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Organizational Maturity

Let’s consider the maturity of an organization as a measure of its ability to adapt to the environment, to learn, to improve results and economic and/or social performance, all that with superior results, in the top decile with respect to the concurrent organizations in their activity.

It is a consequence of their knowledge, learning experience and growth as an organization. Not only can it be considered in a general way, but can also be particularized, as we will see, in a particular discipline or area.

The more advanced the maturity, the higher the results in general, and the less chance that incidents or errors will lead to losses in the quality or use of resources.

A new organization or a new company starts, in principle, at a certain level of maturity, without being conditioned by an history and culture acquired over time.

An old company or organization, with many years of existence, has made a long journey towards organizational maturity, with advances and setbacks, and that, have marked a certain culture, adapted or not to new environments.

Often, adapting to rapid changes in the environment requires changes in the acquired culture, which can be achieved not without effort and time. Time can be accelerated; the effort is anyway more difficult.

The challenges posed to reach the highest maturity levels are very strong and more for companies with a long history. It is an costly trip for most organizations and for the people within them; each transition to a new phase means a cultural transformation and a change in power structures and governance.

Surely, we have sometimes wondered why in a certain initiative, a new project, process, innovation or implementation of a system, we repeatedly fail. The answer could be found in another question:

Is this project, new system, innovation or new process, assimilable or compatible with our degree of maturity?

If not, it is very likely that we will continue to fail in any new attempt and also each failure will be one more obstacle, due to the lack of motivation of people.

It is therefore important that we recognize what phase of maturity we are in, to adapt the type of projects, improvements or implementation of systems that we can carry out, or first make the effort to progress to the appropriate level of maturity.

Schematically a maturity model describes 5 levels or phases.

Associated with each level of maturity is a complete set of subtly different management practices and behaviours. The limit of each level of maturity represents a kind of threshold, at these points, there is a need for some cultural changes and organizational strategies, as do the methods, processes, and technologies to support them.

Integration

Let’s recall, however, that each of these changes is made simultaneously at the intersection of three spheres:

  • People and habits,
  • Processes
  • and Systems (technological tools).

Not just one or two. The integration of three elements: People and habits, processes and systems, is essential in any process of change, if real benefits are to be achieved.

We have new tools and technologies at our disposal but we must direct them to support an integrated model that recognizes the fundamental role of people and their habits, attitudes and behaviours.

Let us return to the outline of a maturity model that describes 5 levels or degrees.

Phase 1, we could call it “initial” although often, in companies with a long history, it is the result of their culture based on specialization and departmental organization, fruit of the division of labour (Adam Smith and Taylor), production in series and assembly lines of the 20th century. In other cases, it is the result of the start as a family business or of the strong leadership of the founder.

Its structure is usually hierarchical or “vertical”. It is characterized by working with the foundations, individualities, lack of stability and methods. At best, “coordination” between departments and sometimes the formation of “ad hoc” working groups are attempted.

With change, moments of crisis usually occur, which usually generate chaos. Specific efforts must be made to regain basic management controls. Organizations at this level tend to function from ‘top-down’. They focus on reducing costs, the frequent “crises” are usually solved by “heroes” who are recognized and rewarded. Problem are seen in terms of technology and deployment of applications or systems. Little interdepartmental communication and between functional areas, which tend to function as “silos”.

The transition to the next level is primarily about implementing stronger management control within the existing functional structure by increasing coordination and creating work teams.

In Phase 2, the organization designs the basic processes that allow eliminating failures, stabilizing day-to-day operations, and decreasing emergencies and crises. Achieving those goals means engaging employees across all functions to collaborate and move from forming temporary work groups to working in more permanent cross-functional teams. There are usually tensions, because it involves changes in the culture and begin to undo silos. New metrics are beginning to be established that are no longer aligned with functional silos, so the improvement of a process only works if the common objective of the process is reported and shared.

Moving forward into phase 2, ‘unforeseen’ events are less frequent. Processes are under better control and routine tasks are routinely performed with consistent procedures and few errors. The objective then is to persist in improving the basic processes, in creating habits and best practices. In measuring the speed of processes, their consistency and repeatability.

The result is a management much more capable of responding to changes in the environment with flexibility and methods, far from improvisation and chaos.

The transition to the next level is made by obtaining stable and repetitive processes without failures and having created habits, functioning as an open, customer-oriented organisation.

Entering phase 3 means that the objective is the automation of processes with intensive use of technological systems, guided by the acquired knowledge. The automation of all processes using technological tools allows freeing up resources and making the organization more horizontal and with fewer hierarchical levels. Releasing resources allows to use them in the progression towards excellence and innovation. In some cases, there is a fear that all this is only a cost reduction exercise.

It is important at this stage to know whether errors in the processes have actually been eliminated, so that they are not transmitted to the systems in automation, which would increase chaos and confusion.

Phase 3 is also characterized as “definition”, the operational processes have been documented and assimilated. They can be automated with new computer systems (ERP, CRM, etc.) that facilitate obtaining measures and performance indicators. To have done it before would have caused us problems, since we would have automated the chaos and the lack of repeatability.

