One of the central tenets of Shared Service programs is trying to consolidate operations for support functions into one central view. It isn’t easy, it isn’t always fun, but if you’re going to manage across multiple business units or held companies effectively, you need to see everyone first.
The problem, everyone will tell you, is that the way they think about Legal is different than the way business unit (BU) A thinks about it. And the way they allocate real estate costs is different than the way BU B does. These sound at first like problems down in the weeds, but pretty soon you’re stuck in the weeds, and without a strategic approach to this problem, the “program” is lost because these problems are insurmountable where the rubber hits the road.
Organizational Visibility
Think of OrgVis as an extension of “If you can’t measure it, you can’t manage it.” In this case, “If you can’t see it, you can’t manage it.” How many people do you have in your organization, globally, and what are their fully-loaded costs? Where, in a simple, consistent organizational hierarchy, do they fit? This is a hell of a challenge, so let’s square our shoulders and get to it.
Week 1: Define the working hierarchy
Two seemingly contradictory truths MUST happen in week 1.
- You absolutely must finalize a working hierarchy with all the key stakeholders aligned–and it does not change for the rest of the project.
- You must communicate to those stakeholders and others that the tree you put together is temporary, just a working tree for the sake of the project, and that once the project is over, we can evaluate moving things around and expanding/collapsing branches.
Bottom line, you cannot spend the next 4 weeks debating what falls where or what level of detail is possible/desired. You can spend the first week coming up with an organizational hierarchy for information’s sake. Remember, organization visibility comes before organizational alignment, and it is critical that everyone knows you cannot do them both at the same time.
Week 1 also includes a dept/acct level data request. Get everything in every system that helps you understand how many people fall into every department (or BU or cost center or whatever you call it), and what costs exist in each dept and financial account for the test period.
Week 2: Data validation
If you have 15 business units being consolidated, you need to spend an entire week validating that the data you got ties out. Don’t map anything in week 2. Just tie data extracts to control totals, and validate your numbers against top-line financial and human resources reports. You could follow up and re-extract as required so that by the end of the week, you have a clear picture of who is where and what money was spent in which depts/accts.
I will say again, week 2 is not for mapping. You want each individual unit’s consolidated, bottom-up detail to reflect that business unit’s paradigm. By the end of the week, they should sign off that, yes, last year they had $243.5M in revenue, spent $192.2M, and they currently have 1,322 people. Without this sign-off, you’re in trouble come week 3, but the good news is that this is their data, right? So if it doesn’t tie out, the onus is on them, since you are not doing any interpretation. Nail this down to sign-off, and you’re ready for week 3.
Week 3: Mapping
Generally, mapping can be done from 1 dept to 1 branch on your tree, but sometimes the mapping must be jointly performed from dept and acct to your tree. Good to figure this out early, and generally I don’t mind mapping jointly if the added accuracy garners more stakeholder buy-in. There is always a complexity trade-off, however, so tread that based on your circumstances.
So you start with a list of business units, departments, and accounts on the left hand and a consistent hierarchy tree on the right, and you map from the left to the right. It can be done in Excel if the data is small enough. It can be done in Access, or it can be done in SQL Server. It depends upon the complexity and your internal capabilities. You can also hire this out if you have no data analysts available to you (yet, anyway!). End of the week, you can map every BU, Dept, and Acct to a location on your hierarchy.
Week 4: Roadshow
Yup, this is the tough part. Book time well in advance to review the mapped data with each business unit, as well as with the Shared Services stakeholders. Make sure everyone is on board, and don’t let anyone off the hook for vague objections like, “No, this is all wrong.” If it is wrong, find out specifically why. Have them come to you with people that are not in the right places and costs that need to be remapped. Allow this process to be dispassionate. Remember, their data is signed off, and the hierarchy is non-negotiable at the visibility stage. The only thing that can shift is which nodes map to which nodes, and that is surprisingly easy when isolated cleanly like that.
Summary
Remember, when you start playing in people’s sandboxes, they get defensive, even when they stand to gain. By following the above approach, you can limit the emotional objections and proceed with clean visibility as the goal. If you don’t allow changes in the hierarchy during the visibility stage, and if you hold off any thoughts of realignment during this phase, you prevent the exercise from becoming a power play. And that’s the ball game.
Once the visibility is in place, all stakeholders, from Shared Services to Lines-of-Business leadership, will be in a better position to discuss the organization using a consistent set of agreed-upon information.
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