What is Organisational Coherence?
Organisational coherence is a system of ‘views’ and ‘activities and practices’ that align the organisation to its purpose throughout the organisation. It focuses the organisation of what the customer values, removing wasted effort and has mechanisms for resolving the inevitable conflicts regarding competing priorities for resources.
It is formed of three levels:
- Value coherence – the value outcomes you want for the customer and the activities you do to deliver those
- Systems coherence – the way your systems of work are put together to deliver those value activities, and the supporting mechanisms
- Process coherence – the processes that deliver customer value, broken down into sub-processes, assigning clear accountability, authority and details of role
There are several views that give insight into the organisation and the customers it serves. These views provide common frameworks and language for the organisation’s staff to be able to provide customer value in the most efficient and effective manner:
- Value outcomes & activities – i) Organisation wide, ii) departments, iii) teams
- Value Metrics – the metrics at each level within the business to ensure value outcomes and activities are being realised.
- Value delivery heat map – shows the value activities across the performance across the teams
- System coherence – business unit / department – accountability, authority, role clarity. Generally this is Senior Manager groups, sitting under one General Manager.
- Important supporting mechanisms – these generally sit at senior manager or general manager level. An example is the Human Resources department with mechanisms such as Reward and Recognition framework, Hiring and Induction framework etc
- Process coherence – the process of delivering a customer value activity and the accountability, authority and role clarity within each sub process.
- Quality and Friction register – all customer impacting issues are logged for impact and frequency to prioritise improvement efforts.
- Forensic analysis / accounting review – analysing if the organisational spend line up with the value created
Why does your organisation need Organisational Coherence frameworks?
Organisational Coherence is a mechanism to overcome the destructive forces inherent in functional silos, for example, information not being readily shared and personal accountability not being assumed.
“Big, complex companies are typically structured so that decision making is separated according to function, geography and product. That naturally creates silos. Indeed, McKinsey research shows that the most globalized firms pay an economic price for this. Examples of silos in blue-chip firms abound: Sony once had two separate divisions working on creating the same electrical plug without anyone realizing it.” (Foroohar, R “We’ve all got GM problems”).
What is Value Coherence?
Value Coherence is about understanding how the organisation is delivering value to customers.
Many organisations suffer from a lack of clarity of customer outcomes and the activities the organisation is doing to try to achieve these outcomes. There is almost always a gap between the clear descriptions in the vision statement and strategy, when compared to the day to day activities of front line staff and the decisions their front line managers make. This is due to a lack of tools or framework to translate the organisational intent into language and activities that resonate throughout the whole organisation.
- Do you have a consistent language throughout the organisation on how you deliver value to the customer?
- Have you clearly defined the outcomes you want customers to experience, think, feel or receive?
- Have you clearly defined the activities which will deliver those outcomes?
- Do those activities have owners, and have the activities been assessed for effectiveness?
- Do you have metrics in place that measure how successfully the customer experiences the value you are delivering?
- Are you sure that your entire organisation is setup to deliver the critical outcomes to your customers?
- Is this done in a consistent, predictable and coherent way?
- Are the metrics in place to know when and where problems are occurring?
The visibility created by a Value Coherence Map normally results in new insights into the organisation and highlights opportunities for improvement in the Work Systems. It can help to assess whether an organisation is setup for the effective delivery of plans, and can create thought patterns, which ‘switch on’ the organisation.
Value Coherence aligns the entire organisation around your core Value Proposition.
It will also create visibility of successes, for example, if an organisation has a solid strategic direction and a reasonable alignment across their business areas.
Follow the link for an example of our Value Coherence and Process Coherence Mapping.
Posted by Ben Haigh on 30 July 2014