Specific vs Generalist organizations? Which design is better, and when?

What is the best way to set up business organizations – in terms of functions, resources, capabilities, roles,… – is a fundamental topic for all companies, whether they operate in services, physical goods, energy, telco,….

The following example – taken from our direct experience with one of our key clients – illustrates the competitive advantage of our approach and competence on the organizational topic, and the huge value that our work delivers to our clients.

In this case the key question of our client was around the degree of specialization to give to their organizational functions. In particular, they believed that they had to increase dramatically their degree of organizational specialization, creating different Divisions (in particular, one for each banner).

To answer their question, we applied our proved organizational methodology, finding that our client’s belief was generally wrong and that, in case of implementation, it would have worsen significantly the effectiveness of their whole organization.

The first step of our work was to identify the key activities that the different Functions of our client’s organization were doing. In general, this is thought as a pretty simple assessment, but in reality this is much more complex, for at least three reasons:

• in an organization, people generally do only partially what they are told to do (a famous definition of “leadership” is: to be able to make people do what they by themselves would not do)
• even when people want/accept to do what they are told to do, it is not evident that in the end they achieve it (in any organization there are issues of interpretation, capabilities, timing,…)
• when adding up all the gaps (vs desired model) of each single resource, the resulting gap of the whole organization is hugely increased.

Below is shown a couple of examples of the overall key activities by Function of our client, as our assessment was able to depict in reality. It is important to note how much our client was interested by the results of our assessment already at this stage, learning crucial points of their organization real functioning for their first time in their life: on processes (e.g. cross function), roles (e.g. responsible vs informed resources), criticalities (e.g. underperforming activities),….

We then moved to assess the level of “specificity” of each Function. Two important points have to be underlined here.

The first one is that we addressed this topic in an extremely comprehensive way. For example, we performed not only the organizational analysis, but also the economic one (number of resources, costs,…). Also, in the organizational analysis we took into account all the three most important angles that affect specificity:

• processes
• competences
• interfaces

The second important points is that, already during our assessment, we were considering both the past (the current situation) and the future (the need of change). This allows a much deeper understanding of the best solution for the client.

Here are a few illustrative examples of summary charts of the specificity analysis that we performed for our client.

By combining together all the pieces of work that we performed and leveraging our methodology, we were able to reshape completely the initial belief of our client. In particular (see the below graph):

• In most Functions (except one), the client had not to introduce more specificity, let alone create separate Divisions
• In one Function (Sales), it was even better to reduce the current level of specificity, adopting a “generalist” model.