Professional Documents
Culture Documents
1C Hay's 7-Lever Model PDF
1C Hay's 7-Lever Model PDF
FOR
MANAGEMENT CONSULTING
1
The MODEL
People
Competence
Culture Reward
Strategic Leadership
Results
Intent
Work Management
Processes Processes
Organisation
Design
↓
2
Leadership:
The ability of leaders to mobilize the organization around the strategy
People
Competence
Culture Reward
Strategic Leadership
Results
Intent Leadership
Work Management
Processes Processes
• Is there a compelling vision which
inspires the organization? Organisation
Design
• Are leaders creating clear
expectations of others?
• Do leaders eliminate obstacles and
clear the path?
• Is leadership walking the talk?
3
People Competence:
The competence of people (individually and as teams) to carry out the strategy
People
Competence
Culture Reward
4
Reward: The financial and non-financial reward structures
that drive the desired behaviors
People
Competence
Culture Reward
Strategic Reward
Leadership
Results
Intent
Management
• Is reward structure
Work aligned with
Processes
strategy and Processes
culture?
• Is reward attracting and Organisation
retaining the
right people? Design
5
Management Process:
The key processes through which management influences people
People
Competence
Culture Reward
6
Challenges for Management
in a Global Environment
Stage 2 Stage 6
Stage 3
Stage 5
Plan Operations
-Map out the Operational
Plans and resources to Monitor & Learn
achieve objectives
Stage 4
Source: R.S. Kaplan & D.P. Norton, “Mastering the Management System,” HBR, Jan. 2008, p.65
Management Process:
The Glue that holds the organization together
MANAGEMENT
PROCESSES:
The Organization’s
Planning, Technology
Strategy
Control,
Rewards
Individuals
Competitors Customers
and
Roles
Adapted from M.S. Scott Morton & J.F. Rockart, “Implications of Changes in IT for Corporate Strategy,” Interfaces, Jan-Feb, 1984
Organizational Design:
The way in which accountabilities are organized and managed
12
Work Process:
The sequence of activities through which resources are
transformed to meet customer needs
Work Processes
People
• Have you identified key work processes
Competence
required to support the strategy?
Culture • Are Reward
your key work processes efficient and
effective ?
• Are organizational hand-offs effectively
Strategic Leadershipmanaged?
Results
• Is there clear process ownership?
Intent
Work Management
• Do process
Processes members understand overall
Processes process requirements?
• Are policies and technology aligned with
Organisation
Design work processes?
• Does information flow to where it is
needed, when it is needed?
13
Culture:
The way in which the organizational norms support the strategy
Culture
People
Competence
• Do you know the values & behaviors
Culture
which support success?
Reward
• Is there a consensus around the
new value set?
Strategic Leadership• Does behavior match espoused
Results
Intent values?
Work Management
Processes • AreProcesses
there distinct sub-cultures
within the organization?
Organisation
Design • What is distinct about your culture?
14
What levers in the organization offer
the greatest opportunity for impacting results?
People
Competence
Culture Reward
Strategic Leadership
Results
Intent
Work Management
Processes Processes
Organisation
Design
15
Client’s Expectation(s)
• Independent viewpoint
• Special qualifications
• Variety of products
• Quality of products
• Positioning
• Prices as compared to similar products in the market
• Price protection due to Government policies
• Quality customer services
• Effective distribution system
• Effective sales promotion
• Profile advertising
• Company and product image
• Effectiveness marketing management information
system
Operations Capability Factors
• Factors related to production system: capacity,
location, layout, product or service design, work systems,
degree of automation, extent of vertical integration
• Plant location
• Sources of supply
• Technical collaboration
CONSULTING STYLES
a) Objective Observer
b) Process Counselor (or Process Consultant)
c) Fact Finder
d) Resource Identifier or Linker
e) Joint Problem Solver
f) Trainer/Educator
g) Information Specialist (or Content Expert)
h) Advocate
Human Capability Factors
• Factors related to Systems & Processes: SOPs, System for
manpower planning, selection, development, compensation,
communication, appraisal, position of the HR development within
the organization
Observer?
