Thirty one percent of companies in India are considering a different organisational structure. This is part of the key findings of a joint study by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company and Confederation of Indian Industry (CII). The top five drivers for considering this change include creating a performance-driven culture (49%), meeting changing customer demands (41%), supporting change in strategy (36%), changing the behavior and mindset of the workforce (34%) and cutting costs (30%).
Polling more than 100 organisations, with almost half at CXO levels, the study, titled “Willis Towers Watson – CII Study on Organisation Structures in India”, analyses if and how current organisational structures in India are aligned to growth-enabling business strategies. It also examines a range of indicators of any impending challenge that could arise due to ineffective and misaligned structures.
Commenting on the study findings, Mr. T V Narendran, CEO & Managing Director, Tata Steel Limited, who is also the Chairman, CII National Committee on Leadership and HR, said “Today, India is counted amongst the countries that will drive the global economy. Given the rapidly changing work and workforce related dynamics, it is reassuring to note that as many as one in three companies in India are reevaluating the compatibility between their growth strategy and current organisation structure. This is a progressive step that would enable companies to drive growth, mitigate risks and institute strong governance structures”.
Many factors, both direct and indirect, lead organisations to change their business model and growth strategy. The study found that 61% of the organisations are considering expanding their products / services portfolio; 42% are considering geographic expansion; while, 13% are considering merging with or acquiring another company.
Stating the top challenges resulting from an unsuitable organisation structure, respondents identified a lack of adequate functional experts, greater focus on meeting functional goals instead of customers/organisation wide goals, being middle management heavy and lack of innovation.
Mr. Sambhav Rakyan, Head of Talent and Rewards, Willis Towers Watson India, said “Organisations today face significant challenges understanding the implications and risks associated with the future of work. Today’s most in-demand occupations or specialties did not exist 10 years ago and so it’s simply not realistic for organisations to continue with traditional organisation structures. The future of work is driving companies to redesign their organisation structures to be nimble and flexible to cater to the speed of change. This is the right time for organisations to undertake a structure re-design exercise along with strategic workforce planning and key responsibility area (KRA) setting”.
Mr. Chandrajit Banerjee, Director General, CII said “The study findings are significant, especially at a time when Indian companies are not only expanding their global footprint but catering to a new and ever expanding domestic consumer base and all of this in a rapidly changing business environment. It seems evident that organisations need to get the basics, like their organisational structure, right, to ensure they are well placed to cater to a changing business strategy”.
The study also revealed that organisations are making or plan to make efforts to fix organisational structure-related challenges over the next three years. For example, 73% are paying more for certain skills, 60% are deploying work to other locations and 57% are focusing on workplace flexibility.
Further, 28% respondents felt they had excess manpower in revenue generating roles, while 40% said they had excess manpower in support roles.
“Temporary fixes will eventually lead to challenges like overstaffing, diluted accountability, role confusion, slow decision making, weak customer focus and increased costs. Organisations are best advised to take a step back and approach this as a strategic exercise with significant long term implications”, added Mr. Rakyan.
About Willis Towers Watson ?
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.
About Confederation of Indian Industry (CII)
The Confederation of Indian Industry (CII) is a non-government, not-for-profit, industry-led and industry-managed organization, working to create and sustain an environment conducive to the development of India. . Founded in 1895, India's premier business association has over 8,500 members, from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 200,000 enterprises from around 265 national and regional sectoral industry bodies. Serving as a reference point for Indian industry and the international business community, CII has 67 offices, including 9 Centres of Excellence, in India, and 11 overseas offices as well as institutional partnerships with 355 counterpart organizations in 126 countries. CII Charts change by working closely with the Government on policy issues, interfacing with thought leaders, and enhancing efficiency, competitiveness and business opportunities for industry, to reorient, restructure and respond with the varied demands of such tumultuous times.
10 March 2018