10 - Organization Capital Readiness Flashcards
What is organization capital?
The ability of the organization to mobilize and sustain the process of change required to execute the strategy.
What does high organization capital enable within an enterprise?
Integration of individual intangible and tangible assets aligned to achieve strategic objectives.
What are the typical organization capital objectives identified in strategy maps?
- Build leaders
- Align the workforce
- Share knowledge
- Focus on the customer
What are the four components that organization capital is typically built upon?
- Culture
- Leadership
- Alignment
- Teamwork
What is the first step in developing an organization capital strategy?
Define the change agenda implied by the broader strategy.
What are the two categories of objectives that fall under the change agenda for organizations?
- Behavioral changes required to create value for customers and shareholders
- Behavioral changes required to execute the strategy
What are three behavioral changes associated with value creation?
- Focus on the customer
- Be creative and innovative
- Deliver results
What are four behavioral changes associated with executing strategy?
- Understand the mission, strategy, and values
- Create accountability
- Communicate openly
- Work as a team
What organization capital objective did Crown Castle International focus on to shift to internally generated growth?
- Communicate new strategies to employees (Culture)
- Develop leadership and accountability (Leadership)
- Link pay to performance (Alignment)
- Improve global knowledge management (Teamwork)
What was Ingersoll-Rand’s organization capital goal?
“Leverage the power of our enterprise through dual citizenship.”
What were Media General’s two organization capital objectives?
- Promote a culture of change and empowerment (Culture)
- Improve employee communication (Alignment)
How is culture defined in the context of organization capital?
The predominant attitudes and behaviors that characterize the functioning of a group or organization.
What is the relationship between strategy and culture according to the text?
Strategy dictates culture rather than the other way around.
What was the transformation faced by Information Management Services (IMS) in the early 1990s?
IMS had to compete for both internal and external customers and shift from a cost center to a profit center.
What cultural change objective did many organizations adopt in response to market changes?
Customer focus was the most frequently identified change.
What does accountability play an important role in?
Organizations that historically were internally focused and now had to become customer- and market-focused.
What is the importance of open communications in organizational strategies?
It is crucial for strategies that require high degrees of integration.
What is the significance of employee surveys in measuring culture?
They help define ambiguous concepts like culture and climate more precisely.
What is the difference between culture and climate?
Culture reflects predominant attitudes and behaviors, while climate includes organizational influences on employees’ motivation and behavior.
What is an example of a question used to measure a productive work environment?
Do I know what is expected of me at work?
What is the purpose of the questions regarding work expectations and resources?
To measure a healthy organizational climate
The questions assess employee satisfaction and engagement levels.
How does culture differ from climate in an organization?
Culture captures shared meanings and values, while climate refers to policies and routines as perceived by employees
Culture is descriptive; climate is a construct developed by psychologists.
What are values in the context of organizational culture?
Beliefs espoused by senior executives, such as communication, respect, integrity, and excellence
Values guide the overall direction but may not translate into specific employee behaviors.
What is the Organizational Culture Profile (OCP)?
A measurement instrument that ranks fifty-four value statements about an organization’s perceived importance
Developed by Charles O’Reilly and colleagues to assess organizational culture.
List the eight independent factors identified in the OCP.
- Innovation and risk taking
- Attention to detail
- Results-focused
- Aggressiveness and competitiveness
- Supportiveness
- Growth and rewards
- Collaboration and teamwork
- Decisiveness
These factors help map an organization’s culture.
What is the significance of consensus within a unit regarding culture?
It represents the culture of the unit and indicates whether it is consistent with the organization’s strategy
Lack of consensus reflects a lack of a common culture.
What is the role of leadership in managing transformational change?
To mobilize and focus the entire workforce for successful change
Effective leaders energize and sustain transformational programs.
What are the two approaches to defining the role of leadership?
- A process for developing leaders
- A leadership competency model
Each approach provides different insights into effective leadership.
What are the three general categories of desired leadership competencies?
- Creates value
- Executes strategy
- Develops human capital
These categories help define what leaders should achieve.
What is the importance of accountability and alignment in leadership?
Links enterprise strategy to personal performance and ensures that leaders and teams are working towards common goals
A key aspect of executing strategy effectively.
How do leaders promote teamwork?
By operating effectively in diverse teams and working across organizational boundaries
Collaboration is crucial for enhancing organizational performance.
What does measuring leadership development typically involve?
Observable and verifiable indicators, such as succession planning and external hires
Easier to measure than leadership competencies.
What is the Bonneville Power Administration (BPA) leadership measurement process?
Measures understanding of mission and ability to produce results
Uses internal surveys and Balanced Scorecard targets to assess leadership effectiveness.
What is the necessary condition before empowering individuals in an organization?
Alignment
Alignment ensures all members understand their roles in supporting the overall strategy.
What are the two sequential steps required for alignment?
- Create awareness
- Establish incentives
These steps facilitate the alignment of individual and organizational objectives.
What are the two sequential steps required for alignment in an organization?
