Business Hierarchy of Needs® - A Change Management Framework
Jim Gitney
Strategic Planning | Supply Chain | Lean Manufacturing | Six Sigma | VSM | Plant layout | Restructuring | M&A | Interim Executive | Author of "Strategy Realized - The Business Hierarchy of Needs®"
What do you do when you want to see how something is fixed? You go to You Tube and find a video on how to fix it.
Where do you go when you find a person you might want to hire? You go to LinkedIn and Facebook to find out more.
Where do you go when you want to find out the recipe for successfully creating and executing a strategic plan?
You start with the Business Hierarchy of Needs®. It is a change management framework that provides leadership teams with fundamental steps for moving a business from its current state to a defined future state. It is also an important visual reminder of the holistic approach required to effectively manage that journey. Where Maslow's Hierarchy of Needs is focused on the individual, Group50's Business Hierarchy of Needs® is designed for teams and organizations to help them navigate the complexities of Industry 5.0.
Of course, it is never really that simple. It is a guide, and you need recipes for each step in each level.
Level 1 - Data Analysis and Planning
Level 1 is the foundation for successful and sustainable business. It provides the details that stakeholders need to understand the company, its direction, how to get there and how to measure success. But there are a few new things in Level 1 that are important to understand. The company's Most Important Goal, or MIG is one of those. Current thinking in strategic planning books and articles is that a company can have no more than 3-5 primary goals, but even that is too many to focus on. We believe there can be only one MIG that drives the entire company. All other goals and objectives inside the company need to be designed to support the MIG. More on that later. The other new item here, which most teams don't give enough thought to is Value Proposition. It is the company's raison d'être. It defines the reason that customers buy a company’s products and services. Both the MIG and Value Proposition become the litmus test for all data analysis and planning in Level 1.
The Strategic Planning 5.0™ playbook, created by Group50®, provides more insight on the details of each of the steps in Level 1 and highlights the tools required to successfully complete that level. Most organizations turn to strategic planning experts to help them create the project plan for developing each element in Level 1 and provide the required tools and training to complete the requirements of Level 1.
Level 2 - Knowledge and Change Management
Every company has found out that human capital has become a much more precious asset and that they need to work much harder to do more with less. The approach to Industry 5.0 is a focus on optimizing a business at the intersection of people, process, technology and cobotics. Level 2 is critical to achieving the future state defined in level 1. It requires a full understanding of the current organizational gaps and the different sets of skills needed in the future state organization.
Improperly considering the requirements of Level 2 have led to the following results:
- 95% of a company’s employees are unaware of, or do not understand its strategy
- 90% of companies do a poor job executing their strategy
People are responsible for the implementation of a company's strategic plan. They design the business processes, implement the technologies, and do the continuous improvement activities. Group50’s Organizational Development 5.0™ program is fully focused on the appropriate organization structure, training, cascaded goals and objectives, accountability and compensation programs, stakeholders (employees, contractors, temps, 3rd party providers, teams and others who impact the success of a company), need to transition the company from the current state to its defined future state. A very important element to consider in this level is the approach to implementation: how it will be communicated, monitored and managed.
Level 3: implementation
The business future is fully defined, and the knowledge and change management programs are in place. Now comes the easy part… implementation. Optimizing a business at intersection of people, process, technology and cobotics requires a well-defined implementation roadmap that is actively managed, monitored and measured. This process is a transformation that can reap huge benefits as shown in this digital transformation case study.
The definition of the future state only tells the organization what the company will look like and perform in the future: perhaps five to ten years from now. The MIG will tell the organization how to measure success over time. This is a transformational journey over a multi-year horizon that requires a program management structure focused on the following:
2. Digital technology strategy
Over time, as technologies change and business processes are redesigned, there will be a need for circling back to Level 2, reevaluating the organizational needs of the business, and continuing with the implementation. In Level 3, measurement and communication is critically important so the everyone understand the progress that is being made on achieving the company’s MIG based on the KPI’s (Key performance Indicators) that were established and cascaded down through the organization.
