Large, complex, decentralized companies have unique challenges managing learning and development. Decentralization tends to be driven by various business units’ desire for self-direction and financial autonomy, while the overall global organization’s priorities center on leveraging economies of scale and common practices to achieve overall goals. As a result, the desire for local independence often leads to concerns about how to integrate financial, governance and technology programs and policies.
Further, companies are not static; they grow and change. Processes that worked when the company was a small organization in one country with one regulatory environment and currency may not work when it expands to 10 locations with 10 different regulatory environments and currencies.
Many successful small companies fail when they grow because they are unable to handle these larger, complex systems. Multiple groups with their own agendas compete for the same human and financial resources, and as the corporate office disseminates directives throughout the global framework of the company, others arise at the local or business unit level. The task for organization development (OD) and learning leaders is to balance the disparate needs, processes and initiatives that arise from all levels of the company, including shareholders.
Who Calls the Shots, When and How
Many large companies have strong corporate-level and company-wide governance. There are specific standards and processes required for every business unit regardless of its geographic location. On the other hand, it is important for various divisions or units to have some measure of autonomy to make the necessary decisions to fulfill their specific business initiatives. They should perpetuate the unique attributes in their respective corporate cultures and practices that provide them with real competitive advantages. Yet, encouraging such autonomy inevitably creates tension between local and company-wide leaders as both desire decision-making control to serve their brands effectively. Large organizations cannot maintain consistency if every leader can do as he or she thinks best, even if the leader’s decisions and actions are well-intended.
There are decisions housed appropriately at the separate business levels. However, in many companies there are instances when it is unclear which level should make the decision. For example, a company might wish to establish a new employment branding practice. The local level may legitimately believe it is its decision to make, while the business unit level or corporate headquarters office may think it’s their decision. Clear guidance on who decides what is a powerful enabler of effectiveness and efficiency and can help to avoid these problems. Lowe’s, the home improvement store, dealt with the challenge in this way.
“At Lowe’s we have implemented decision-making models which state that for this given area and within these parameters who actually gets to make the decision,” said Cedric T. Coco, senior vice president of learning and organizational effectiveness, Lowe’s Cos. Inc. “It’s being very clear in your communication on identifying what decisions can be made locally and which decisions must be made centrally due to risk or other factors. You can’t do any of that without having a basic draft or version of a business model in place. Creating OD strategies to resolve these governance issues ultimately assists organizations in reducing these conflicts and misunderstandings.”
The disparity of information technology systems also presents a significant obstacle for global organizations. The systems used to connect, present, analyze and use data in one country are often not the same in others, or even at different locations in the U.S. It is difficult, expensive and time consuming to assemble workforce data via multiple systems. A global IT system for talent management purposes may provide the perfect solution, yet the expense may not be fiscally warranted for the company. HR systems investments are seldom prioritized as highly as global systems supporting operational needs, such as inventory tracking. Therefore, learning leaders need to discover how to work with multiple system platforms.
Procter & Gamble is working on upgrading its HR data infrastructure to integrate stand-alone data systems that are insufficient, fragmented or require extensive manual intervention. “This intent is to help us manage decisions for human resources with accurate, real-time and user-friendly data reporting and analytics tools. This will also free up capacity in HR from managing data to focus on strategic results and higher-impact operational work,” said Laura Mattimore, director, leadership development, Procter & Gamble. In these situations, OD and IT leaders need to work together to identify creative and prudent solutions for rising leaders, top talent and the overall workforce.
Integrating new entities that arise from mergers and acquisitions can create additional challenges for learning and OD leaders. For example, in addition to the technological aspects of the integration, there are decisions to make about either eliminating or assimilating duplicate departments and functions and reconciling corporate culture differences. There may be a desire to let the acquired entity’s culture and employment brand remain intact to preserve its operational success and personnel stability. While that strategy lends itself to a smooth transition, the acquiring company likely wants to achieve economies of scale and promote similar practices and a common culture throughout the organization. This objective affects all levels of the integration process, cultures, personnel and strategic goals.
Leaders should create a shared vision of the future organization: one where the best processes and procedures from both are combined into new practices. Learning leaders then can take this vision and translate it into processes and practices that foster necessary employee behaviors, such as how managers set goals, appraise performance and reward individuals.
Building the Right Team
The strengths and weaknesses of OD and learning staff at the corporate, business unit and local levels are acutely felt in large organizations where these leaders may have indirect reports at all levels in geographically dispersed areas. Determining the strengths of the professionals who are responsible for implementing corporate initiatives can be a lengthy process. In successful decentralized organizations, OD and learning team members are trained to understand the valid yet dissimilar needs in conflicting agendas from all levels. Achieving this level of alignment throughout the global company is not easy and can be contentious. One solution is to integrate all personnel training with the organization’s strategic objectives. This provides employees with a better understanding of the company’s purpose, vision and culture, as well as how their positions fit into the overall plan.
Myriad OD challenges have one common aspect: communication. A lack of communication at all levels can become a significant threat to even the most successful organization. There are several tasks decentralized companies can do to more effectively manage these challenges:
1. Align OD and learning needs with business needs. Communication should flow both ways among all levels. One-way communication often results in misunderstandings, resentment and sometimes hostility.
“All these issues are byproducts of not having clear communication, a unified business model that starts from the enterprise level and works down and a decision-making matrix tied to these. Then all these issues can be managed,” said Coco.
A common change problem is when an organization decrees something from the top, sends it down the levels, and then wonders why all personnel are not in alignment. A more effective solution is to foster a dialogue up and down the command structure or the organizational hierarchy. Changes are more readily accepted when leaders obtain the buy-in of the employees implementing the change and their ideas on how to make changes work. Equally important is for OD and learning personnel to talk with their company leaders regularly about the programs and initiatives the company provides. The goal of these interactions is to determine if the leaders find value in the initiatives being pursued, routinely reconfirm the priorities and have a system in place to identify and make any necessary modifications. This ongoing conversation enables the learning organization to align its goals, strategies and requirements with the company’s.
2. Assume positive intent. OD and learning leaders are in a better position to implement any decision made at the corporate, business unit or local level and to work with disparate agendas and approaches when they assume decision makers have a true desire to help the business achieve its goals. When conflicts emerge, it is beneficial to create a dialogue to determine the reasons behind decisions that prompt contention. By candidly addressing all parties’ intentions, the dialogue should uncover the best solution for everyone.
3. Make the implicit explicit. Whether individuals are in different parts of a building, the country or the world, it’s too easy to presume that any type of communication is clearly understood by any or all. The best strategy is to put key decisions and messages in writing, whether it is in an email or other type of vision or policy document. Then, leaders can review them with the appropriate employees to ensure they comprehend instructions. It is impossible to anticipate every developmental learning need, especially in a large global company where new priorities often emerge quickly. However, by stating in writing what many assume to be obvious, leaders can minimize conflicts and communication breakdowns. This is important in any organization. In companies with multiple brands in national and international locations, unambiguous communication is critical to success.
Believing a one-size-fits-all approach will solve OD issues is naive for any large, complex and decentralized organization, especially those operating globally. Business units outside of the U.S. have different needs from those within the country. For instance, diversity and equality of opportunity in U.S. business units drive many OD and learning decisions. Yet, this concept does not always have the same context or connotation in other countries.
Implementing any global project without considering the intricacies and complexities of each business unit is to court failure. Involvement of all levels and locations in global organizational development and learning promotes alignment and integration for successful implementation of programs and initiatives while fostering worldwide partnerships.
Ron Lawrence is the vice president of organization development for VF Corp., a global apparel company. He can be reached at editor@CLOmedia.com.