- Create awareness
- Establish incentives
How do leaders create strategic awareness?
Through a multifaceted communications program involving:
* Brochures
* Newsletters
* Town hall meetings
* Orientation and training programs
* Executive talks
* Company intranets
* Bulletin boards
What is the purpose of employee surveys in organizations?
To determine whether employees are aware of and understand the high-level strategic objectives
How is strategic alignment achieved in organizations?
By linking personal objective setting and the compensation/reward system to business unit and corporate objectives
What does First Community Bank (FCB) identify as its primary organization capital objective?
Strategic alignment
What are the four objectives in FCB’s learning and growth perspective?
- Developing human capital
- Developing human capital
- Information capital
- Creating organization capital
What are the three components of FCB’s cascading program?
- Strategic understanding
- Organization alignment
- Personal alignment
What is the primary waste mentioned regarding good ideas in organizations?
A good idea used only once
What is the purpose of knowledge management systems in organizations?
To generate, organize, develop, and distribute knowledge throughout the organization
What does generating knowledge involve?
Identifying content relevant to others and getting people to submit the material to an electronic database
What is necessary for information to be accessible to users?
It must be organized for electronic representation and retrieval
What are the two methods for distributing knowledge in organizations?
- Push system
- Pull system
What is a challenge organizations face regarding knowledge management?
Motivating individuals to document their ideas and knowledge
What does the organization capital readiness report assess?
The ability of an organization to mobilize and sustain the process of change required to execute its strategy
What are the key components measured in the organization capital readiness report?
- Leadership
- Culture
- Alignment
- Teamwork
What does the HR role entail in relation to organization capital?
Establishing targets for measures and initiatives to achieve those targets
What is the significance of the learning and growth perspective in an organization?
It is the foundation of the organization’s strategy and represents intangible assets creating value
What do the measures in the learning and growth perspective represent?
Intangible assets that create value by their alignment to the organization’s strategy
True or False: Companies shy away from measuring intangible assets because they are more subjective than financial measures.
True
What does the Balanced Scorecard movement encourage organizations to do?
Address the measurement challenge of intangible assets
What is a key takeaway regarding measuring capabilities of employees and knowledge systems?
It communicates the importance of these drivers to value creation
Fill in the blank: The Balanced Scorecard can quantify the value created by _______.
intangible assets
What is Ingersoll-Rand (IR)?
A global, diversified manufacturer of industrial and commercial equipment specializing in security and safety, climate control, industrial solutions, and infrastructure.
What year was Ingersoll-Rand founded?
1871
What types of products does Ingersoll-Rand offer?
- Schlage locks and security solutions
- Thermo King transport temperature control equipment
- Hussmann commercial and retail refrigeration equipment
- Bobcat compact equipment
- Club Car golf cars and utility vehicles
- PowerWorks microturbines
- Ingersoll-Rand industrial and construction equipment
What was Ingersoll-Rand’s revenue situation by the mid-1990s?
Nearly two-thirds of IR’s revenues came from outside its traditional business.
Who became the president and CEO of Ingersoll-Rand in October 1999?
Herb Henkel
What vision did Herb Henkel have for Ingersoll-Rand?
To transform IR into a ‘global industrial enterprise.’
What transformation did Henkel aim for Ingersoll-Rand?
From a product-driven holding company to a solutions-driven operating company.
What strategic planning process did Henkel introduce?
A common strategic planning process across the organization.
What tools became key for articulating and communicating strategy at IR?
- Strategy map
- Balanced Scorecard
What is stated at the top of Ingersoll-Rand’s corporate strategy map?
The mission to become ‘a global industrial enterprise with market-leading brands.’
What financial objectives does Ingersoll-Rand aim to achieve?
- Increase shareholder value
- Achieve dramatic growth
- Lower the cost base
What are the three themes of Ingersoll-Rand’s value proposition?
- Provide the best solutions for customers
- Develop true win-win partnerships with customers
- Create long-term customer loyalty through excellence
What are the three primary strategic themes for internal process excellence?
- Drive operational excellence
- Drive demand through customer/end-user intimacy
- Drive dramatic growth through innovation
What does the people expertise theme in IR’s strategy map address?
Cultural priorities, critical people skills and competencies, and enabling infrastructure needs.
What is ‘dual citizenship’ in the context of Ingersoll-Rand?
Bringing together the talents and energy of all IR people across business units and the corporation.
What is IR’s Strategic Management System (SMS)?
An enterprise-wide system that includes integrated management processes.
What are the components of Ingersoll-Rand’s Strategic Management System?
- Strategic planning
- Operations planning and budgeting
- Strategic initiative management
- Quarterly and monthly operating reviews
- Internal and external communications
- Performance management
- Career development planning
- Succession planning
Fill in the blank: Ingersoll-Rand’s strategic management system consists of the strategy map, the ________, and the performance management process.
Balanced Scorecard
True or False: Every business unit at Ingersoll-Rand has a unique strategy map that aligns with others in the organizational hierarchy.
True
