5. Building the Organization:
Strategic Intent, Design, Assessment and Placement

5. Building the Organization:

Assessment, Design Process and Corporate Example

The Organization is a Corporation’s Primary Tool for Accomplishing its Business Goals and Achieving its Vision

Accordingly, it is Crucial that an Organization be Designed with Conscious Intent to Provide the Functions, Expertise, Leadership and Structure that Logically can be expected to Achieve the Corporation’s Overall Desired Result

What Follows here:

• First, an Overview Look at the Organization Design Process

• Second, a Deeper Look at the Organization Design Process and a Detailed Example for a Startup Company

  • The Startup was Spun out of an Established Parent Company in Order to Commercialize a Breakthrough Technology Discovered by the Company’s R&D Department

• The Company, its Specific Businesses, Technologies and Employees are Fictional, Fabricated to Illustrate the Principles of Organization Design.

• The Detailed Example, However, Could be Illustrative of an Exercise a Real Company Might Conduct

Organization Design Process Overview

• Review “the Situation”, Understand the Company Values, Vision and Strategic Intent Define Strategic Objectives
• Identify Essential Functions
• Establish Optimum Structure
• Describe Individual Positions
• Evaluate Qualifications of Incumbents, Identify and Place Most Qualified Individuals
• Reassign or Outplace Individuals with Poor fit
• Recruit Outstanding Individuals to Complete the Organization

Organization Design Example

Background

• R&D Researchers in Pharmavela, LTD Discovered, Demonstrated, and Secured a Strong Patent Estate on a Light Activated Catalyst System that: 

  • Increases Reactivity of  Carbon-Hydrogen Bonds Facilitating Attack by Oxygen or Other Electrophilic Agents 

  • Degrades Nanoplastics in Manufacturing Waste Streams and in Seawater

  • Allows Modification of the Surface of Commodity Polyethylene to Give Unique Premium Properties that Command Specialty Prices

• Business Development Staff Negotiated Sales Agreement with Leading Polyethylene Manufacturer Developing Annual Sales of $2.5 Million

• R&D Secured Government Seed Funds to Pursue the Concept of a Solar-Powered, Autonomous, Floating Processing Facility to Remove Nanoplastics from Seawater

• The Project Team Proposed the Creation a Separate Division for Commercialization

• Corporate Leadership Concluded that

  • The Opportunity is Attractive and Commercialization Warranted

  • Pharmavela’s Mission is Pharmaceutical Contract Manufacturing and Not Process Technology

  • An Independent Company was the Best Commercialization Vehicle—“Catalexis Chemicals” was Formed and James Ferringten Appointed CEO

James Ferreningten,  CEO Biography

• BS Degrees in Economics and Strategic Public Relations

• MBA Specializing in Entrepreneurship

• Pharmavela Roles: Brand Analyst, Marketing Manager, Special Assistant to Pharmavela CEO Developing Divestment, Merger and Acquisition Strategies for Active Pharmaceutical Ingredient Manufacture

Actions Taken

• Personnel Associated with the Light Activated Catalyst plus a CFO and an HR / Legal Director Were Transferred to Catalexis Chemicals

• CEO asked to Propose Organization Structure

Catalexis Chairman’s Comments

• Environmental Waste Destruction and Polymer Modification are Very Different Ventures, Differentiation Needed

• Resource Grouping Needs to be Revised

• Need Opportunity for Acquiring “New Blood”

• Need Arrangement that Builds Leadership

• Need to Move the Organization Forward more Aggressively

• Formal Organization Design Study Needed, HR Director to Lead—with Chairman’s Input

What Follows in the Example:

• A Comprehensive Flowsheet of the Organization Design Process Showing Individual Steps

• The Multi-step, Intricate Flowsheet Shown in Manageable Stages (for ease of viewing here)

• The Results for Each Stage Presented

• Results from all Stages Combined at the End of the Exercise to give a Complete Picture of the Results

• Finally a Complete Flowsheet Presented  as a Reference Document

First Step: Define Catalexis Vision and Business Approach 

Second Step: Catalexis Business Objectives

Third Step: Catalexis Functional Objectives

Fourth Step: Determine Functions Needed and Optimum Grouping

Functions Needed by Catalexis

Optimal Grouping for Legal, HR and Finance Functions

Structure for Legal, Finance and HR

Functions for Premium Polymer Solutions and Environmental Nanoplastics Solutions Businesses

Functions for all Business Areas

Functions Managed at the Corporate Level

Functions for Premium Polymer Solutions and Environmental Nanoplastics Solutions Businesses

Fifth Step: Populate the Organization

Employee Assessment

Employee Assessment Results

Completed Catalexis Chemicals Organization Chart

Some Further Thoughts on Employee Placement

The Question of Future Performance

When an Individual is Hired or an Employee is Reassigned to a more Challenging Position, the Action is Essentially a Prediction of Future Performance

That Prediction, in Principle, should be more Accurate for an Employee who has a History of Performance, than for a New Hire who is Likely to Essentially be a Stranger. While there are Assessment tools that Attempt to Provide a Measure of Quantitation, there Remains Considerable Uncertainty for New Hires as well as Employees. 

What Follows is a Focus on factors that Experience Teaches are Important Contributors to Current Performance and to the Growth in Performance needed for more Challenging Future Assignments.  The Approach taken is to Stimulate a more Complete Overall Qualitative Assessment Rather than an Attempt at Quantitation.

