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144 The Conductive Organization ensured that any political grievances (such as might have arisen around the perceived weakening of functional power) could be overcome. The goal was always to involve everyone in this transformational journey. The parallel efforts to shape a values-based culture across the organization reinforced the new direction for the unit. Everyone could see that bold attempts to shape a new culture required equally bold approaches to reconfigure the structure in order to safeguard and leverage the new culture. Individual Capability Practice The purpose of the Individual Capability Practice was to ensure that people management processes were conducive to high levels of performance for individuals and the organization as a whole. A key focus of this practice was to shape people management policies and practices that enabled self-initiation and collective ownership. Employees were encouraged to own their performance and development and not be dependent on their managers or a separate body, such as HR. The Individual Capability Practice developed approaches for performance self-assessment, 90-Day Plans, and values assessment. Membership Services To increase employee capabilities to better meet customer expectations, Clarica integrated all HR functions into the Strategic Capabilities Unit, refocused them, and renamed the new subunit Membership Services. The name Membership Services was chosen to reflect the belief that the term “human resources” objectifies people and suggests a commodity the organization owns and can do with as it likes—a notion that conflicts with the knowledge-era precept of generalized reciprocity. Clarica’s executives recognized that to live its core values, people needed to share a strong sense of membership in the organization and not to feel like an anonymous resource or cog in the wheel. Structure: The Custodians of Conductivity 145 Membership Services was organized to provide a four-tiered service approach to meet employee needs (see Figure 8.3). Tier 0, the first level of service, was designed to be self-service. All peoplemanagement policies and processes were fully outlined on the corporate intranet and accessible by all employees from their desktops. To achieve their objective of having 70% of all member-related transactions serviced at Tier 0, Clarica considered all new policies and processes in light of how they would be provided at Tier 0. Tier 0 offerings ranged from enabling employees to correct their personal details in the organization’s files, to hiring a new employee, to accessing calculators that helped employees identify their pension value. Membership Service’s home page was the main vehicle for Tier 0 delivery. It included general information about the group, details of people policies and practices, a section called “manager’s how-to” and another called “member’s how-to,” and functional information on specific topics such as benefits, compensation, payroll, policies, and recruiting. Membership Services Experts Tier 3 Member Relations HR Systems, Knowledge and Admin. Team Compensation & Benefits Payroll Recruiting & Selection Pension & Retirement Savings Tier 2 phone inquiries and requests Tier 1 e-mail inquiries and requests Tier 0 Self-service via intranet (employee/manager forms, policy and process information) Client Access Figure 8.3 Clarica’s Membership Services’ Tiered Approach 146 The Conductive Organization The manager’s how-to section provided managers with the requisite knowledge to process bonuses, complete transfers, and fill a vacancy. By clicking on the “filling a vacancy” link, the inquiring manager would be given a detailed step-by-step template for the hiring process, including creating a job posting, assessing candidates, and understanding staffing and transition policies. For questions that required further elaboration, managers and other employees could move to Tier 1, where they could email a Membership Services Representative. It was then the responsibility of the representative to find the answer and respond quickly. If the employee preferred, or if the question required a contextual explanation, Tier 2 was available for telephone follow-up by a representative. At Tier 3, employees could access Individual Capability Consultants, who provided personal interventions to resolve more complex issues, perhaps helping a manager think through and articulate a staffing strategy or facilitate a coaching relationship between an experienced employee and a recent recruit. Tier 3 was also the level at which Clarica dealt with sensitive issues such as a case of conflict between employees or sexual harassment. Individual Capability Architects Within the Individual Capability Practice, five architects were responsible for developing policies and processes required for different areas, including career development, capability mapping, recruitment, and compensation, incentives, and benefits. Working with a firm called Recruit Soft, Clarica created a webenabled resourcing approach by which the Individual Capability Practice could craft innovative processes. Employees could manage their career development via the intranet. All open project assignments were placed on a website, with the required assignment profile. Not only could employees apply for projects when assignments arose, but they could submit their resume to the site and be instantly alerted when a match was made between an open or new assignment and their skills. This resourcing tool was not just for Structure: The Custodians of Conductivity 147 internal use but was made available to external people interested in working for Clarica. Potential recruits submitted their profile to the site and were contacted immediately when a match was made. A sixth architect within the Individual Capability