It is expensive
Retainer basis
Fixed-price assignments
31
Contingency fees
Outsourcing
All these reasons underlie one overall objective: to improve the overall
performance of the outsourcing firm
Rationale for outsourcing
Advantages and disadvantages of outsourcing
Advantages Disadvantages
Optimal usage of knowledge, equipment and Continuous follow-up and monitoring of the
experience of third party supplier relationship necessary
Outsourcing leads to easier and more focussed Risks of leakage of confidential information
primary processes in the organization
Input through an independent party’s point of view Performance incentives and penalties
which reduces the risks of introvert short-
sightedness in the organization
Reimbursable turn-key The provider is compensated for all costs that he incurs for executing the project or a
certain activity
Semi lumpsum turn-key Part of the work is compensated on a fixed price basis; the other part is compensated
on a reimbursable basis
Lumpsum fixed price The supplier agrees to complete the work against a fixed price based upon a
predefined, detailed scope of work. Everything that is not included in the scope of
work is settled between parties on an ad-hoc basis
Cost reimbursable The supplier agrees to complete the work on open book, open cost basis based upon
a general scope of work. There is no sharing of savings
Guaranteed maximum The same as a cost reimbursable contract, only the outsourcer pays to a certain
contract agreed maximum. The extra costs are for the supplier
Share the savings / loss The services are paid for on a reimbursable basis. When the contract costs are higher
(target price contract) or lower than the original budget (target price), the difference is shared between
parties on a pre-agreed basis
Unit rate Rates are agreed for regular, routine activities, the size of which cannot be
anticipated. Rates are defined per m2 of paint, meter of cable to be installed, etc.
Payments are made based upon actual use.
The Transition phase
• Many authors have pointed out that in dealing with these risks,
detailed contracts will not solve the problem. Trust and partnership are
more important.
Critical success factors of outsourcing
Almost 25 years ago, when the IT ‘revolution’ was yet to start in India, the
fresh graduates had very few job options – only in government organizations
and public sector organizations. Thanks for the IT outsourcing industry,
today’s opportunities for the fresh engineers are extraordinary. And, every
graduate, irrespective of his/her major, is opting for a career in IT. That is no
surprise, when an engineer with 2 years experience gets more salary than the
Professors who taught him.
In many other countries, while the reasons for lesser enrollment of girls in
computer science are being probed, in India that is THE field of choice for
majority of the girls. A visit to any computer science classroom shows that
almost 50% of the students are girls. It is a welcome trend; the parents of
girls are encouraging their daughters to take up computer science stream as
the jobs are “soft.”
Adapting to the American way of living has become a reality for many working in an Indian call
center …[The] process of Americanization includes training for three to six months, learning the
accent, slang, lingo, sports, history, geography, films and politics. Some companies provide
speech therapy so workers can sound like an American. The employees watch endless episodes of
Friends, Seinfeld, Oprah…
This process of Americanization has resulted in number problems for call center
employees…Many are finding it difficult to find a common ground between the two cultures and
identities - Indian and American…The remaking of Hari into Harry for the convenience of the
American customers involves severe personality costs, as the person's name is vital to his or her
identity, self-esteem and dignity.
On the social side, the most significant impact of call centers has been on the families of the
employees. First, it is creating an entirely new segment of Indian youth who are being slowly
alienated from the Indian culture and values. Also, it offers an opportunity for the employees to
live a perpetual nocturnal life. They have little time to spare for their family members. They no
longer get involved in the family get-togethers or marriages or festivals.
Excerpt from USA Today, “Why Small Business Must Hire Offshore,”
vol. 133, December 2004
As the costs of starting and operating a company in the United States have
increased, it has become difficult for small companies to compete in the global
marketplace. As a means of survival, many small companies have looked to
outsourcing as a way to cut costs and increase efficiency in their businesses.
Outsourcing provides small firms with an excellent way to save money and
become more profitable. The efficiency enabled by outsourcing also makes
these companies more attractive to investors, thus helping them grow even
more. As highly educated workers in India command much lower salaries
than do U.S. workers, outsourcing has become an attractive alternative for
small companies looking to get ahead. The benefits to American companies
from outsourcing can be huge, but for many small companies outsourcing is
simply a matter of survival.
Excerpts from “Offshoring of White-Collar Jobs Is Shifting the Global
Balance of Power” by Ashutosh Sheshabalaya
(From Rising Elephant: The Growing Clash with India over White-Collar Jobs and Its
Meaning for America and the World. Monroe, ME: Common Courage Press, 2005.)