8 - Blog - Global Risk Community2024-03-28T15:05:56Zhttps://globalriskcommunity.com/profiles/blogs/feed/tag/8Organizational DNA: The 4 Building Blocks to Effective Executionhttps://globalriskcommunity.com/profiles/blogs/organizational-dna-the-4-building-blocks-to-effective-execution2020-08-08T05:36:56.000Z2020-08-08T05:36:56.000ZJoseph Robinsonhttps://globalriskcommunity.com/members/JosephRobinson808<div><p></p><p>The most resilient and consistently successful companies have discovered that the devil is in the details of the organization. No <a href="https://flevy.com/blog/wp-content/uploads/2020/06/pic-1-Organizational-DNA-4-Building-Blocks-300x200.jpg" target="_blank"><img src="https://flevy.com/blog/wp-content/uploads/2020/06/pic-1-Organizational-DNA-4-Building-Blocks-300x200.jpg?profile=RESIZE_710x" width="300" class="align-right" alt="pic-1-Organizational-DNA-4-Building-Blocks-300x200.jpg?profile=RESIZE_710x" /></a>company may ever totally master the enigma of execution. But for them organizing to execute has truly become a competitive edge.</p><p>Execution only becomes effective when the company’s DNA is holistically integrated. This means weaving intelligence, decision-making capabilities, and a collective focus on common goals widely and deeply into the fabric of the organization so that each person and unit is working smartly and together.</p><p>The best <a href="https://flevy.com/browse/stream/organizational-design">Organizational Designs</a> are adaptive, self-correcting, and robust. But creating such an organization does not happen quickly. It can take several years to get the basic right.</p><p>In understanding Organizational DNA, one needs to have a full grasp of the 4 bases of Organizational DNA, as well as the 8 core elements of the Organizational DNA. While the 4 Bases are the building blocks, the 8 core elements are the blueprint for Organizational Design.</p><h3><strong>The 4 Building Blocks of Organizational DNA</strong></h3><p>Organizations must have a good operational understanding of the <a href="https://flevy.com/browse/flevypro/organizational-dna-4-building-blocks-4190">4 Building Blocks of Organizational DNA</a> to better perform effectively and efficiently. The 4 Building Blocks are Structure, Decision Rights, Motivator, and Information.</p><p>Structure is the organization of business units around customers, products, or geography. In principle, structural choices are made to support a strategy. However, in practice, often a company’s organizational structure and strategic intent do not match.</p><p>Decision Rights specify who has the authority to make which decisions. Often, these put the flex o the organization chart and define where responsibility lies.</p><p>Motivators are incentives, rewards, and systems that enable employees to perform their functions well. It shows how people respond rationally to what they see, understand, and rewarded.</p><p>Information is one critical base in the company’s DNA that underly the company’s ability to ensure clear decision rights and motivate people. Information is among the most underappreciated contributors to <a href="https://flevy.com/operational-excellence">Operational Excellence</a> and competitive advantage. Often, better information flows did more than keep costs down. It helps allocate scarce resources far more efficiently than before.</p><h3><strong>Discovering the 8 Elements of Organizational Design</strong></h3><p>It is best to understand the <a href="https://flevy.com/browse/flevypro/organizational-dna-4-building-blocks-4190">8 Elements of Organizational Design</a> as it is the blueprint for Organizational Design.</p><p><a href="https://flevy.com/browse/flevypro/organizational-dna-4-building-blocks-4190" target="_blank"><img src="https://flevy.com/blog/wp-content/uploads/2020/06/pic-2-Organization-DNA-4-Building-Blocks.png?profile=RESIZE_710x" width="750" class="align-full" alt="pic-2-Organization-DNA-4-Building-Blocks.png?profile=RESIZE_710x" /></a></p><p>Let us take a look at the first 2 rungs. The first 2 rungs focus on Authority, governance of behavior, and how a company governs behavior.</p><p><strong>Rung 1: Authority and governance of behavior</strong></p><p>In terms of formality, in the formal part, how decisions are made are elements that a company can precisely articulate. This can be expressed through governance forums, decision rights, decision processes, and decision analytics.</p><p>In the informal part, how people instinctively act or take action is the informal part. This can refer to values and standards, expectations, and unwritten rules, and behaviors.</p><p><strong>Rung 2: The way a company governs behavior.</strong></p><p>The formal part is the Motivators on how people are compelled to perform. These can be represented by monetary rewards, career models, and talent processes.</p><p>The informal part is commitment. It is how people are inspired to contribute. It is represented by shared visions and objectives, individual goals and aspirations, and sources of pride.</p><p>The first 2 rungs are essential in ensuring that the Organizational Design has a balance of both authority and behavior.</p><p>The 3rd and 4th rungs focus on flows of knowledge and insight, as well as structure and networking. These 2 rungs are essentially important in ensuring that appropriate structure and network is in place to support flows of information and insights.</p><p>Interested in gaining more understanding of the <a href="https://flevy.com/browse/flevypro/organizational-dna-4-building-blocks-4190">4 building blocks to Organizational DNA</a>? You can learn more and download an <a href="https://flevy.com/browse/flevypro/organizational-dna-4-building-blocks-4190">editable PowerPoint about <strong>Organizational DNA: 4 Building Blocks</strong> here</a> on the <a href="https://flevy.com/browse">Flevy documents marketplace</a>.</p><p><strong>Are you a management consultant?</strong></p><p>You can download this and hundreds of other <a href="http://flevy.com/pro/library/frameworks">consulting frameworks</a> and <a href="http://flevy.com/pro/library/consulting">consulting training guides</a> from the <a href="http://flevy.com/pro/library">FlevyPro library</a>.