HiTech Co. (Sample Company) Organizational Capability Assessment Discussion Document This sample report was prepared by Mark Youngblood, the developer of the Organisational Agility Assessment instrument. Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Organizational Capability Assessment Table of Contents Purpose and Methodology Summary of Findings Strengths and Enablers for Change Weaknesses and Barriers to Change Preliminary Recommendations Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Purpose & Objectives HiTech’s Strategy Team is evaluating several strategic alternatives. The team wants to ensure that HiTech is ready, willing, and able to implement the selected strategies and sees this Organizational Agility Assessment as a key element in that determination The Objectives for this study include the following Successful Roll-out of the New Strategies Assess the organization’s perceived need for change and readiness and ability to implement these changes Identify organizational strengths that can be leveraged to help with successful roll-out of the new strategies Surface the weaknesses and barriers to change that must be addressed in order for the new strategies to be successful Begin identifying actions that can be taken to address the weaknesses and barriers to change Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Methodology Overview The Organizational Agility Assessment (OAA) is designed to assess an organization’s overall Agility—its ability to innovate and to respond rapidly to marketplace changes Assesses An Organization’s Agility The OAA is designed based on the characteristics of leading edge companies such as Medtronic, Southwest Airlines, Charles Schwab, and Starbucks in conjunction with the processes of complex adaptive (natural) systems The assessment was distributed to a random sampling of 940 HiTech Co. employees including all levels and BU/SUs A total of 465 employee surveys were gathered for this study Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Methodology Overview There were 28 questions in the survey that required a score on a scale of 1 to 7 and two additional freeform comment questions HiTech Overall Scores We focus on the scores 1-2 (strongly disagree) and 6-7 (strongly agree) because this is where the emotional energy is highest 3000 60 2500 50 2000 40 Disagree Neutral Agree 30 20 1500 1000 10 500 0 0 11% 56% 33% Scores #1 #2 #3 #4 #5 #6 #7 Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Methodology Overview HiTech Agility Factor Scores The Agility Factor is the net of the Strongly Agree scores (6 and 7) less the Strongly Disagree scores (1 and 2). This is a simple but powerful indicator of the organization’s overall Agility. We find it to be a more accurate indicator of the organization’s current state than averages of the raw scores. Scores above +10 and below -10 are seen as statistically significant as well as scores that significantly diverge from the overall trend Agility Factor By Question 60 40 1 2 3 20 9 7 4 5 6 8 19 2122 24 23 25 20 16 13 11 12 15 18 0 -20 10 14 17 Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Methodology Overview The overall score falls into four categories, each describing a general type of organization TYPE BRIEF DESCRIPTION I. Bureaucratic “Industrial-era” organization—compartmentalized, control oriented, hierarchical, rigid structures, centralized decision making, inward focus, risk averse II. Managerial Kinder-gentler version of bureaucratic organization —more creative and adaptable but still lags the market, relies on heroic efforts to sustain performance III. Agile Change-adaptive, creative, employees committed to inspiring vision, people are valued, inclusive and participative style, committed to innovation and renewal IV. Dynamic Risk-taking, experimentation and innovation are the norm, authority from know-how, flexible operating environment, energized and committed employees Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Assessment Scores HiTech’s scores indicate an Agility rating of Agile. Relative Rankings Level 1 Bureaucratic Level 2 Managerial Level 3 Agile Average Agility Factor Level 4 Dynamic 21 -30 1st Quartile -10 2nd Quartile 10 3rd Quartile 30 50 4th Quartile Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Capability Overview The questions in the assessment are grouped into five “Capabilities,” all of which are essential elements in creating overall Agility. Capability Description Importance Alignment Organizational commitment to shared vision, values and goals Creates focus and momentum, and provides people with a common reference point for organizing behavior and making decisions Adaptability Employee’s freedom to anticipate and respond to customer needs Enables employees to respond quickly and easily to the rapidly changing marketplace to serve customers and improve the business Collaboration Ability and willingness to cooperate Makes it possible for people to quickly and to achieve win-win outcomes easily work together with a high-level of effectiveness to achieve business goals Innovation Ability to generate and sustain a high-level of creativity & change Provides a constant stream of breakthroughs in performance improvement and new ideas for new products and even new businesses Vitality Energy and commitment that employees bring to their work Creates the conditions where employees want to contribute their discretionary commitment and energy and achieve at their highest level Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Capability Summary Findings HiTech’s Agility Factor scores grouped by Capability are highly positive. Any average above +15 is considered a major strength. Two areas that are markedly lower than the others are Adaptability and Collaboration. This relates to issues that employees have with bureaucracy and lack of cooperation across business units. 30 Capability Summary 25 Alignment Adaptability Collaboration Innovation Vitality 20 15 10 5 0 Agility Factor Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Summary Findings Overall, HiTech is fairly well-positioned to succeed in implementing new strategies Overall, HiTech scores as a low-end “Agile” organization This means that HiTech is above average in the overall marketplace across all industries in its ability to make the changes needed to remain competitive in today’s market There’s a strong belief in the need for change across the company and that HiTech is ready and able to make changes (Q28-29) Strengths Employees are generally happy in their job and feel very strongly that HiTech’s people are its greatest strength (Q1 + Q30 comments) People are loyal to HiTech , committed to its vision*, see it as a company that lives its values and is committed to win-win relationships (Q19, Q21, Q25, Q16) Employees believe that HiTech excels at addressing customer needs and leads in introducing innovations* in the marketplace (Q28) * indicates that there are discrepancies on this point between the statistics and people’s individual comments. Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Strengths — Summary Findings Employee comments reflect strong feelings and a high level of consistency regarding these strengths Employee Comments Were Highly Consistent People — commitment, expertise, experience, and character HiTech market share and years in the industry HiTech brand recognition and superior products Willingness to change Senior leadership Innovation Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Summary Findings In certain areas, the scores indicate that HiTech has barriers to change that need to be addressed in order for HiTech to compete at the highest level Barriers & Concerns People believe strongly that bureaucracy is a problem in HiTech (Q17) There is a perceived lack of cooperation across the organization (Q14) Ineffective communication, including a lack of straight talk, is a top concern across the company (Q28 comments, Q8) People think HiTech lacks urgency and that employees are afraid to take risks and show personal initiative (Q6, Q12) Senior executives at times have dramatically higher scores than do all other employees The business unit “strongly agree” scores were on average 30% higher than those for HiTech overall Business unit #1 had consistently low scores, with “agree” scores averaging 60% lower than the other divisions Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Summary Findings Employees written comments validated scores on the assessment and at other times seemed to conflict with them Barriers & Concerns Siloism and a lack of alignment around a common vision and shared goals are seen as significant issues for HiTech Employees are strongly concerned about the uncertainty of their jobs Employee comments reflect a concern about HiTech’s need to address customer expectations and the quality of products and services Many employees believe that HiTech does not innovate enough and that the competition is ahead in certain areas People wrote that they felt overwhelmed by too much change and lack the resources they need to do their jobs Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved. Remaining Sections of the HiTech Report Detailed Results for Organisation and Business Units Conclusions & Next Steps Strategic Consulting Group © 2001 Quay Alliance, Inc. All rights reserved.