1 Metodologi Pertemuan 9 s.d 10 Matakuliah: A0134/Audit Operasional Tahun: 2006.

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MetodologiPertemuan 9 s.d 10

Matakuliah : A0134/Audit Operasional

Tahun : 2006

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Six Fundamental Steps

• The Management Audit methodology can be applied to any internal fact gathering process. It is based upon an interactive diagnostic process that enables both hard quantifiable issues and soft qualitative issues to be identified.

• Psychological or psychometric evaluations can be used as an additional assessment tool. In most instances, whilst their contributions and value are recognised, they are usually commissioned directly by the company and used to aid internal assessment. Management Audit assessments are different.

• The Management Audit methodology takes the viewpoint of a Chief Executive Officer. He has to make critical decisions relating to resource allocation, organisational structure and strategic market focus. The Human Resource department will provide invaluable internal information to confirm or challenge some of the transitional organisation recommendations that are made during the Audit diagnosis.

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• Management Audit consists of six fundamental steps:– Step one: Problem definition and strategy briefing– Step two: Documentation of current organisation and

determination f required skill profiles– Step three: Multiple individual interviews of executives– Step four: ICCJ Global Profile ® - systematic

individual, team and internal system evaluation– Step five: Presentation of findings and suggested

implementations– Step six: Feedback and follow up

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Step One

• The company’s goals and competitive business position must be thoroughly understood by the outside consultants at the outset of the exercise.

• Fig. 5. 1 p. 69 summarises the strategic market position of a company and the possible implementation approaches it can follow in order to meet its challenges.

• The strategy of a diversified roup should aim at maximising the Group’s long-term growth potential. Successful implementation of such a strategy requires as recognition of which competitive position each company within a group occupies.

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• The specific elements within this first step are:– A strategic briefing. In a strategic briefing, the degree of realism

must be assessed. Strategy should be linked with the internal resources of the company, to estimate what is available. In may cases, internal executive talent is not even taken into consideration.

– Outside input on industry dynamics. The danger in strategic formulation is to conduct such a process in a vacuum.

– An agreement by both the client company and the consultants on the strategic options to form the basis for the brief. The consultants carrying out a Management Audit do not ‘look behind’ the decision of the client company upon that company’s strategy. They do not second guess the management; they assume the client strategy to be well founded.

– Determination of the scope of the project. How many individual executives in which division or divisions are to be involved in the Management Audit? It is extremely important for the company to identify the key areas which need to be addressed.

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– Preparation of an internal communication regarding the Management Audit assignment. This is a crucial element. The company management must make clear to those participating in the organisational review both the reason for, and the purpose of, the exercise.

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• The individuals responsible for the project should consider conducting external validity checks with industry experts. This positions the average and top performances of the industry as a whole. The company and the individuals being interviewed can then be appropriately assessed against their peers.

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Step Two

• The next step is for the external consultants to document the existing organisation of the client they also establish the skill profiles required to implement the client’s strategy. The documentation is based on the key parameters which the client’s top management perceive as essential for future business strategy. Hence it is necessary at this stage for the consultancy to establish an understanding of the present organisation and the current degrees of freedom within which the executives operate.

• This degrees of freedom model indicated in Fig. 5. 2 p. 73 evaluates the company’s internal decision-making process within divisions, departments and operation units. It helps to identify the all too familiar bottlenecks.

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• Taking the traditional industrial company, with departments ranging from Research and Development to after-sales service, it determines how each individual units is influenced by upstream and downstream decisions and behavioral patterns. The review process should also identify:– The current and future fundamental

challenges for each department– The skill requirements that are necessary to

face up successfully to those challenges

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• Step two enables a company to allocate resources and tailor the organisational structure to meet its true strategic challenge – manufacturing, marketing or otherwise.

• Fig. 5.3 p. 74 shows the ‘roller’ through which the existing individuals, team and organisation of the client company are processed.

• Fig. 5. 4 p. 76 shows how an individual’s key skills are projected from that individual’s current strengths and development needs through the dynamic challenges facing the position occupied.

• Start-up companies or very fast growing businesses usually have a very active founder as their Chief Executive Officer. They run the risk of not having adapted their management to the reality of their newly created or enlarged business activities. A parallel can be drawn between the traditional product life cycle and the evolutionary process of an enterpreneurial organisation (see Fig. 5.5 p. 76)

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Step Three

• A sequence of individual in-depth discussions are undertaken concerning each position’s specific contribution to future strategic and operational effectiveness.

• These interviews communicate assumptions of an manager’s individual strengths and development needs. They also demonstrate the manager’s ability to meet current and future business challenges.

• The fact finding process should be fundamentally similar to the existing fact gathering and decision-making processes which a Chief Executive Officer uses to make his normal day-to day business decisions.

• The preparatory works calls on four sources of information about each executive, as indicated in Fig. 5. 6 p. 78

• Fig. 5. 7 p. 80 shows the complex interdependence between variables affecting the company’s strategic positioning.

• Like a military artificer, th Chief Executive Officer must know the specific explosion that can have the maximum affect with the minimum charge if strategically positioned.

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• Executive evaluation uses the manager’s track record as a guarantee, or at the very least a strong indicator, of future success.

• Fig. 5. 8. p. 82 shows the outline of a tailored interview guide.• Different cultures also tend to give different emphasis to the

decision making process and implementation timing. The Japanese will spend about 75 per cent of time in the decision making process and 25 per cent in its implementation; Europeans will spend the time 50 – 50, while in the United Stated decision making is much shorter but implementation takes much longer.

• Any evaluation has to be factual. Too much emphasis should not be placed on trying to single out an individual contribution, as a manager’s ultimate objective surely needs to be to offset his own management team’s weakness, not put his own skills and talent forward. With a highly autocratic management style, the team talent composition may well be centred around the manager’s. It will then support his individual drive rather than build a long-term platform.

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Step Four

• Management development has traditionally focused on independent development.

• Most companies look at succession planning as a process linked to new individual assignments, on an individual vertical line. A manager is promoted and, ideally, they simply pull another one up to his former post.

• A manager with X management style, defined as direct verbal directive, will tend to create an unbalanced information flow with his subordinates primarily through a strong hierarchical organisational structure. This will go hand in hand with single point responsibility and profit and loss approaches. Staff will have little role to play as they will be perceived as adding cost and little contribution.

• In a Y management style, defined as being less directive and more participative, with a relatively more collegiate decision-making process, a more even talent distribution in the management team should occur, with more collective performance evaluation criteria.

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• Initiative

• Competence

• Compatibility

• Judgement

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Step Five

• The consulting team candidly discuss their evaluations and conclusions with the client. The individual finding are cross-checked with the client’s previous experience and past evaluation reord, and are documented for individual feedback along with the recommended development programmes.

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• This step can be summarised as one which:– Brings forth organisational issues arising from internal

Human Resource availability– Gives rise to specific action recommendations

regarding organisation development, recruiting and individual career management

– Effects co-ordination with the Human Resouces department for systematic follow-up

– Agrees with senior management the extent of individual feedback by the consultants to each of the interviewed executives

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Step Six

• A professional Management Audit must stand the test of disclosure to the individuals involved. Participating managers benefit directly from the interaction and feedback with the consultants.

• A Management Audit provides comprehensive results. It offers sufficient details to assist senior management in making faster and more competent decisions concerning staffing and organisation.

• The consulting team is also involved in the necessary follow-up to ensure a smooth implementation of the decisions reached by the client senior management.