The Shamrock way
Despite a growing global population, different branches of education, increased numbers of professional institutions, higher education being adopted as important agenda by governments, all over the world the availability of skilled workers is actually shrinking. This is because less importance is given to analytical skills, strategy designs, conceptualization, sensitization to real time issues and contemporary issues. The dynamics of demographic gaps in developing world related to age and sex are drastically bizarre. Birthrates are still high, and population is growing. While the younger population is growing in numbers, the older population’s longevity due to innovations in healthcare is increasing. Over the next few decades, many countries will experience what David Bloom, chair of the department of global health and population at Harvard’s School of Public Health, has called a “demographic dividend”: a rising proportion of young people entering the workforce, driving productivity and economic growth.
An estimated 31% of organizations worldwide find it difficult to fill positions because of talent shortages in their markets, reports the 2012 Talent Shortage Survey from ‘Manpower’, an international employment agency. When it comes to attracting employees with critical skills, the task becomes even more difficult. Today, 65% of global companies and more than 80% of companies in fast-growth economies are having problems finding employees with the skills they need, reports Towers Watson, an HR consultancy. This fact is despite the growing ranks of college-educated workers and the high unemployment in some of the best-educated markets.
Charles Handy, the Ireland born writer and management philosopher is well-known all over the world for his work on organizational structures and designs. Handy told the world that the perennial shortage faced by the business world for the skilled manpower will be solved by the Shamrock kind of organization. The shamrock leaf shape is a symbolic representation of an organization with three types of workforce, having a main body of core workers with connected lobes of part-time/temporary workers and freelance workers. According to him, this structure of workforce symbolizes the Shamrock ( each leaf symbolizing one structure of workforce). The 3-leafed clover or shamrock was supposedly used by St Patrick to illustrate the Christian doctrine of the Holy Trinity. This says that God exists in three forms – as God the Father, as God the Son (ie Jesus Christ) and as God the Holy Spirit. Handy describes the Shamrock model as the network model of organizations. A network-based structure manages the diverse, complex, and dynamic relationships among multiple organizations or units.
The first leaf consists of core workers in the organization. They are qualified professional technicians and managers. They are essential to the continuity of the organization, and have detailed knowledge of the organizational work culture, processes, objectives and practices. They are on the roll of the organization. The core workers adhere to the organizational rules and regulations framework.
The second leaf consists of operational outsourcing of the company. The second group consists of contracted specialists such as the advertising firms, R&D, computing, security and the catering and courier services. They operate with the organization’s existential culture and are rewarded with fees rather than with salaries or wages. Their contribution to the organization is measured in output rather than in hours, in firm results rather than in how much time is spent by them.
The third leaf of Handy’s shamrock consists of a flexible labor force, discharging part time, temporary and seasonal roles. They too operate within the organization’s culture. Handy says though they may be employed on a informal and relaxed basis they must be managed systematically and not casually. Their worth should be measured in terms of their output. They usually consist of part time employees in production, sales, IT, R&D and other processes. Sometimes they work from their homes and are electronically linked with the organization.
The best example of Shamrock organization is various SBU units of Rank Xerox, the UK based company. In the early nineties when Rank Xerox experienced that their business processes were not sufficiently documented and this was causing many hurdles in their system they went in for business area analysis (BAA). They identified 145 distinct business processes and 80 data entities. Through a process called “affinity analysis”, these two inputs were used to form a 145 x 80 matrix. Affinity analysis allowed Rank Xerox to identify clusters of processes and data relationships. 17 business processes were identified, which matched the functional areas reasonably well. Feeling that 17 distinct areas were too many to redesign at one time, senior management prioritized these into seven main areas. They were customer order life cycle, customer satisfaction, installed equipment management, integrated planning & processes, logistics, financial management, personnel management. Without skilled and experienced manpower the business integration was not possible. Xerox adopted the Shamrock pattern, besides their core employees they hired operational outsourced labor and a mix of flexible part-time labor force; thus growing in the Shamrock way.
In the present scenario not only business organizations but even governments of many countries have started operating in the Shamrock way. The Brazilian government has proposed a new outsourcing commission, an organization that would be able to define and enforce new laws that affect buyers and sellers of outsourced services. The first point to note is that the commission is aiming to respond to new corporate structures that have long been common in the US and Europe. It has been common for companies to explore the outsourcing of non-core processes. The commission aims at helping bring in the Brazilian employment law into an age where companies are not single bodies, but collectives of different legal entities, individual contractors, and occasional collaborators. If you analyze closely there are specific areas where Brazilian employment law is quite uncommon compared to other nations.
Handy has gone on record stating that more and more individuals will opt out of formal organizations as the work culture restricts their creativity and freedom. The breed of intelligent and artistic workers prefers selling their services at a pace and at a price which suit them. We already are seeing some dynamic organizations taking real advantage of Shamrock style. Handy argues, nevertheless, that organizations can do a lot more to help the individuals channelize their creativity and innovativeness and by doing so rich profits can be reaped. We are witnessing far-reaching cultural styles in business operations today. In an ever clambering world of business organizations like LG, Samsung, GE, P&G, HP, Timberland etc are already using principles of Shamrock organization. These organizations have realized that innovations are fostered with its adaptation.
The Japanese are ahead of the rest of the world. In Japan, the most talented people move around from experience to experience as quickly as possible which ensures their talents can be tested in different situations, with different organizational cultures and different managers. When you are exposed to drastically different work cultures, you realize different facts and perspectives. This ensures in one discovering what he is good at. The Shamrock culture works brilliantly in Japan.
Handy’s deliberation has given the world ideas on work-life balance. Many people have opted for serving an organization from outside which helps them manage their career and life both optimally. Handy has an exciting revelation of predicting future trends and changes in organizational structures and workplace practices. He envisages that in 21st century most men and women will experience a mix of paid work, voluntary activities, higher studies, and personal life. Most having two or more paid sources of work. Coining the phrase ‘portfolio worker’ to describe this phenomenon he has also anticipated the downfall of large hierarchical organizations. He says that those large hierarchical organizations will be replaced with more loosely structured federated global enterprises.
Great days ahead for Shamrock organizations!!!