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The lattice organization structure: learning from the expectations of

Generation-Y talents in Engineering & Construction industry

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The lattice organization structure: learning from the expectations of Generation-Y talents in Engineering & Construction industry

Dibyendu Chakraborty

Abstract:

The purpose of this paper is to present the statistical analysis and the result of a survey undertaken to study the influence of motivating & hygiene factors on Generation Y talents in a matrix organisation structure within the Engineering & Construction industry. In recent times, academicians & practitioners in all fields of management have been engaged in identifying the need, interest & passion of Generation-Y. Since, this future generation will be engaged in a lot of Strategic Implementation, their views are considered of high value. The author, being part of engineering & construction industry, conducted a sample survey among young trainee engineers to understand what motivates them and what maintains job hygiene. This study was based on their verbal feedback that they want their job content to be congruent with their passion. In a project matrix work structure, can we imagine of passion as a third dimension? When corporations are more & more engaged in CSR activities, can this be the third dimension? Instead of a matrix organization structure, can we build a workable and sustainable three dimensional “lattice structure”? This article examines how “Project function” & “Line function” influences selected motivation & hygiene factors as perceived today by Generation-Y. Further, with the introduction of the third dimension, the study presents the change in the influence pattern. Although it is based on a restricted sample, but this case study provides some revealing facts for project management community to explore further. Key Words: Generation-Y Talent, Lattice organization structure, Motivation – hygiene factor, Engineering & Construction industry. Author’s Profile:

Author is a Mechanical Engineer from Jadavpur University, Kolkata & member of Project Management Institute (PMI) Mumbai Chapter. He is currently working with Uhde India Private Limited, Mumbai as Deputy General Manager-Projects. He has 22 years of experience in Project Management in Refinery, Chemical & Fertilizer domain. Prior to this job, he has worked with Larsen & Toubro limited in similar field. Apart from the regular official work, he is presently perusing his Executive MBA with European School of Management & Technology, Berlin- Germany. His areas of interests are international strategy and talent management.

Postal address: A-403 Greenwich, Hiranandani Estate, Ghod Bunder Road, Thane -400607. Telephone : +91-22-25861074 , Mobile : +91-9167251434 E-mail : dibuchak@rediffmail.com , d.chakraborty@thyssenkrupp.com

The lattice organization structure: learning from the expectations of Generation-Y talents in Engineering & Construction industry

Dibyendu Chakraborty

1. Introduction

Idea of this article is originated from a case study undertaken on Generation –Y talents in Engineering & Construction industry (referred as E&C). The study itself has roots on apparently two disjointed issues: i) inflow and nurturing of future Generation-Y talents, ii) working conflict of current matrix organization structure. Although the field data is collected from E&C industry, but these two issues have general appeal in practically all organizations, especially where project is executed.

I would like to set the context in bigger landscape by quoting Mr Amitabh Kant’s thought provoking key note address delivered in 2012 PMI India annual conference in Chennai. Mr Kant, CEO & Managing Director of Delhi Mumbai Industrial Corridor Development Corporation Limited, provided the details of mammoth task ahead in next 20-30 years to create huge industrialization in India by urbanization. He also quoted management thinker late C K Prahalad & explained that India need to build 500 cities by 2020. This brings our focus to the very basic question, who will perform majority of the work? The generic reply is Generation-Y talents, spanning from mere construction workers to high end managers.

Next associated question comes what motivates these talent pools to perform the work? Is it nationalism? Is it sense of duty? Or is it internal urge? In current protectized E&C organizations, we still feel unbalanced forces between “line function” and “project function”. Of course, it varies from organization to organization depending on responsibility-authority-reward structure. But to understand this aspect, the first requirement should be to know what the current perception of this generation is. I have used the word “learning” in the topic heading specifically for this reason.

To make the context clear I have briefly described general characteristics of Generation-Y and E&C landscape at the beginning of this article. After that, the backgrounds of this study and survey methodology are discussed. While carrying out the survey, I have formulated hypothesis to impart structure to this work. According to this hypothesis, another dimension, referred as CSR function, (signifies passion or areas of interest of generation-Y talents) is assumed other than project function and line function which are prevailing in a typical matrix organization structure.

Finally, survey results and observations are added with applicable conclusion. In my personal opinion, generational issues are being handled by various IT companies because of large young talents already existing at least for average 10 years. So, the survey results may have some resonance with whatever good practices already existing in IT industry. But I would like to draw attentions of the readers in different perspective here. When E&C views are also getting stronger, probably it calls for much larger & generic analysis rather than prescriptive solution sporadically adopted by some companies. Hence, I have proposed mental model of three dimensional “lattice structure” (Figure 9b) of organization instead of matrix structure predominantly used by project management community.

