges in the long term.
The best place to start when thinking about reshaping your organisation or creating a flatter model is to consider what your organisation is there to achieve and what value do your roles and levels add at each level. Many corporate restructures start with existing grading frameworks, many of which are no longer fit for purpose as they are often overly complex, promoting hierarchy and status, and typically have little understanding of what value roles at each level bring. People ‘know’ that a grade 8 is higher than a grade 7 but can’t really articulate what makes them a ‘higher level’. In my experience, this type of grade structure promotes grade chasing and, more often than not, a devaluation of your job evaluation framework, as employees and managers play buzzword bingo to bolster job descriptions to gain extra points to move up the corporate ladder. Using broken frameworks, that often have been ‘adapted’ to accommodate certain roles over time, muddies the water when you are truly trying to reshape and redesign your structures.
Our experience of such systems is in part why we developed our Evaluate framework. Based in work level theory, each level represents the true value a role brings to the organisation. We question what value and impact a role has – does it add value for the present, the medium-term or the future? These type of questions are key when you are reshaping your organisation – how can you be sure you have the right roles at the right levels when you have so many levels you don’t understand what value a role adds and what it is there to deliver? There are well documented pros and cons to flatter structures (which is for another blog!), but if you are unable to clearly define what value roles bring at each level in your company, then please talk to us before you embark on your reshaping exercise, as there could be a better way to achieve your desired results.
If you could use support with reshaping your organisation, or if you would like more information on Evaluate and our framework, please get in touch. You can reach me on +44 (0)20 3457 0894 or email justine.woolf@innecto.com.
