Recently I had lunch with Frank the President of a $100 million company. We have known each other since our University undergrad days and that is quite a few years! Over a sushi lunch, Frank was bemoaning his company’s poor sales. Sales were down by over 20% in one year and his owners are pushing him to get sales back up.
Frank, who has run larger companies in the past, said he did require better people and that his organization was off kilter but that with his industry being down by 20% there was no need to make changes and realign his organization because the new people would not be able to find additional sales. Furthermore, Frank said he wanted to avoid paying severance to some long service employees who were no longer effective in meeting the new economic challenges.
My answer was that he was wrong to think that he cannot increase his sales. Frank, unlike Ron Wilson the beleaguered Coach of the Maple Leafs, Video: has some options that can get him back to growing his company and get his owners off his case. These options are relatively inexpensive, represent a onetime cost and have tremendous ROI impact. The solution is the power of having the right organization design and alignment and the right people to drive growth back into the company.
There are many cases of companies growing their sales or achieving productivity increase of 20% to 40% per annum even during recessionary times. To achieve these double digits results you may want to review concepts invented by the late Dr. Elliott Jaques. Elliott was a world renowned genius and was born in Toronto. Jaques, who was a Harvard PhD and a medical doctor/psychiatrist, invented over a span of 50 years of research and writing hundreds of papers and books a system called requisite organization. This system still remains the only integrated system in the world that ties the strategy of a company to the required organization structure and the cognitive ability of the people. Once this system is implemented it enables a company to flower by 20% to 40% growth and productivity.
If you want to find out more about requisite organization please listen to this short video of CEOs who describe how they used requisite organization to grow and streamline their companies. Some of the people in the video run the largest organizations in the world, such as Rio Tinto, Commonwealth Aluminum, Anglo Gold and the Pentagon. We have also found that this system also works for small to medium sized companies and, in fact, these companies can grow more quickly than a global company.
These cases will show you how these companies were able to grow by 30% using the requisite organization management system. The above cases are also chapters in a book “Organizational Design, Levels of Work & Human Capability.” This book is used in many MBA schools to teach organizational design.
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