Conclusion
No one ever said that running a business was easy. Every client we work with has just enough people to run day to day operations. It takes work and effort as well as a commitment to carve out time to “Work on the Business” and to make the financial commitments required to plan, manage, and stay focused on the journey to a future state. The Business Hierarchy of Needs® is a change management framework designed provide leadership teams with a guide for aligning every stakeholder to a company’s strategic plan and the path toward its implementation. You will know that you have been successful when you can walk anywhere in the company, ask any employee about the company's strategic plan and they can tell you what their roll is in achieving the MIG
Call me, at (909)-949-9083, drop me a line at info@group50.com or request more information here.
About the Author: Jim Gitney, CEO and Founder, started Group50® Consulting in 2004 with the focus of working with companies to significantly improve their performance by leveraging people, process and technology as part of a company’s strategic plan. In 2013, he created Group50’s Business Hierarchy of Needs® change management framework, a fundamental operating guide to senior leadership teams, and was granted a trademark in 2015. He has held C-suite and Board positions in large and small manufacturing companies. He was a member of GE’s Quality Council, part of the team that developed and implemented Black & Decker’s global Total Quality Management (TQM) program, has led or participated in over 125 Kaizen events and is considered a subject matter expert in Continuous Improvement. Group50® consists of consultants from every functional discipline who have spent their careers in corporate America developing strategic plans and rolling up their shirt sleeves to get it done.
Chief Operating Officer at Vital Data Technology, LLC
2yJim Gitney, very well said. It is critically important that any company follows these important steps. First get aligned on the right priorities, some do this right but fail on the 2nd and 3rd steps. Change Management, especially in small companies can be very difficult to manage and it is essential everyone knows where we are going. This is where most companies and executives fail the most, communication of the strategy and goals. and how they are going to get there. It was once said to me by Vince Florenza, former CEO of BD, if you think you have communicated enough try 100 more times and you might be getting close. I didn't realize how right he was until many years later. Great article.
Founder and Managing Partner - Pitcairn Partners LLC
2yHi Jim! Formidable article that brings a very comprehensive perspective on Change Management. Here is a couple of aspects I submit for consideration. A) Organizational Agility Supporting the Bus. Strategy – Focus Teams Approach. Research shows high-performance companies are not organized into functional hierarchies. They are formed by networks of multidisciplinary teams, with different functional expertise, coming from different levels and parts of the organization. They examine their MIG through 5 different perspectives. 1 Sustain what is performing well, 2 Position for the future, 3 Short term fixes, 4 Continuous improvement, 5 Efficiency and effectiveness. B) Accountability & Ownership Mindset It is a foundation of the Focus Teams Approach. Multifunctional Teams can only be successful as they develop a sense of ownership and become accountable towards the “mission ahead” Let me know if you'd like to talk more about this Best, Claudio
Business Consultant, Part-time Faculty in College of Business at LMU
2yThis is a great reminder that taking your business to the next step is the result of a well thought out process. Putting together and executing a successful strategy takes work. Excellent article.
Fractional CFO at NutraBio Labs
2yGreat article; I love the Hierarchy of Needs framework. As a university adjunct professor, I taught that managers were responsible for four basic functions: Planning, Organizing, Directing, and Controlling. You have nailed all four with significantly more meat on the bone and made them actionable. Well done. As a fractional CFO, I work with my clients to achieve financial success by utilizing the concepts you layout in the order in which your Hierarchy presents them. All in all, a very useful tool.
Board Member and President at Three Angels Haiti, New Business Teams Mentor at UC Riverside, Commissioned Lay Pastor at Glenkirk Church.
2yTerrific article, Jim! In my work at UC Riverside, I see so many would-be entrepreneurs who feel that passion and "having a great idea" are sufficient for business success. The Business Hierarchy of Needs reinforces and guides how to engage and deploy a business' "active ingredients"--people, systems, information and processes--to drive success. As you know and emphasize, people need to know the business' greater purpose and direction as well as what "success" looks like and how it's measured. Passion and great ideas are necessary for business success, but not sufficient. Group50's Hierarchy tool and accompanying processes wonderfully guide and equip leaders to set a successful course, execute well and outcompete others. Thank you for sharing this yet again!