Interpretation of "Yang's Triangle" - How to Turn Employee Ability into Organizational Power

If the market in the past can be described as step-by-step or step-by-step, then the current state is unpredictable. In a market environment with an unpredictable future, how can a company achieve sustainable development? The answer given by Yang Guoan, Philips Chair Professor of Human Resource Management at China Europe International Business School and President of the Learning Alliance for Organizational Capacity Building, is, "To build a team fighting force that can quickly respond to changes in the external environment." This kind of ability is defined by Yang Guoan as Organizational ability, "This does not refer to individual ability, but the overall combat effectiveness of a team (whether it is 10 people, 100 people or 1 million people), it is the DNA of a team (or organization) competitiveness, it is a team's ability in a certain In some aspects, the ability to significantly surpass competitors and create value for customers.” In Yang Guoan’s view, appropriate organizational capabilities are one of the two key factors to ensure the continued success of an enterprise, and another key factor corresponding to it. , is the correct strategy.

“Sustained success = strategy × organizational capability. The relationship between these two factors is multiplicative (rather than additive). If one of these factors fails, the enterprise cannot be successful.” Then, the relationship between organizational capability and strategy What is the relationship between them, and how is organizational capacity determined and how can it be built into a system? Yang Guoan has devoted himself to researching and summarizing the unique Yang's triangle organizational capacity building theory and framework for many years, which has systematically solved these problems.

The Yang's Triangle Theory was gradually explored and perfected by Yang Guoan during his many years as a university teacher and as a corporate executive. In 1990, Yang Guoan stayed to teach there after graduating from the Business School of the University of Michigan. In 1998, at the invitation of Shi Zhenrong, the founder of Hong Group, he founded the Hong Benchmarking College. At the end of 2000, when the Hong Group's business encountered major setbacks, he was appointed to serve as the group in danger. Chief Human Resources Officer, joined CEIBS in 2004. Yang Guoan's Triangle Theory has been verified, enriched and perfected again and again in the course of Yang Guoan's career development from theoretical research to practice to theoretical research.

Organizational ability depends on strategy

"Organizational ability is the fundamental guarantee ability for strategy implementation." Therefore, in Yang Guoan's view, the determination of organizational ability must be inseparable from the strategic direction. "Enterprises must first analyze their own business environment, formulate the correct strategic direction, and then, according to the selected strategic direction, identify two or three organizational capabilities that are most directly related to the strategy." Yang Guoan believes that determining such organizational capabilities It is not something that can be done by focusing on the inside of the enterprise as usual, but requires a process of review, thinking and decision-making from the outside to the inside. First of all, it is necessary to see what changes are happening outside, so as to clarify the direction of the strategy. What field to choose to operate in, what products and services to provide, and what resources to support these actions; after figuring out these issues, it is necessary to determine the matching business model, how to achieve differentiated competitiveness, and how to rely on these Capability realizes value, and how to realize the realization of these values; finally, according to the answers to these questions, determine the matching organizational capabilities (see Table 1: Organizational Capability Planning Template). Speaking of which, Yang Guoan, as if suddenly remembered something, paused and said in a serious tone, "Chinese companies used to be low-cost manufacturing, representing the industrial economy. However, now, with the escalation of global competition and consumer demand accounting for In a dominant environment, they have to climb to the two ends of the smile curve, realize independent technology and establish their own brand, and such strategic transformation needs to be matched with different organizational capabilities in the past, such as the ability to respond quickly to changes, Continuous innovation ability."

There has been an entrepreneur who has been troubled. According to his strategy, he has sorted out 6 or 7 organizational capabilities, and some of them seem to be contradictory, such as low cost and high quality. For such a phenomenon, Yang Guoan believes that the problem lies in the lack of focus and focus on strategy. "I have always emphasized the need to focus, and the organizational capacity should not be too much, not more than two or three. If it exceeds, it will be difficult to build strong organizational skills, because the tools and resources used are difficult to focus. Moreover, the time of the company and employees , energy is also limited." For those seemingly contradictory organizational capabilities, Yang Guoan believes that it is not impossible to coexist at the same time, the key is that the senior management team of the company must figure out which of the seemingly contradictory capabilities is the main driving force. For example, for low cost and high quality, if low cost is the main driving force, then like Galanz, under the premise of ensuring quality, we will continue to reduce costs, but if we want to improve quality as the main driving force, then we must Like Toyota, we can reduce costs through quality improvement measures, and through continuous quality management improvement programs, we can reduce the consumption of materials, reduce the rate of defective products, and reduce unnecessary waste.

Of course, it is unrealistic for highly unrelated diverse groups to focus on two or three organizational capabilities in the many areas they are involved in. Therefore, Yang Guoan believes that for these diversified enterprises, the group level should emphasize some common and shared things, including the company's core values, the sharing of interests of the senior management team, knowledge management, etc., while the following business units must be Highly focused, each division has unique organizational capabilities as a result.

Building organizational capabilities relies on three equally strong pillars

After organizational capabilities are clarified, the next step is to build them. Yang Guoan believes that building organizational capabilities requires three pillars: employee capabilities, employee thinking patterns, and employee governance methods. Together with the organizational capabilities built, they form the Yang Triangle framework (see Figure 1, the triangular framework of organizational capabilities).

The three pillars in the Yang Triangle are in order. The first one must be employee ability, that is, employees must have relevant abilities or potential skills. For example, if organizational capability is defined as innovation, then employees are required to have active creative ideas, self-confidence to challenge authority, instinctive sensitivity to market demand, and the ability to continuously learn. For organizations pursuing low-cost capabilities, Employees are required to have strong executive power and be able to bear hardships and stand hard work. Obviously, it is difficult for employees with the latter ability to achieve innovative organizational power, no matter how much training is given.

Once an employee with the required competencies is found, the second pillar, the employee mindset, comes into play. The ability of employees to achieve organizational power does not mean that they will do it voluntarily. Therefore, it is necessary to use metaphysical things such as core values, culture, and some management methods born from them to guide employees, so that everyone cares about and works every day. The things that are pursued and valued are matched with the competencies required by the company. For example, Mindray, which emphasizes its ability to innovate, motivates its employees with the values of "winning the respect and trust of customers around the world" and the standard of "Minray products must face the world and compete with world-class rivals". At the same time, it also details innovation. Performance appraisal allows everyone to clarify the direction of innovation and the results of innovation, and to enjoy the benefits of innovation for personal development.

After employees are capable and willing to do it, the next step is to build a platform for employees to fully display. Therefore, it is the turn of the third pillar - employee governance. In this link, companies must consider how to design the organizational structure to support the strategy, how to balance centralization and decentralization to fully integrate resources, how to establish a process to manage this platform, and how to establish a system to support this process.

Yang Guoan believes that in order to successfully build organizational capabilities, these three pillars in the Yang Triangle are indispensable. Moreover, organizational capabilities must be solid, and the building of the three pillars must conform to two principles. One, balance, is three. The root pillars are the same length, and there is no shortcoming; two, matching, all three pillars must be in harmony with the required organizational capabilities.

The three pillars of the Yang Triangle focus on employees. For this reason, some people think that no matter how good the ability of employees is, if the leadership of middle and senior managers is not good, it will not help to build the ability of the organization. To such a question, Yang Guoan responded: "The employees I am talking about do not refer to grassroots employees, but to all those who are paid in the company. Among them, middle and senior managers should be the main components, their ability, thinking and understanding of The way they govern will play a pivotal role in the formation of organizational capabilities.”