5CAN examples – multinational organisation

If you have not yet tried our quick scan based on the 5 capability model, give it a try. The tool is free and intended to allow users to get a feeling of using the 5C model.

The 5 capabiltiy model was developed by ECDPM and provides a specific way of looking at organisational performance. It is a conceptual model. To use it in practice one will have to translate the model into a tool for assessment, monitoring or evaluation as many Dutch MFSII organisation have done. These tools are usually not openly available, but since we believe the model provides useful insights and can be helpful to reflect on improving organisational capacity Double Loop has put our 5CAN tool online for you to experiment.

In our blogs we will show some examples and practical experiences of looking at organisations using the 5CAN tool. In this blog we look at a multinational corporation. Of course, there is a large variety in multinational corporations and many management books have been written about all their different aspects. We have chosen one example with the intention to show what information the 5C model could provide.

A multinational corporation

Our example organisation is operating in many different countries and has numerous employees working in different departments. It needs a clear hierarchical structure and well working formal systems and procedures, but there is little attention for informal human relationship building. Many employees have been with the corporation for a long time and are well immerged in office politics, which over time has created a strong company culture that is not easy to change. Leadership is determining the course of the organisation and is looked up to, but changes take time to take effect. The organisation is a powerful negotiator with an extensive network of relationships that are functional to their positioning and market performance.

multinational4Using the 5C model for a large organisation is an interesting challenge. Such an organisation consists of many smaller units, and one could also choose to apply the scan to one department, particularly because the level of motivation and loyalty of the staff will often depend to the unit they are working for. We should keep in mind that the 5C model is based on studying successful international organisations in the non-profit sector. Yet, the basic capacities for organisational performance apply and some interesting features become visible.

5CAN results

The results of the 5CAN of the multinational company generate the following graph. The organisation scores high on two capabilities that are directly related to business performance, but has weaker scores on the somewhat softer capabilities, like learning, motivation and achieving coherence.

radar multinational

The multinational corporation scores highest on the capability to relate and attract resources (score = 3,8). It invests in maintaining its credibility and legitimacy, and would not have existed anymore if it didn’t. Relationships that are formed with the other persons and organisations are functional and based upon rational business considerations. There is little room for nurturing human relationships. The multinational is a powerful negotiator and will use their influence to defend their interests.

Also the capability to deliver on organisational objectives (score = 3.6) scores high as the multinational corporation knows exactly how to deliver its products in order to maximise profits. High level of specialised expertise and skills are available or hired. Strong systems and structures to deliver are in place and re-developed continuously to assure that the company will function properly. As a result the financial, administrative and managerial control mechanisms are strict and can become inflexible.

The multinational corporation is not very flexible to make fast changes, as the systems are large and static. Therefore, the capability to adapt and self-renew (score = 2,5) scores lowest. Internal discussions, dialogue and reflection take place at departmental level, but new insights take time to reach the global level. Leadership has a strong responsibility in renewal taking place and their attitude to change will determine how fast or slow change within the corporation will take place. A challenge is to keep adjusting the companies’ goals to changing circumstances and emerging scenarios and to align policies accordingly.

The capability to commit and engage (score = 3,0) scores fairly average, which indicates that the corporation is aware of its niche and able to get committed employees. However, the diversification and bureaucracy may lead to less affinity with the overall identity of the organisation. There is a no-nonsense culture: decisions are taken hierarchically, fast and they are acted upon. Staff is managed pro-actively and is motivated to work hard for the company and, importantly, for their own career. Commitment is strongly related to opportunities for financial gain and to a lesser extend originates from a belief in their brand.

The multinational is not very flexible to incorporate diversity and the capability to balance diversity and achieve coherence (score = 2.8) is not very strong. There is a risk of over-specialised task divisions that get in the way of effective internal collaboration. It is challenging to combine functional differentiation with human commitment. Still, there is consistency between ambition, vision, strategy, nature and number of activities, and all of the organisation’s activities are target-oriented and efficient.

The total score for each capability in the 5CAN is calculated from a number of indicators. When looking in more detail we find that two following indicators score low: (1) Learning systems and (2) conflict resolution. Further, we can see from the results that the answers from the different respondents show different opinions on the following indicators: (1) perception of organisational purpose and (2) organisational responsibility.

dilbert-on-project-management

 

The low scores on these indicators provide a number of suggestions for further reflection. Points for discussion are for instance: how management can encourage and reward reflection about organisational practice, and how staff members communicate with each other when there are differences or conflicts of interest. Further thought can be give to how stakeholders could give the organisation feedback on its social responsibilities.

Next steps for the multinational corporation

It is important to note that not all capabilities have to be equal. However, all five capabilities need to be present for a strong, resilient and sustainable organisation. Also the capabilities are related and strengthening one capability might require attention to another as well. The company will have to prioritise where it feels that most is to be gained.

In this example, the multinational organisation runs a risk of reacting late to new trends and changes in context. If renewal depends only on market intelligence and development of new products and is not balanced with what drives people within the organisation, then internal tensions will increase and innovation will be slowed. Simply installing procedures and systems for learning will probably not result in significant change. We suggest that paying attention to the capability to commit and engage by strengthening the belief in the company’s values could well have a positive effect on the capacity to renew.

The benefit from discussing the organisation with the 5C model is that it does not provide a hard checklist of capacity gaps that need improvement. But it builds a shared awareness of the capabilities that the organisation wants to develop, which helps to direct and monitor organisational strengthening.