Cathedral thinking has its roots lying in middle ages when everyone involved in construction work, even a labor carrying stones, of the cathedral knew that he was working for the noble cause of building the cathedral. [1] This concept, when applied in business environment implies that every individual in the organization is working for a shared goal or a common cause. We take a case of big IT firm who has most of its customers located in foreign countries. Cathedral thinking would say that whether it is house keeping personnel, or security personnel or head of that business unit/center, everyone has same reason for working there and doing his job. Suppose vision of the organization is to become globally respected company which provides best possible solutions. Then starting from the Business Unit head to security personnel who is standing at main gate of a large office complex will know that he is working there for making the organization globally respected that offers best solutions. Is it happening, even in a most employee caring organization? I feel, answer is No. Why I feel that is the subject matter of this article and I would try to find out ways to change my answer from No to Yes.
Instead of seeing the business organization as a legal entity, if we see it as a group of people or a community which is formed for serving a well defined purpose or to achieve a well defined goal, then cathedral thinking concept can seem to have a meaning in organizational context. The legal entity concept says that the organization is not same as its founders or its other stake holders. Whether its founders or any other member survives or not this entity would survive. If it has a different identity altogether, then its purpose of existence will also be different from its stakeholders. When this legal entity is formed, its purpose of coming into existence and being in existence are borrowed from its founding members’ purpose. As the organization matures, more and more people come on board and go away, but the organization continue to exist with same goals. Senior management may work for the organization because of match in their personal value system and organizational value system. But, I do not think bottom of the organizational pyramid works because of the organizations’ value system or its MVO. In my opinion, by and large, people join an organization because of earning potential , career growth prospect, and nature of work, not in order of priority. My opinion get supported by the fact that now, if one works for 5 years continuously in one organization then he becomes an exception. Had people been working in an organization because of match in their personal MVO and Organization’s MVO, it would not have been possible for them to switch jobs so frequently. Since vision statements are something which the organizations chase to achieve in long run, how someone who is working for that can leave before the vision is realised.
So, at this stage I can say that cathedral thinking does not exist in practice. Now I come to the question that why is it so? Is it because this is impossible to realize or because the way we operate our businesses it becomes impossible. Whatever be preached by the leaders of the organization, it’s very difficult for me to believe that a business organization has primary goal anything other than economic profit. If it is true then it’s all MVOs will be drafted in order to meet its primary goal first. How every employee, those who are not part of profit sharing plan or ESOP, can have same goal as the organization has? Everyone joins organization for his own personal goals and aspirations, which can rarely be same as that of organization. So what organization does is- it tries to align its personnel's goals with its own goals. But it’s not easy. The tactics that organizations adopt is to design the jobs and performance parameters in such a way that even if they achieve their personal goals and objectives, it helps the company to move a step towards its goals. This is what termed as goal alignment, that is to link everyone’s personal goals with that of organization's with no phase difference. Unfortunately essence remains the same. The employee is still working for his own personal goal, although unknowingly he is working towards the organization’s goal. So if we ask him that what for he is working there, he is least likely to say that he is working for the same purpose or cause for which this organization is existing.
If an organization can achieve cathedral thinking then many problems, that are typically faced by HR Department, will disappear. The problems which are likely to disappear are employee engagement, attrition, motivation, productivity etc. All this will result into greater increase in effectiveness and capability of the organization. In knowledge economy, biggest asset that businesses possess are its employees. So definitely there are benefits associated with cathedral thinking. Now the biggest question is how to realise that? Had the answer to this question been known to me, I would have become a very senior executive of some big firm. But, I am a second year management student writing this blog for passing in a course. Still with my limited knowledge and understanding I gave it a thought. If the company have its MVO statements and Actual Goals derived from common goals and aspirations of its members or so to say all its stakeholders, then there is a greater chance of realizing cathedral thinking. I feel that top down approach for goal alignment should be replaced by bottom up approach. I know, that it is only theoretically possible, but there can be a combination of top-down and bottom-up approach which will work. Communication is a key element here.