</p></div>Taking a Strategic Move to Post-merger Integration (PMI): Financial Integrationhttps://globalriskcommunity.com/profiles/blogs/taking-a-strategic-move-to-post-merger-integration-pmi-financial2020-07-11T06:30:06.000Z2020-07-11T06:30:06.000ZJoseph Robinsonhttps://globalriskcommunity.com/members/JosephRobinson808<div><p></p><p>Our framework <a href="https://flevy.com/browse/flevypro/post-merger-integration-pmi-financial-integration-4049">Post-merger Integration (PMI): Financial integration</a> is every organization’s guide to achieving the financial alignment of both Buyer<a href="https://flevy.com/blog/wp-content/uploads/2020/03/pic-1-Financial-Integration-300x200.jpg" target="_blank"><img src="https://flevy.com/blog/wp-content/uploads/2020/03/pic-1-Financial-Integration-300x200.jpg?profile=RESIZE_710x" width="300" class="align-right" alt="pic-1-Financial-Integration-300x200.jpg?profile=RESIZE_710x" /></a> and Target.</p><p><a href="https://flevy.com/browse/stream/post-merger-integration">Post-merger Integration</a> is a highly complex process. It requires swift action as well as running the core business activities simultaneously. There is no one-size-fits-all approach to a successful PMI Process. However, careful planning focusing on the strategic objectives of the deal and the identification and capturing of synergies will help maximize deal value.</p><p>Another critical factor in PMI is pursuing Financial Integration. Financial Integration is the alignment of the finance functions of the Buyer and Target.</p><h3><strong>Why Financial Integration?</strong></h3><p>Immediately from the start of the deal, the new organization gets to be dependent on the Finance function to ensure a successful integration process. Synergies must be captured in order to maximize deal value and provide combined organizations with the flexibility to grow.</p><p>When pursuing Financial Integration, there must be an integration of business operations, streamlining of the internal control environment, provision of accurate and consistent financial reporting, ensuring tax compliance jurisdictions if the deal is cross-border, and the founding of interim legal structure and business processes. When setting the right direction for a streamlined finance function, it is important that the organizations must already tackle critical matters while still in the early stages of a deal.</p><p>The establishment of clear reporting lines must already be agreed upon and set up. Accountability for financial operations, management reporting, control of expenses, and accounting closing procedures must already be established and clear between the Buyer and the Target. These play a vital role when the organization undertakes a <a href="https://flevy.com/strategic-planning">Strategic Planning</a> geared towards the development of a Financial Integration Strategy and Plan.</p><h3><strong>The Financial Integration Strategy: What We Need to Know</strong></h3><p>The Financial Integration Strategy can only be defined and crafted only when immediate areas that require action have already been identified. The Strategy must be developed based on <a href="https://flevy.com/browse/flevypro/post-merger-integration-pmi-financial-integration-4049">8 key areas of focus</a>.</p><p><a href="https://flevy.com/browse/flevypro/post-merger-integration-pmi-financial-integration-4049" target="_blank"><img src="https://flevy.com/blog/wp-content/uploads/2020/03/pic-2-Financial-Integration.png?profile=RESIZE_710x" width="750" class="align-full" alt="pic-2-Financial-Integration.png?profile=RESIZE_710x" /></a></p><ol><li><strong>Overall Organization</strong>. As the first key area, this focuses on the overall set up of the Financial Integration processes. This starts with establishing the reporting lines from <a href="https://flevy.com/browse/flevypro/post-merger-integration-pmi-day-one-activities-4046">Day One of the PMI process</a>. This also includes the establishment of a transition plan that is aligned with the process and systems migration plan.</li></ol><ol start="2"><li><strong> Internal Controls Environment</strong>. Once the overall organization has been set up, it is important that the internal controls environment is established. This will entail setting up the control procedure from Day One. It is of importance that the controls environment is established since this will mitigate risks and ensure regulatory compliance.</li></ol><ol start="3"><li><strong>Cash/Treasury</strong>. This is the third key area that looks into the cash position of the organization. It is at this point wherein the organization must be able to plan out its cash flow requirements and be able to gain assurance over adequate funding. This key area is very critical when it comes to the financial sustainability of the organization as it ensures that treasury policies are aligned, cash controls are established, cash forecasting and cash management have commenced, and there is an alignment of investments, foreign currency, and any hedging arrangements.</li></ol><p>Aside from the 3 focus areas, the development of the <a href="https://flevy.com/browse/flevypro/post-merger-integration-pmi-financial-integration-4049">PMI Financial Integration Strategic Plan</a> must also give serious consideration on Financial Statements, Procurement, Financial Planning, Cash Controls, and Tax. These 5 focus areas are essentially important as it ensures that Financial Integration essentials are met.</p><p>When this is achieved and the 8 key areas of focus are integrated into the Financial Integration Plan, the new organization gets to prepare itself towards a larger scale <a href="https://flevy.com/browse/stream/transformation">Business Transformation</a> in the future.</p><p>Interested in gaining more understanding of the <a href="https://flevy.com/browse/stream/post-merger-integration">Financial Integration component of PMI</a>? You can learn more and download an <a href="https://flevy.com/browse/flevypro/post-merger-integration-pmi-financial-integration-4049">editable PowerPoint about <strong>Post-merger (PMI): Financial Integration</strong> here</a> on the <a href="https://flevy.com/browse">Flevy documents marketplace</a>.</p><p><strong>Are you a management consultant?</strong></p><p>You can download this and hundreds of other <a href="https://flevy.com/pro/library/frameworks">consulting frameworks</a> and <a href="https://flevy.com/pro/library/consulting">consulting training guides</a> from the <a href="https://flevy.com/pro/library">FlevyPro library</a>.</p></div>