Organizational Audit and Consulting

The order is the foundation of everythingEdward Lorenz
George was reading the report of Measures and Scales Ltd. for already an hour. It was a consulting company, specialized in human capital management.

The Big Stone Ltd. – company George worked for fourth year, engaged the consulting company because the business hasn’t been so good lately. It was not about the lack of clients. Well, in the last few months the flow was not the same, but… there’s still crisis. For three years the company almost doubled its personnel and clients and opened shops in all the bigger towns in the country. Nevertheless something happened: the results were poor and poor, the people – more nervous, they made more efforts to put the blame on someone else and to find excuses… Fluctuation increased; for the first time in the whole its existence, the name of the Big Stone appeared in sites and chats, where ex-employees and clients attack the methods, qualities and image of the company.

Company’s management was noticing all this, but had neither the time, nor the knowledge, nor the instruments to define, analyze and systemize the problems and symptoms. That’s why in the last two weeks the consultants from Measures and Scales Ltd. were invariably present in the offices: they rummaged among papers, chased the employees to fill in inquiries, led long and would-be easy conversations with all the important for the company people, sought the opinion of clients and partners, watched the work and commented their impressions with managers and experts.

George was a senior expert in Retail Department, performing various functions which included also control over all shops. That is why he had the right to receive a part of the report, directly related to his responsibilities:

The main problem is lack of a good communication between the shop and the head office in Sofia. Essential for the work information is being delayed, is inexact or does not reach the employees at all, George read. Shop assistants have no build skills for customer service, acceptance of claims and presentation of goods, the report continued.

‘Yes, that’s right, but you just try to explain to everybody that someone should run the operations of all the shops, and it’s not necessary for everyone to interpret obligations, rules and goals the way he or she wants to.’ Thinking so, George turned the next page to see what the consultants propose as a solution.

Creation of a unified system for training, development, evaluation and control of personnel in the shops of the company. Establishing common for all the employees criteria and rules for work. Creating position Shop Network Manager, responsible for implementation, control and updating of the systems and rules described above.

‘Wow!’ George was surprised. ‘It seems these people guessed. I was expecting all sorts of abstract proposals, such as motivational meetings, nature hikes and other generalities. Well, I think I caught a glimpse of a title Distribution of Tasks and Responsibilities; let’s see what they propose there…

An hour later George was both enthusiastic to change things and a bit confused from the fact he didn’t know where to start from. He picked up the phone and called his boss:
- ‘Hey, Mony. Did you read the report? Would you like to discuss it, for it’s not quite clear for me.’
- ‘OK, George, if you want, we could call some of the consultants, after all, that’s why we pay them – to be at our disposal…’

Audit, Restructuring, Update

All companies pass through different stages in their development and overcome various in nature crisis. Each one of them is a generator of different problems that are not always resolved. This leads to their deepening and to sustained negative impact on the company’s activities.

Gradually, staff and management are beginning to accept them as something normal, something that ‘has always been the same’. Evidence and experience show that exactly this way of thinking and acceptance of the circumstances is one of the reasons for reducing companies’ vitality and competitiveness.

The problems mostly related to unclear allocation and/or doubling of tasks, rights and responsibilities, increase of procedures and documentation, more bureaucracy. Communication between the departments in the company and between managers and staff becomes more formal, the number of mistakes in consequence of misunderstanding increase; excuses for undone tasks and missed targets become main topic. Most of the employees and managers lose the direction of development of both the company and their own career. Gradually the level of motivation and commitment to goals of the company decreases. As a result, the effectiveness and competitiveness of the organization decreases: the resources (financial, material, human, time) increased, and the results stay the same or even fall.

Organizational audit aims to define and analyze specific issues within the company and to show specific ways to overcome them. The main methods for implementing measures to address problems identified during the audit are organizational restructuring, optimization and update. Broadly, the measures are in the direction of the optimization process, analyze and define the rights, duties and responsibilities of the position level and unit level. If necessary, the organizational structure is being updated by creating new positions or departments and /or restructuring of current ones.

Another major part of the restructuring and renovating of companies are related to developing, codifying and implementing policies and systems for human resources management directly related to the set of the organization’s management goals. The different systems regulate and standardize methods for assessing work performance, wages and bonuses, the criteria for recruitment, etc.