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Reference:
1. http://www.wisegeek.com/what-is-cathedral-thinking.htm
Sunday, September 7, 2008
Information System for Corporate Planning
Corporate planning is gaining more and more importance in recent time. One of the reasons is fast changing business dynamics due to the much cherished phenomenon called Globalization. This phenomenon has brought about tremendous opportunities but has also put frightful pressure on businesses. Integration of world market, emergence of new technologies and deregulation, all demand very high degree of flexibility and foresightedness. The fast changing business landscape mandates the organization to run the exercise of future planning continuously. Organizations which foresee the future earlier than others get a competitive advantage. But, the process of foreseeing future and planning for all possible scenarios or contingencies is not an easy task. Coming up with strategies for all possible contingencies is another challenge. The corporate planning exercise needs a team of expert as well as high degree of involvement from all levels of management. Since level of expertise varies from organization to organization, all the organizations do not possess equal capability or preparedness for future contingencies. Here lies the opportunity for designing a system which captures the modeling logic of experts and make the corporate planning exercise possible for organizations with somewhat less expertise
Technological innovations in computer and information technologies have brought in significant improvement in business processes. Information system of previous generation had failed to provide much support to senior management in making strategic decision. But, now we have information systems that not just facilitates operational decision making but also captures expert’s logic for strategic decision making and carrying out complex exercises such as corporate planning. The idea of computer based strategic modeling tools in not new. A lot of literature is available from 1980 onwards which had proposed systems having such capabilities. In literature, I have found that primary requirement for such a system is to have knowledge of things that goes on in the minds of the expert strategic planners. Another important requirement from the system would be to integrate the decision making logic of all the organizational units/functional divisions (S&M, CF, Ops, HR) to arrive at the decision model for the organization as a whole [3][1]. This will provide support in decision making or evaluating alternative strategies, but corporate planning system has to go beyond a DSS system [2]. It has to first help the management in foreseeing the future and then developing alternative strategies. The decision support functionality will be used for evaluating the alternatives. The business logic of the firm will be at the core of this model. It will include MVO of the organization to generate the model that aligns with the corporate goals. Since the business environment keeps on changing, the planning system should keep gathering data relevant for planning and should update and adapt the model accordingly.[3] All the new information that is gathered by the system should be used for updating the forecast and revising the alternative strategies.
Such a strategic planning system will have an information gathering framework which will start with gathering key success factors from operating managers from various functional departments.[5] All the functional departments have different goals which need to be gathered and aligned with corporate goals. It will collect information about key success parameters from middle and top management. It gathers all the information from managements at all levels as well as external systems that are required for developing a planning model. The system should be highly interactive. In every phases of exercise it should generate results and validate it with management [4]. The feedback mechanism should be there for improvement of the model. This IT based system will help the management in developing planning model and coming up with strategies. In addition to that it will also help in saving a lot of valuable management time that goes in communication.
References
1. Dinkel, J. J. & Fuerst, W. L.(1986), Corporate Planning and Optimization Models: Integrative Aspects and Microcomputers, Infor, vol: 24-2, May 1986
2. Ackoff, R L.(1981), On the Use of Models in Corporate Planning, Strategic Management Journal, Vol. 2, pp-353-359
3. Takai, E. & Yamada, Y. (1995), An Information handling method for Corporate Planning Decision Support, International Transaction in Operational Research, Vol. 2-2.
4. Kluyver, C.A. & McNally, G.M.(1980), Corporate Planning Using Simulation , Interfaces, Vol: 10-03.
5. Mockler, R. J., Computer Information Systems and Strategic Planning, Publication Source Unknown (Taken from EBSCO)
Technological innovations in computer and information technologies have brought in significant improvement in business processes. Information system of previous generation had failed to provide much support to senior management in making strategic decision. But, now we have information systems that not just facilitates operational decision making but also captures expert’s logic for strategic decision making and carrying out complex exercises such as corporate planning. The idea of computer based strategic modeling tools in not new. A lot of literature is available from 1980 onwards which had proposed systems having such capabilities. In literature, I have found that primary requirement for such a system is to have knowledge of things that goes on in the minds of the expert strategic planners. Another important requirement from the system would be to integrate the decision making logic of all the organizational units/functional divisions (S&M, CF, Ops, HR) to arrive at the decision model for the organization as a whole [3][1]. This will provide support in decision making or evaluating alternative strategies, but corporate planning system has to go beyond a DSS system [2]. It has to first help the management in foreseeing the future and then developing alternative strategies. The decision support functionality will be used for evaluating the alternatives. The business logic of the firm will be at the core of this model. It will include MVO of the organization to generate the model that aligns with the corporate goals. Since the business environment keeps on changing, the planning system should keep gathering data relevant for planning and should update and adapt the model accordingly.[3] All the new information that is gathered by the system should be used for updating the forecast and revising the alternative strategies.
Such a strategic planning system will have an information gathering framework which will start with gathering key success factors from operating managers from various functional departments.[5] All the functional departments have different goals which need to be gathered and aligned with corporate goals. It will collect information about key success parameters from middle and top management. It gathers all the information from managements at all levels as well as external systems that are required for developing a planning model. The system should be highly interactive. In every phases of exercise it should generate results and validate it with management [4]. The feedback mechanism should be there for improvement of the model. This IT based system will help the management in developing planning model and coming up with strategies. In addition to that it will also help in saving a lot of valuable management time that goes in communication.
References
1. Dinkel, J. J. & Fuerst, W. L.(1986), Corporate Planning and Optimization Models: Integrative Aspects and Microcomputers, Infor, vol: 24-2, May 1986
2. Ackoff, R L.(1981), On the Use of Models in Corporate Planning, Strategic Management Journal, Vol. 2, pp-353-359
3. Takai, E. & Yamada, Y. (1995), An Information handling method for Corporate Planning Decision Support, International Transaction in Operational Research, Vol. 2-2.
4. Kluyver, C.A. & McNally, G.M.(1980), Corporate Planning Using Simulation , Interfaces, Vol: 10-03.
5. Mockler, R. J., Computer Information Systems and Strategic Planning, Publication Source Unknown (Taken from EBSCO)
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