Richard MacLean & Associates, LLC

Right-Sizing Organizations for Quality- Part2

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Courtesy of Richard MacLean & Associates, LLC

Adequate staff resources are essential for achieving quality environmental, health, and safety (EHS) programs. The technical challenges, internal coordination difficulties, public relations problems, and so on are rarely insurmountable—if you have sufficient fiscal and human resources. Without a minimum critical mass of resources you can become consumed with day-to-day firefighting and never make progress. In the worst case scenario, an issue can erupt into crisis, putting the company at risk and your reputation and career on the line. Conservative risk managers, wanting to be on the “safe side,” would argue for substantial resource commitments. However, the demand for rising profits, one of the primary drivers in a competitive marketplace, argues for limiting resources to the “bare bones.” How does the strategically thinking EHS manager determine the optimal EHS resource level? What is the most efficient EHS organizational structure? How can this resource level and organization be justified to senior management? This is the second in a series of three articles. Part 1 provided guidance on how to determine the appropriate staffing and resource needs. This article, Part 2, discusses how to organize these resources for increased efficiency. Part 3 will supply suggestions on how to make a convincing business case to management to implement the proposed course of action. The authors are senior-level EHS practitioners who have worked with executive management to successfully reorganize the EHS departments of several large multinational corporations. The methods discussed are similar to those employed by other functional disciplines to define and obtain resources. Written in the context of a corporate EHS group, these techniques can be modified and adapted to any functional level within a broad range of organizations. Whether you are an individual contributor or a manager, these articles can help define the resource issues that all organizations eventually face.

In Part 1 of this series (see May EM), we discussed how to (1) synchronize the strategic direction of EHS activities
with the company’s business objectives; (2) evaluate current resource utilization in keeping with these objectives; (3) develop a resources map to guide future activities; and (4) begin addressing EHS staff issues. In this article, we examine how the EHS organizational structure can be optimized.

Organizational structure is almost always a reflection of a company’s culture. Some companies prefer decentralized structures, others prefer centralized staffs, and so on. For the most part, an EHS organization must fit within this management philosophy, unless there is an overwhelming reason to do otherwise. While you may think you have limited degrees of freedom in selecting an organizational structure, there are a number of options that might fit within any existing structure.

Over the past decade, there has been a growing trend to reduce the cost of “commodity” or “specialized” services by
consolidating these staff support functions into internal “shared service” groups or by outsourcing these activities to consultants. This movement toward consolidation and outsourcing applies to all staff support functions, not just EHS. We will examine this trend in detail.

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