Tactics to Make Your Business a Networked Organization, Part 2

In part 2 of this multipart series on the steps businesses must take to become networked organizations, we look at four tips to consider when tackling the optimization of your value networks.

(For part 1, click here.)

1. Visualize and organize the enterprise as a network, not an organization chart. In today’s organizations, you're compelled to work with the starting point of the organization chart. It’s all lines and boxes, hierarchies, reporting relationships, and vertical accountabilities and rigidities. It’s a problem — a barrier to network thinking. The first instinct is to get rid of it.

Before you do so, begin to visualize the organization as a network. The components are:

• the roles individuals play (not the job titles they hold);
• the processes that link them together as they collaborate to complete deliverables;
• the knowledge they share and/or create to complete the deliverable; and
• the deliverable itself — i.e., the value they're collaboratively creating.

Organizational charts still can be useful as resourcing tools for the new roles of people working with technology in a value network. Their purpose should be rethought to support the necessary roles and interactions that create value.

2. Make roles the building blocks of the network, not jobs. In a value network system, any one person might play three or four different roles in three or four key value networks in the organization. It’s hard to model that organization, but here are some tips to get started.

The value network is about how communication converts knowledge assets into revenue and profit. The first step is to define the roles and interactions that make the system — i.e., the value-creating network. Once defined, it’s important to avoid simply trying to import the definition into an organization chart.

The way to avoid the organization chart lies in the idea of teams. Value networks are simply an expansion of the definition of a team. People understand teams; they can deal with the idea that teams can be very large. You can look at teams as networks and, when defining them, assign people on the teams to play roles in those networks.

Assign people to those roles just as you assigned them to teams and special projects in the past. It isn’t profoundly different, but the fact that you can hold on to the old while learning how to do something new is reassuring to people. And reassurance is essential.

3. Separate roles and jobs. Jobs are sets of tasks to be completed. Tasks are lists of things that you do in your job; they're measured around events and outputs.

In contrast, roles are defined by what value they contribute. The organizational direction is: “Here’s the role we want you to play. Here’s what we expect of that role. Here are the value outputs required of that role. Yet, how you play that role is up to you.”

The evaluation question is: How effectively are you playing the role overall? We all have tasks that we do well and not so well. If you can’t add, for example, you get somebody else to do it for you, but you can still play a role of analyst very well.

The role requires being savvy. Who are you going to name to help you complete the tasks needed? What will you be doing in this role? Focus on roles, not just jobs.

4. Reward roles for creating value instead of compensating jobs for completing tasks. An individual may be located in the sales department on the organization chart as a tier-three sales manager. The enterprise can set a pay scale around that position. But even today, individuals wear multiple hats in any job. That sales manager is going to have three distinct roles: customer relationships, forecasting and production feedback.

He has a defined value contribution in each of those activities, and that’s what he's going to focus on. Performance management systems must gradually come to manage how many different roles individuals can play and how effectively they play them — instead of what jobs they do.

To do so, it’s necessary to change the HR system. HR writes clear job descriptions, specifying what experience is needed, and then the system tries to match candidates exactly with that job description.

If an individual would like to do that job but doesn't quite have that experience, it's enormously difficult to get hired to do it. HR people have put themselves into a box by defining each job as having a specific set of tasks and requiring specific sets of experience to fill those tasks. They handcuff themselves as far as finding talent or working flexibly with the talent they have.

Maybe they don’t need a full-time business analyst. Maybe with the right job description, based on roles, you could have someone be a business analyst one day and a production performance manager the next.

Check back in two weeks for the third and final part of this series, where we'll examine how implementing relationship thinking in favor of process thinking leads to better run businesses.

Hunter Hastings is chairman of EMM Group, a global growth consultancy, and chief marketing officer at JBS USA, the North American arm of JBS, a multiprotein producer and brand owner of processed beef. Hunter can be reached at hunterhastings@emmgroup.net. Jeff Saperstein is an author, teacher and consultant on marketing to increase growth. Jeff can be reached at sapermktg@earthlink.net. Hastings and Saperstein are co-authors of “Bust the Silos: Opening Your Organization for Growth.”