This article has limitations as well. Firstly, the survey questions directly compare perceptual importance of any pair of forces drawn from Line, Project and CSR function. But influence of CSR function on existing Line-Project pair is drawn (figure 7&8) by using arithmetic proportionality for which I have no academic reference material. Second limitation is about the scope of selection of motivation & hygiene factors. Since, the proposed conclusion is only towards generic direction & not to have any quantification or prescriptive solution, I feel these limitations should not seriously distort the picture.

2. Brief about Generation-Y talents Several studies were undertaken in last decade on generational issues & probably many more are still continuing. Question is who are generation-Y people? We have generally accepted western definition of generations (c), although some ambiguity still exists in regards to the overlapping birth dates with other generations. Interestingly,

we find evidence of completely different definition in India (g). I have followed western definition in this article & consider Generation-Y as people born between 1980 & 2000. As per existing literatures (c) (d) (e), they are confident, having high expectation, impatient and like to see immediate result. Since, they are born in digital era; they are technology savvy and like latest modern gadgets. Many of them are quite demanding with employer with higher level of educational need. They are Collaborative, aware of environmental preservation & habituated to social networking by e-platform. Generation-Y wants to make quick impact on day one and thrives for excellence. Their desire to become “unique” drives them continuously to search for meaning & purpose in their job. 3. E&C landscape & relevance of Generation-Y talents As per recent data (a), Government of India plans for ₹40.9 trillion investment in infrastructure sector for twelfth five year plan (2012-2017). Since, infrastructure investment is considered as true indicator for E&C job, this statistics itself signifies large amount of work for this sector. There are several players involved in E&C space starting from owner/developer, independent design houses, PMC (project management consultant), equipment suppliers, package contractors, piece rate contractors or EPC contractors. Complexity and size of engineering & construction projects has increased considerably over the years. As a natural consequence, project owners started relying on the specific skill and project management capabilities of contractors. This is seen in increased number of lump sum turnkey contracts being awarded by project owners to EPC contractors who carries maximum risk for fixed price. EPC segment is a part of complete “E&C” segment but we have some numbers regarding human resource requirement of this segment to relate to Generation-Y. According to recent data (a), ₹17.1 trillion out of ₹40.9 trillion investments is estimated to be through EPC contracts. At present, this sector employs 1.2 million of organized manpower and 30 million of unorganized manpower. This total figure is likely reach 58.3 million by the year 2022. Proportionately, the number of manpower to be engaged in complete E&C segment is even much larger than EPC segment. Now let’s take a look of what could be the demography of such a large number of human resources. May 11th 2013 issue of The Economist reports interesting data on this subject (Figure 10) (b). India’s working age population is rapidly increasing & will probably dominate the world till 2045. If we interpolate numbers as given in Figure-10, we get combined age bracket of “20-29 years” as the largest talent band by the year 2022. They all will be generation-Y and form the part of 58.3 million talent pool in EPC sector. One can imagine even higher number in complete E&C value chain. Hence, organization will face some challenges in regards to their “need” and “want” which they cannot ignore. Some illustrative example can be given (table-1) to understand these challenges.

Table-1 Today Tomorrow

Engineers, posted at design office of E&C organization, get engaged in project whatever assigned to them.

Engineers will bargain with organization to get job of their choice & interest.

Skilled welder works in welding field throughout his carrier.

Skilled worker may quit the job for higher study in open university in “agriculture” to take up family farming.

EPC organization struggle to provide basic labour infrastructure like labour colony, transportation at construction site.

They will be needed to look into wireless internet service in labour colony, mobile crèche/school for children of the workers.

Skilled mason takes up any civil construction job. Skilled mason, passionate about football, may ask for only stadium construction job.

Shuttering carpenter does manual job for civil casting.

Shuttering person will demand factory like precision tool and modular, hydraulically operated shuttering structure.