Practice, responsible for learning, became part of the Knowledge Team, helping to ensure that knowledge and learning became fully integrated. Organizational Capability Practice The Organizational Capability Practice had the mandate to ensure the alignment of leadership, culture, structure, and strategy—the core organizational capabilities. The team included a leader and 12 organizational capability consultants. The consultants were located in the business units, integrating Strategic Capabilities with their internal business partners. Most large projects or any significant business team within Clarica had an organizational capability consultant working as a full-fledged team member. One of the Organizational Capability Practice’s contributions was to facilitate and accelerate the changes these business teams aimed to achieve. The consultants operated as a community of practice, with the Organizational Capability Practice leader acting as the facilitator. They had a responsibility as a community to enhance the change readiness of the organization as a whole, to build explicit knowledge for this purpose, and to share their tacit knowledge. As they oversaw and facilitated the adoption of effective change management processes, the consultants played a key role in support of organizational transformation and renewal. Their work served to ensure that all employees were engaged in representing the brand and the value proposition of the organization to its customers. They supported the managers of their business units in placing their strategic initiatives into a cohesive organizational framework that could be readily understood. An important part of the Organizational Capability Practice mandate was its contribution to the evolution of a culture that gives 148 The Conductive Organization full expression to the core values of the organization. They mentored individuals in aligning their leadership practices to the core values of the organization. At the team level, they maintained a clear vision of how they would achieve team goals through the application of core values. The Brand Practice In the Strategic Capabilities Unit model, the Brand Practice sits between the Individual and Organizational Capability Practices. This placement is purposeful as it provides a customer dimension to the focus of the unit. Central to Strategic Capabilities’s mandate was to increase the capabilities needed at all levels to build deep relationships with the customer. The brand promise applies equally to employees as well as customers, so the Brand Practice helps ensure congruence of internal and external brand. Furthermore, being placed with a Strategic Capabilities Unit ensures that the brand promise is formally recognized as a strategic capability of the corporation and not just a clever piece of marketing. Objectives for the Brand Practice included:      Accelerate development of Clarica’s distinctive market presence and its impact on the growth of the business. Focus on the customer experience provided by its agents with the support of the services and solutions Clarica had to offer. Develop specific action plans to accelerate the building of brand capabilities throughout the entire corporation. Define, communicate, and leverage the linkage between employee and customer branding. Foster the adoption of “clarity through dialogue” as part of how the organization conducted everyday business. Clarica CEO and president Robert M. Astley said at the corporation’s Annual General meeting in 2001, “The brand promise clarity through dialogue is at the core of our business model at Clarica. We have built our business on the strength of relationships to deliver on Structure: The Custodians of Conductivity 149 our brand promise.” (1) The executive management team believed that the brand should be managed as a strategic capability, with a natural alignment to the Strategic Capabilities Unit. Knowledge Team The Knowledge Team embodied the sociotechnical approach that was at the heart of Clarica’s overall capability and relationshipbuilding efforts. Its role was to provide the technology, tools, and processes necessary for all employees to acquire the knowledge they needed to acquire in real time, to best support colleagues, and to effectively serve the customer. The Knowledge Team was responsible for both the “knowledge as stock” and “knowledge as practice” aspects of the knowledge strategy. The Knowledge Depot was created on the corporate intranet to access the collective information of the organization. And communities of practice were sponsored to support knowledge exchange. The Knowledge Team shaped the technology platform and the collaborative processes that defined the architecture providing access to knowledge repositories and membership in communities of practice. It was also responsible for the ongoing development of Clarica Connects, the corporate intranet. As part of its role, the Team established a collaborative approach, working with knowledge stewards across the business units to design features and maintain content. In addition to developing an integrated architecture at the organizational level, the Knowledge Team supported specific knowledge initiatives in the business units. These projects demonstrated the potential business impact of knowledge tools and processes across the organization, developing cross-functional approaches that leveraged synergies and enabled knowledge flow. New Organizing Structures at Armstrong The evolution of organizing structures at Armstrong demonstrates the transformation process underway to become a more highly con- 150 The Conductive Organization ductive organization. In the early 1990s, Armstrong was serving markets in Canada, the United States, the United Kingdom, Europe, and the Middle East with a full line of products in relative autonomy from the parent