The real success in this phase is understanding the opportunities to use resources for innovation and results with clients, segment by segment. It is also where you can use change management techniques and start to get used, as a learning organization, to take advantage of experiences to increase knowledge and establish systems for sharing and fixing it.

In Phase 4, the results of each process are highly predictable. The organization is operating with operational metrics that help in discovering where to improve and adapt. However, it is essential to understand that it is not about pushing standardization to the limit and above all else. A shared strategy is established and linked to an innovation process that no longer serves day-to-day operations but is oriented towards the future.

There is also innovation in internal processes, so they specialize according to the variable needs of different segments and clients.

It is flexibility to avoid bureaucracy, to simplify all processes with the help of methodologies such as “Lean” and “Six Sigma”. In this way we “optimize” all processes.

The application of the concept of value for the client (external and internal) and stakeholders value, in all processes, begins to show that it is not just about flexibility but about “agility”.

Phase 4 is the integration of all systems and processes in a single management process, with optimal use of technological tools, it is a unique management process that we call “Integrated Management” or “Integrated harmonic management”, at the service of the strategy, connected with innovation, and to day to day. But with a focus on the customer and on people and teams.

Level 5 organizations are scarce. They have reached the highest in operational excellence but continue to improve, they have an efficient innovation process that opens up more possibilities for the future and they have internal tools, measures and indicators that guide and motivate staff and multifunctional teams with a high level of commitment.

Innovation is a future-oriented process and operational processes are part of “day to day” and usually work with positive indicators at “six sigma” levels.

Process optimization has made them “agile”, so that their capacity for response and anticipation is well above, in the top decile, of their activity sector, as well are their results.

The organization has become more “flat” or horizontal, processes and project oriented.

Transition

In each of these transitions there have been transfers of power and a cultural change. From the beginning to phase 5 this process can last about 8-10 years. Normal is about two years per phase, although this can be accelerated with outside help.

As we progress through the maturity phases, we have begun to “harmonize innovation and the direction of operational processes”, that is, harmonize future project results with day-to-day performance.

Remember that:

Many times, good initiatives fail. A good idea fails, a project that would allow to achieve a necessary objective, and that has been carried out by highly trained people, with good motivation, but still fails. And it fails again. At the third or fourth intent, people are already suspicious, unmotivated and frustrated to start anything.

Improvement projects or initiatives will come and be successfully implemented only when the foundation is established. And they will also be sustainable over time.

When the projects to be implemented are consistent with the actual maturity phase, and when the processes are clearly defined and consistently carried out by people who feel “like theirs” because they had participation in designing it. Well-trained people, who also behave appropriately because they “know” what they do and “why” they do it. Moving a company from phase I, from coordination and ‘extinguishing fires‘, to overcoming it and creating a new culture and management style, requires firm and consistent leadership.

Existing maturity models

As said at the beginning, maturity can be seen in a general way, as we have described so far, but it can also be particularized in a particular discipline or area.

Hence, a considerable number of maturity models have been developed.

Ludden (2004) has already described the model reuse for development in many other fields, including project management and software development. It is estimated that there are currently approximately more than 40 different maturity models in circulation and each one addresses a specific aspect of the organization.

Below we can see a list, not exhaustive, listed by the name by which they are known and from which you can find extensive bibliography. (First six will be more detailed in successive posts)

  1. 1. Maturity in Integrated Management, (Integrated Business Management)
  2. 2. Maturity in People and teams, (People Capability maturity)
  3. 3. Maturity for innovation management, (Innovation Management Maturity)
  4. 4. Maturity for project management, (Project Management Maturity Model)
  5. 5. Maturity applying key indicator systems, (KPI’s System management maturity)
  6. 6. Maturity for strategic management, (Strategic Management Capability Maturity)
  7. Software Engineering Capability Maturity Model (SE-CMM)
  8. Integrated Product Development Capability Maturity Model (IPD-CMM)
  9. IT Service Capability Maturity Model (IT Service CMM)
  10. Cultural Project Management Effectiveness Model (CPMEM) by PMGS
  11. Programme Management Maturity Model
  12. Project Risk Maturity Model (RMM)
  13. Earned Value Management Maturity Model (EVM3)
  14. Services Maturity Model
  15. Self-Assessment Maturity Model (SAMM)
  16. Web Services Maturity Model
  17. e-Learning Maturity Model
  18. eGovernment Maturity Model
  19. Change Proficiency Maturity Model
  20. Performance Engineering Maturity Model
  21. IT Architecture Maturity Model
  22. Website and Internet Maturity Model
  23. Software Reliability Engineering Maturity Model

Author

Francesc Guell is the owner of this site. He was CEO and director of international companies in specialty chemicals and pharmaceuticals. The last 12 years was associated with international consulting groups, providing advice and support to businesses on topics such as innovation and agile innovation processes, operational excellence, knowledge management, change management, strategy and integrated business management. Currently creates and presents courses and workshops on these topics. He graduated as a chemical engineer, postgraduate from ESADE Business School in Business Administration and Master in Knowledge Management. He participated in numerous programs, seminars and ESADE, IESE, EADA, APD and MCE (Management Centre Europe). He is author of articles, presentations and courses on innovation in strategic management, integrated business models, knowledge management, performance measurement, change management and excellence in business processes. See more in: Professional Profile