22 May 2007

Sarkozy’s goal-driven government structure

Nicolas Sarkozy, the newly elected French President, is completely rearranging the Cabinet as it has never been done before. He is grouping departments together under the same boss (minister) that never worked together. He is also breaking up departments for the first time. The central principle is a very clever one: The Cabinet’s departments are formed on the basis of their main goal and purpose, no longer on the basis of their functional relationships. For example, the goal of transforming France into a “Green” country requires departments such as “Environment” and “Energy” to be joined together (the “Energy” would have usually been managed by the Economy and Finance” dept). Another example is to remove the management of visas from the Interior department, and associate it with the dept responsible for “Integration” and “National Identity” to form a new dept for Immigration. The goal here is clearly to have a more holistic approach to the issues related to immigration.

Whether or not we agree on these political goals is not my interest here. I am however intrigued by the implications of these drastic departmental changes for the civil servants affected. The media have already reported a lot of mostly worried comments from some managers, and the point in common I could identify was anticipated problems due to cultural differences! Here we go again with the importance of Organizational Culture but this time in the Public sector. Another significant impact due to some redundancy in activities will be a reduction in the workforce.

The most telling case is the one affecting the separation of the “Labor” dept from the “Economy & Finance”, and its association with the “Social Relations” dept. In the Labor dept, you typically find the ones who came out of the French civil servants schools with the top marks. They are usually very good in math, very rigorous and methodical. In the Social Relations dept, it could hardly be more the opposite! They usually graduated with the lowest marks, have more “artistic” mindsets (rather than scientific) and have better communication skills. Both sides clearly have no idea how they are going to work together! Nicolas Sarkozy’s idea here is to give them a common goal of improving labor issues, with the realisation that it will require a combination of economic and social changes. For example, one of the objectives announced is to level the salaries between men and women within two years (today in France, men can be paid up to 40% more than women for the same job)!

It will be very interesting to see how all these departments learn how to work together. These collaborations will need to be rapidly effective and efficient for the new Government to meet its objectives and convince the French people that it is on the right track. I wonder if someone will think of calling on the services of Knowledge Management consultants.

I now come to the point I really wanted to make here: does this goal-based organizational approach make sense for a private company?

We could start with an example: consider the strategic goal to “set a rate of annual increase of say +20% for retail customer loyalty”. For simplification, that is the number of existing customers purchasing at least once each year (I am assuming a luxury goods industry here). Typically, such an objective would be given to the Retail department. Some other departments such as Marketing might also be made aware of it and asked to assist. Now, what would it mean to adopt Sarkozy’s approach? You would need to think out of the box and regroup together under the same leader various departments or teams (parts of departments). I can suggest the following list for this example (but this exercise is very context-dependant, so each situation can demand a different organization) :

  • The Retail department
  • The part of the Customer Service department (After-sales services) specifically dealing with Retail customers (as opposed to wholesale).
  • The part of the marketing department focusing on the retail market.
  • The Public Relations department.
  • The Press department.

Possibly, you could even include individuals or teams from some of the shared services departments that usually devote most of their time for Retail matters. I can think possibly of:

  • Information Systems (IS) support professionals. For example, the team supporting the CRM application, a key tool for such a customer-focused objective.

For the shared services, the question to ask is: “will the individuals or teams concerned add more value by being integrated into this new “Super Retail dept” or by remaining closely linked with all the other teams within their respective department?” You should really consider this from a Knowledge sharing point of view. For an IS support Analyst to report to the Retail Director would undoubtedly facilitate his/her understanding of the business needs and deliver tailored support. However, from this point on, he/she ceases to be a shared resource and the cooperation with the rest of the IS department is then seen as secondary. In other words, this makes sense if the workload generated by the Retail department’s IS requests justify this IS Analyst to be full-time focusing on them.

So then, supposing a Company implements this goal-driven organization, isn’t there a risk to have to re-organize too often when the strategy changes? Yes, but I don’t see this as a risk if this process of reorganization becomes engrained in the Company’s culture. The whole Organization must be built on principles of flexibility: flexible structure, flexible processes, flexible roles. This implies in turn a knowledge-sharing culture. Employees need to be used to share knowledge across departmental boundaries. In fact, there should be no internal boundaries when it comes to knowledge sharing (except for what needs to remain confidential). Such flexibility of course wouldn't typically suit more an Organization operating in a fast-moving/fast-changing market, but it could be argued that all markets are changing increasingly faster in this flatter World.

Peter-Anthony Glick


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