Factors to be Considered

• • Basic Intellectual Capacity

  • Functional Competence (in whatever disciplines are important to the assignment)

  • Problem Solving Approach and Skill

  • Judgment—Record of Effective Decision Making; or Lacking a Record an Assessment, the Quality of Approach to Decision Making

  • Experience

  • Leadership

  • Job-related Personal Characteristics—Motivation and Disposition

Contributors to Future Performance

Basic Intellectual Capacity

• Ability to Learn Job Content and Grow to meet Evolving Business Needs

• Curiosity and Follow-through to know Current and Future Environment

• Functional Competence

  • Depth, Breadth, Rigor and Academic Field Relevance

  • Commercialization Skills

    • Science (Chemistry, Biology, Physics, etc)

    • Engineering (Proces, Equipment, Facility; Electrical, Mechanical, Civil, etc.

  • Business

    • Strategy, Sales, Marketing, Finance, Negotiation, Project Mgmt., etc.

Functional Competence

• Depth, Breadth, Rigor and Academic Field Relevance

• Commercialization Skills

  • Science (Chemistry, Biology, Physics, etc)

  • Engineering (Proces, Equipment, Facility; Electrical, Mechanical, Civil, etc.

• Business

  • Strategy, Sales, Marketing, Finance, Negotiation, Project Mgmt., etc.

Basic Intellectual Capacity

• Ability to Learn Job Content and Grow to meet Evolving Business Needs
• Curiosity and Follow-through to know Current and Future Environment

Functional Competence

• Depth, Breadth, Rigor and Academic Field Relevance
• Commercialization Skills
  • Science (Chemistry, Biology, Physics, etc)
  • Engineering (Proces, Equipment, Facility; Electrical, Mechanical, Civil, etc.
• Business
  • Strategy, Sales, Marketing, Finance, Negotiation, Project Mgmt., etc.

Problem Solving

• Data/Fact/Past Performance Gathering
• Formulation of Objectives for Success of Project & Business
• Creative Solutions from all Likely Sources—Openness to Other’s Ideas
• Objective Selection of Best Solutions; Formulation of Definitive Experiments
• Evaluation and Prioritization of Options
• Ability to Gain Support and Approvals
• Organized Implementation Effort with Urgency

Judgment

Demonstrated Track Record for Decisions that Led to Best Outcomes

Likelihood of Good Future Decisions Based on Validity of Approach to Historical and Current Responsibilities

Experience

Transferability to New Job

,•Big Company Vs Startup

•Maintenance Vs Development

•Wet Inorganic Process Vs Polymer or Solid Catalysts, e.g.

•Low Quality Standards Vs Corporate Needs

•Empirical Vs Rigorous Science and Engineering Approach

Leveragability to Evolving Business Needs

•Fundamental Principle-Based and Translatable to New Situations?

•Based on Unconnected Observations and Applied “Whole Cloth”?

A Few Last Words on the Question of Future Performance

While there are Helpful Formal Programs Utilized for Employee and New Hire Assessment, the Choice of a Particular Individual for a Specific Assignment is Substantially an Intuitive Act.

The Purpose of this List of Contributors to Future Performance is not Intended to Supplant Formal Programs, but to Simply Encourage the Systematic Consideration of Elements—Identified by Decades of Experience to be Important—when Engaging in the Intuitive act of Hiring or Assigning an Individual.

Leadership

Clear Vision of Future State of the Business, Program, Technology, Project

• Dialog with Organization Leaders and Drivers
• Evaluation of Market/Customer Needs and Technology Requirements and Capabilities

Objective Assessment/Fact-Science Based Decisions

• Rational/Honest Evaluation of Risks, Rewards, Odds of Success, Corporate Fit and Risk Minimization Opportunities

Creative Search for Solutions Leveraging Experience

• Ask “What Must We Do for Success?” Not, “What Do We Know How to Do?”
• Understand Processes and Technology
• Define Solutions Needed, Search Internally and Externally
• Strive Always for the Best Sustainable Solutions

Effective Communication of Essentials in a Timely, Honest and Transparent Manner

• Convey Intent, Risks, Deviations/Contingencies, Benefits, Progress and Opportunities for Risk Minimization to Superiors to Gain and Maintain Authorization
• Convey Mission Scope and Value to Peers to Gain Cooperation and Avoid Destructive Competition
• Convey Business/Program/Technical Vision and Operational Standards to Subordinates to Gain Commitment and Insure Rigor in all Aspects of Development

Job-Related Personal Characteristics

Motivation

Source of Drive:

•Self Generated, Compelling Challenges, Imposed by Others?

Nature of Drive:

•Passive, Aggressive Toward People in Pursuit of Results?

•Aggressive Toward Results with Appropriate Humility to Keep Harmonious Relationships and Value Other’s Contributions?

Desired Reward:

•Social Acceptance, Self Aggrandizement, Value Contribution, Other?

Modus Operandi:

•Loner, Limited by Personal Capability

•Draws on Others’ Skills in “Ego-Free” Teamwork Environment

Disposition

Self Assurance, Confidence to Find Solutions

Deterred by Challenge and Uncertainty?

Stamina and Drive for Results, Capacity to Handle Stress

Positive Attitude in the Face of Adversity 

Determination to Rebound From Failure to Find a Route to Success  

Interaction Preferences (e.g., by Myers, Briggs assessment)

•Extroversion Vs Introversion

•Sensing Vs Intuition

•Decision Basis, Feeling Vs Thinking

•Execution, Open/Flexible Vs Driven to Closure