Home Credit Indonesia

Wiwik Wahyuni

The way we Home Sapiens have governed and organized ourselves has fascinated countless thinkers as numerous theories have been offered why we have managed to outlast the other Homo species. A theory by Yuval Harari offers to suggest that our ability to tell stories is, in fact, the single most important competitive advantage we have as the apex species. Organizations throughout human history have been exactly about that: creating and telling storiesto a number of people sharing the same vision, mission, values, and purpose.

Organizations have evolved greatly over time. From the color codes laid out by Frederic Laloux, from Red, Amber, Orange, and Green to Teal, we can learn a thing or two about how we should govern ourselves. We went from highly hierarchical Red and strived towards the Teal, where self-management and purpose-driven cohesion are championed.

How are we supposed to run them today? And from an HR perspective, how do we know if they’re working effectively? How do we govern jobs and the people in them? How does the design of the organizations and jobs impact the way people perform in the organization, with the multiple black-swan effects, including the pandemic?

For business organizations, before we talk about how organizations work, let’s start at the top.

Business Model

Think of Airbnb and Uber – business models that completely change our perspectives. Are we a breakthrough people will benefit a lot from? How will what we do as an organization contribute to the better lives of those around us? If there’s anything the black swans have taught us, it’s the fact that we’re never fast enough to answer these questions timely.

Operating Model

Efficiency is always the name of the game in the way we run the business’ operations: a value chain that produces no waste and service that exceeds expectations of quality, cost, and time, on top of superior customer experience. Insourcing and outsourcing are often options people consider.

Organization Model

Once we’re sure how to run the business, the next thing is how we design the organization. Effectiveness is the name of the game here. And two dimensions govern the effectiveness of most modern organizations:

- horizontal – if any overlaps across Functions where multiple teams working on the exact same things, or blind spots, areas where every team in the organization is sure everyone else is doing it but in the end nobody ends up doing it, happen, or worse in some organizations, proliferate. Reduce overlaps or blind spots as much as possible to be effective.

- vertical – where traditionally hierarchical organizations still often create excess in layers – sometimes too deep from the CEO to the lowest part of the organization – and span of control – sometimes too small managers don’t have enough people to manage effectively; conversely, too big teams get undermanaged. Understand your business and decide if, for example, an organization of just 2,500 employees really requires a 6-layer organization. If it’s 6X6 – 6 layers from top to bottom and Managers average six direct reports – it would be an optimal setup for an organization of 7,776, mathematically speaking. We can immediately spot the room for more effectiveness here.

Job Model

When the charts are there, we need to go deeper into the expectations of each box – job. We always look at jobs from an input, process & output point of view. We analyze the competencies required in order to do the main activities, so thejob can be expected to deliver results. This job analysis process produces a job description – a standard deliverable so synonymous with HR everyone consistently mistakenly expects HR to create it for the leaders – top to bottom.

“Organizations have evolved greatly over time. From the color codes laid out by Frederic Laloux, from Red, Amber, Orange, and Green to Teal, we can learn a thing or two about how we should govern ourselves”

After expectations towards the job are fully clarified, the next process is job evaluation, where from the KornFerry model widely used in HR circles, the input is seen from a know-how & managerial skill point of view, the process from the problem-solving requirement and output from accountability – both monetary and non-monetary result perspectives. This results in grades attached to the job. Please emphasize the word ‘grades attached to the job,’ as up to this point; we’re not yet talking about people yet.

Number of positions in a job required – from a workforce planning perspective

This is, at times, underestimated. We know how many positions we need at different jobs, but not on the granular level we want – how many, when, where, the typical questions posed in the workforce planning stage. When we’re completely sure of the job scope and grades, we can correctly identify our capacity requirement: how many positions are required in each job and by when.

Only then People

When all these boxes are ticked, we would know exactly what kind of people we want in the positions – internal or external. The people model has shifted over time in its variation, from strictly job-centered to people-first and now skills-first approach. But the underlying governing thought of the alignment between the business, organization, and people doesn’t change.

Agile in the picture

As the world around us gets more complex (even chaotic, as we learned from the early onset of the pandemic), the confidence we have in the structure we have around organizations and jobs starts to shake. We’ve asked ourselves: are we fast enough to respond to the changing environment? How do we deal with such change? Can my organizations and team hold? This is how agility picks up its relevance. Organizations today have become more self-regulating, and jobs have become more loosely governed in setting role expectations. The way they govern agility greatly varies from one organization to others – Spotify model, Sephora, Zappos, etc. There’s no one-fit-for-all when it comes to agile setup. The most important thing is the growth mindset to help build their own definition of Organization Management 102.