organization. Each group had traditional functional departments reporting to general managers or managing directors. There was little cross-functional interaction, and within the functional areas there were few standardized processes. As globalization forces emerged and free trade was implemented in North America, the need for improved customer service became a priority. The first phase of transformation was initiated by two strategies: developing a global product focus and developing a common IT business process. Armstrong de-emphasized local autonomy and legal entities and implemented common IT systems and processes across the organization. However, each operating unit was designated as a global center of product excellence. The global product teams provided expertise to local sales efforts in a matrix system. Each product team had global profit and loss, manufacturing, research and development, and marketing responsibilities. Business units were smaller and driven through a complex matrix to compete by product type at the global marketplace level. Traditional legal entity boundaries dissolved, and the traditional functional silos within product groups were transformed into tightly knit teams. The IT structures and processes became an entrepreneurial framework in which these business units could easily and effectively tap into the company’s larger network system. By the mid 1990s, Armstrong was well on its way to developing a more self-initiated culture based on the values of learning and collaborating. It had also gained a deeper understanding of the business’s significant intangible assets. Through the application of the Enterprise Capital Model, Armstrong began to explore the customer-based needs of its markets. As a first step, it globalized its marketing function in an effort to more deeply understand the value-added products and services required by its customers. Armstrong also found from the analysis of value network mapping that customer clusters were forming and calibrated approaches to bring customers with like needs together (see Figure 4.4). Structure: The Custodians of Conductivity 151 With the Customer Dialer (see Chapter 4) putting the customer at the center of the organization and calibrating capabilities to meet customer needs, the organization has now evolved to focus on customer clusters. Strategies are aligned with organizational and individual capabilities and core values held by the organization and the customers to add value at both the customer and the customer cluster levels. Each customer cluster shares value propositions with other parts of the organization, and Armstrong has become more aware of the intangible flows of value and knowledge created by a deeper understanding of customer needs. To facilitate these structural changes, Armstrong created a Management Board, consisting of managing shareholders and advisors, and a Leadership Board, representing the local geographic regions and functional capabilities of the organization. The Leadership Board is responsible for contributing to the strategic development process and the implementation of the strategic and business plans. This team is collectively responsible for delivering the performance of the business (see team leadership model Figure 10.4). Armstrong’s evolution from a traditional functional structure to global product business units to customer cluster focus has taken the organization through a huge learning process that has been enabled by significant IT support structures. A new and vital culture focused on innovating with the customer has emerged. Conclusion Both Clarica and Armstrong have found that new organizational structures better support their evolution to a more highly conductive organization. Specifically, both organizations have found that we can:   Leverage branding to develop a distinctive customer and employee experience Facilitate the accelerated development of individual and organizational capabilities 152      The Conductive Organization Support the effective generation and transfer of knowledge across the organization Support accelerated change to realize business strategies Reinforce self-initiation of employees Support a high-performance organizational climate Remove “organizational walls” through communities of practice. Customer-calibrated structures help shift the organization from a make-and-sell to a sense-and-respond configuration, establish new mindsets, and create first-mover advantage in its marketplaces. With the strategic capabilities units in particular, we’ve taken early steps in rethinking internal configurations for the knowledge era. The continuous evolution, or rethinking and recalibrating, of how work is organized and accomplished is a key competency for the knowledge era. A perpetual question for all knowledge-era organizations will be whether they’re arranged appropriately for the rapid creation of capabilities and the deepening of all their relationships. Asking this question at every step of their evolution may guarantee that emerging configurations for the knowledge era don’t repeat the turf wars and performance-depleting behaviors of their industrialera ancestors. Emerging Principles  The most exciting organizational structural experiments over the next decade will be dismantling industrial-era functions and replacing them with knowledge-era configurations.  The conventional human resources function is essentially obsolete.  Employees need to be self-initiated in their own development plans.  If the organization is to live its core values, people need to share a strong sense of membership in the organization. Structure: The Custodians of Conductivity 153 Reference 1. Robert M. Astley, President and Chief Executive Officer, Clarica Life Insurance Company. Keynote address to the 2001 Annual and Special Meeting, Toronto, Canada, April 2002.