Implementing data strategy successfully: the organizational setup
In the battle to work more data-driven, all sorts of organizational issues surface that demand answers. One important aspect we encounter a lot is how best to organize the employees working with data. The organizational structure.
Give us a "rake" is then often the question. And this at a time when fewer and fewer people seem to be interested in gardening.
From strategy to organization: organizational structure follows strategy....or the other way around?
Opinions on the relationship between strategy and organizational structure are quite divided if you look at the past few decades. Although I still hear the cry "Structure follows Strategy" come by from time to time, we must remember that this is a now 57-year-old wisdom from Harvard professor Alfred Chandler. A cry that certainly does not hold true everywhere anymore, to say the least....
That strategy is necessary certainly applies to the use of data. And with big data and artificial intelligence and other terms you hear a lot in relation to data that often make eyes glaze over. By creating a data strategy, you identify where you can use data and analytics to better fulfill business goals. Score with data. Next, you determine how you will implement the strategy. In other words, how does the vision and direction translate to the various organizational aspects, from people to resources. Where, from our experience, the organizational structure is a strong success determinant.
An organizational structure that helps score with data
Whereas in previous articles we have gone into greater detail about datastrategie and How the people side is a success factor in this, we now look specifically at the organizational structure. The organizational structure as an element that has to be right in order to make a successful and balanced transition to the use of data. The use of data to the level of strategic value creation and data as a director of choices.
The 'rake' and pressing questions around organizational design for data-driven work
Whenever we come to talk about organizational structure in our consulting processes with clients, the need comes up to draw "little rakes." Sometimes with lines, spheres or other shapes. Mainly to keep it from looking old-fashioned. After all, we don't work in departments these days, but Agile in squads and tribes and such. But regardless of the way we choose to work as an organization, there is a need to get clarity on:
- What kind of people do I need? What roles and competencies do you need in a data & analytics team? And how many employees per competency do you need.
- What place does it have in the organization? Where do the analysis roles fall under, do we organize this centrally or decentrally. And how do you manage deployment and capacity and also ensure good cooperation with IT and Business departments.
- In doing so, how do I ensure engaged and inspired employees who develop to their fullest potential? So how do you bundle and develop competencies optimally: where will roles and competencies find each other, inspire and strengthen each other, and how will you optimally captivate and bind people with these qualities.
The three-stage rocket
To answer the above questions, we use a three-step approach that addresses all of these questions.
Step 1 is to identify the competencies needed and translate them into required roles/people, from ambition and the competencies currently present.
In doing so, we group the competencies into roles. And in order not to make the whole thing appear too complex, we visualize these roles in the form of Lego dolls. A nice metaphor for building an organization. With larger organizations you get the question of how many of which dolls you need. In small organizations, the number of dolls often scares people. What helps is that these are roles, where for smaller organizations it may well be that employees can fill more roles.
Distinguishing and naming roles and competencies helps to focus on what you need and what you already have in place. It thus forms the first part of the puzzle to the design of the organization.
Step 2 is to determine the possible organizational variants
In this step we determine the most obvious organizational variants, so get to work with the rakes. What this step looks like depends on the size of the organization. And so can vary enormously. Are you talking about a company with 50 employees and two analysts or an international player with hundreds of people in the data domain....
We explore and work out the variants. What do we do centrally and what do we do decentrally, who controls what, how do departments work together and so on. In this phase, limit yourself to preferably a maximum of three variants.
Step 3 is working out choices in a structured way...and making them!
Once we have a clear idea of what we need and in what forms we can organize it, it is about making choices as objectively as possible. After all, it is about people, their job satisfaction, their attachment to the company, as well as efficiency and achieving goals. But unfortunately also about power and control and more such sensitivities.
In short, not something to be decided from the gut or based on who shouts the loudest. To make the choice so transparent, we first elaborate on the selection criteria.
For criteria, we look at objective matters such as the number of employees involved and the resolution of concrete bottlenecks. But also aspects such as: how independent analysts can bring their advice, how we can secure knowledge development up to and including the organizational variant that best facilitates achieving strategic goals.
Once there is agreement on the criteria, we then determine the weights and scores of the organization variants. Scoring each organization variant on a criterion ultimately creates a winner!
The powerful thing about this approach is that because of the tiered approach, you get consensus on parts of the question each time and not immediate discussion about the final solution. The most appropriate design then follows from the sum.
Strategy and structure are intertwined...and then you have culture as a success factor!
Whether structure follows from strategy or the other way around remains an interesting question, but don't fall into the trap of trying to figure out a variant that suits everyone. Make choices for a structure that scores best at that moment and then dare to act, is the best advice.
When people start taking ownership from a clear organizational setup, things happen that really mean progress. And then it quickly becomes about culture again.
