#6 How to empower employees and design a customer centric organization

#GetQuared is a movement for those that want to bring meaning, belonging, & growth to work. For those that see no trade-off in making companies more humane & productive.

Our dream at Quared is to make every employee feel like an owner. And we have a step-by-step framework for it.

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The “old” way of running a company

Since the industrial revolution, when mass production became a key factor of the economy, organisations have typically had a strong hierarchical element mixed with a high level of specialisation of labor.
 

This proved useful when efficiency was the key driver of success in a business. However, today, when creativity is far more important, the old approach results in a few challenges. People and teams are:
 

  • Dependant on the “central authority” and slow to make decision
  • Disconnected from customers and value adding activities
  • Disengaged due to their lack of power and autonomy

The city paradox

Every time the size of a city doubles, productivity per resident goes up by 15%. But when companies double in size, the exact opposite happens.
 
A possible explanation is that, in cities, each team (ie. the shoe maker or the bakery) is self-organised and has a certain level of freedom and autonomy to do what they think is right. In other words, in cities, the power resides in the teams.

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Organisational Physics

One of the main issues that companies have is that their people spends far too much of their share of energy in stuff that does not create external value for the customers. Niels Pflaeging illustrates this very well:

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All companies have two given structures:
 

  • Formal structure: It provides the necessary structure through compliance with the “laws”. However, it is overemphasised in most organisations. It is this excessive reliance on hierarchy that is the key source of suffering in the world of work today
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  • Informal structure: These are “clouds” of interconnected individuals, with varying numbers of links to others. Very alive and dynamic and very powerful as well. Impossible to accurately pin down or map
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However, many companies fail to add a third critical structure devoted exclusively to driving value for the customers:
 

  • Value structure: The least understood structure of any organisation. Neither success nor performance can be produced in Formal Structure or Informal Structure, because these are just carriers of the compliance dimension, on one hand, and of the social dimensions of the organisation on the other. For actual work or value creation, all organisations possess a third structure
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When you have a formal structure that is too strong, people and teams tend to spend lots of energy in bureaucracy and also in informal interactions (often times as a way to “escape” or criticise the wrongs of hierarchy and authority).
 
By adding a third structure with teams of people with the right levels of autonomy and alignment (mimicking the set up of a city) to drive value for the customers, the company starts to have more impact and it advances towards its mission at a faster pace.

A team of teams

The easiest way to implement the Value Structure in an organisation is through the “Team of Teams model”.
 
A network that combines transparent communication with decentralised decision-making authority. It was used by the Joint Special Operations Command (JSOC) of the American Army that defeated Al Qaeda. Team of Teams is an operating model that pulls together different teams — and their members, into a seamless network of organisation.

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In a Team of Teams, decision-making authority is pushed out to each team leader instead of residing only with the very top leadership of an organisation. The role of upper leadership changes from one focused on making every decision throughout the organisation to a role of providing information and context to each team so that they are all connected to a common purpose and have the best information on which to make their own decisions.
 

This can be achieved in any organisation, regardless of size:

Steve Jobs: “Apple is the biggest startup in the world”
 

And how should these teams look like?

The POWER framework

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1. Prepared to win

 

Each team should have all the necessary skills they need in order to succeed. You can start by defining organisational skills that should be present in every team (ie. Experience Design, Data Analytics and Systems & Tech). Each team will have a person responsible for these areas; this ownership is compatible with other tasks within the team (and it’s not necessary to hire someone with lots of experience, just fast learners with an entrepreneurial mindset).
 
Then you can complement these general skills with team-specific skills that each team requires to succeed (ie. Online advertising, financial modelling, etc.).
 
Finally, frugality is important, but do not have the teams make compromises where it matters. Provide them, upfront, with the budget they will need to succeed.

2. Oriented

 

Adopting a structure that is too hierarchical results in reduced speed, engagement and impact.
 
However, adopting a complete opposite approach (Holacracy), also has it’s challenges:
 

  • Talented managers leaving the company
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  • People and teams lacking clarity and feeling lost
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The key is to find the right balance between a minimal structure and autonomy

minimal structure, that guides and provides clarity without reducing empowerment and autonomy can be:

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3. Wired to customers

 

If not all the companies are the same, and they don’t serve the same customer needs… why do they all look the same? (are structured in the same departments and areas).
 
The key to drive customer value is to design an organisation that follows your customer journey. Instead of organising your company in areas like marketing, product or customer success, why not try to customise your teams to your reality. An example for a company dedicated to train and connect chefs:

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Besides customising your teams, it is also important to stay agile in order to drive value. This results in small, entrepreneurial, teams defined as follows:
 

  • Mini company (or startup) within a larger organisation
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  • Cross-functional team members linked around a customer goal
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  • Autonomy to fulfil their mission
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  • Long-standing and customer-facing
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  • Focused on experimentation & data-driven (to keep adding value for customers)
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Jeff bezos: “No team should be so large that two pizzas can’t feed the whole group”

4. Empowered

 

Spotify is a pioneer in organisational design with their Squads & Tribes agile set up that they invented.

 
Below is one of the illustrations that best showcases their vision. Once you give the resources and guidance that the teams need to win, you have got to empower them and provide the autonomy they need to make an impact and serve the customers.
 
A good rule of thumb is that you should aim at having 85% of decisions made locally in the teams. Only decisions that can compromise the whole organisation and its future should be scaled to the Executive Team.

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5. Results oriented

People and teams are most engaged and productive when tracked by outputs (not inputs). For instance, you should not be tracking how many calls a Sales Rep does each week, but rather how much revenue he or she brings at the end of the month.

     

  • Set up clear objectives at both team and individual level for each period

 

  • Give people freedom of input (let them work when, how and where they prefer)

 

  • Focus your managers in facilitating and guiding

In essence:

 
 

Give your people and teams the POWER they never had, and they will take you to places you never imagined.

We discussed all of the above in our last Quared Masterclass!

“Creating a better world of work”
Alex, Miquel & Toni

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