4. Background of the study:

a. Organizational context

Uhde India Private Limited is a part of Thyssenkrupp AG Company in Industrial Solutions business segment. Uhde is present in the complete value chain of plant technology business starting from basic feasibility study of a plant to the construction/commissioning on turnkey basis. Primarily the company is divided into four major divisions: engineering, implementation, sales and commercial/finance. Engineering division is further subdivided into several departments with required number of core subject matter experts (SME). Each department can be thought of as "knowledge centre”, it provides technical knowledge to the people, acquires new talents, trains existing talents, manages leave schedule and initiates performance appraisal. This function can be called as "Line Function”. Project is typically executed by forming task force at head office as well as at construction site. Department heads of Line function provide talented manpower on temporary loan basis to the project task force. All employees under project task force reports to Project Manager during this temporary duration & their work can be termed as "Project function".

b. Hidden hypothesis

Considering the E&C landscape described above, corporations will need to engage large pool of generation Y talents to achieve mammoth task ahead but several issues play important role in current E&C organizations. Core considerations for my hypothesis are --

Generation Y talents want to produce something worthwhile and they look for meaning & purpose of job. In regards to motivation & hygiene factors, they perceive influence of line function and project function

differently, sometimes with direct conflict. If passion & interest (of Generation Y) matches with the job nature, they may find self-concordance (f) & get

engaged to job/organization by large extent. While selecting project task force members, most of the times it is not possible to offer job of their choice. Corporations are increasingly getting engaged in CSR (Corporate Social Responsibility) activities. Generation Y can fulfil their dream by involving in desired “CSR function”, which may have some meaning

to their interest. Influenced by the recent researches (c) (d) (e) on Generation-Y, I used intuition to form one important hypothesis to begin the study: “Passionate work influences perception of motivation & hygiene factors in matrix organization structure.”

5. Talent survey methodology:

I have used eminent psychologist Frederick Herzberg’s “motivation-hygiene theory” (f) in the background to frame out survey questionnaire. The theory says motivating factors lead to job satisfaction and hygiene factors lead to job dissatisfaction, but both are distinct from each other. In other words, maintaining hygiene factors can keep dissatisfaction away but other set of factors (motivating factors) can only bring job satisfaction. Table-2 summarises these factors used in study— Table-2

Motivating Factors Hygiene Factors Achievement Policy & administration Recognition Supervision Work itself Relationship with boss Responsibility Work condition Advancement Salary Growth Relationship with Peer

52 Graduate trainee engineers were surveyed as a part of the study. Participants were explained about some interesting CSR projects which can generate interest because of congruence with talent’s passion axis. Some typical imaginary examples were given to them as—

Design & fabrication of modular building and substation required by Govt. of South Africa for its slum development.

Study project about the micro-finance model for widows to maintain their old-age life required by Govt. of India.

Implementation of project management framework for Bollywood to pay actors based on "schedule adherence quotient”.

Implementation of supply chain model to handle Bombay Municipal Corporation's waste disposal squad. Focus of this study was to find out the influence of passionate work (which was represented in the form of attractive CSR work of talent’s choice) .Each motivation-hygiene factors were picked up one at a time in combination with one pair from Line, Project, and CSR functions to form questions. Respondents were asked to distribute a total 100 points to the elements of selected pair (of either Line-project or Project-CSR or CSR-Line) to express how do they perceive their importance.

6. Key data & observation:

Key find-outs are summarised in Figure 1 to 8. These figures show arithmetic average of responses of all 52 generation-Y talents. To interpret the numbers in figure 1-8, an illustrative statement can be provided as--

“Interpreting Figure 1: Aggregated voice of all generation Y talent is that the effect of “achievement” as motivating factor on Line function is 56% and on Project function is 44%.”

Or

“Interpreting Figure 4: Aggregated voice of all generation Y talent is that the effect of “Policy and administration” as hygiene factor on Line function is 38% and on Project function is 62%.”

Figure-1 clearly shows current state of conflict in Project-Line function plane. For example, respondents feel that “work itself” is more motivating in line function rather than project function. Verbal discussion with one of the electrical engineer reveals that lot of administrative reporting is involved in project task force which is not so attractive compared to core departmental design which he loves to do. Another view expressed by someone narrates that the sense of “responsibility” gets sometimes subdued because of the presence of project manager who always comes in the frontline shadowing their existence. Similar aggregated feedback hold good for “achievement” & “growth”. In contrary, they feel that carrier “advancement” is potential motivator in project work for all the hard work they do in project task force. It is worth mentioning that the original work of Herzberg (f) on 1753 events shows that “Achievement” is the single largest motivating factor. In our context, this factor among others are more motivating in line function goal, thus seriously underplay against project goal. Cobwebs of motivating factors in figure-2 & 3 are generally balanced. However, I would like mention specific contrast on “work itself” in figure-2 &3. Figure-3 result appears to be in contradiction with the initial hypothesis. If “work itself” is very interesting and matches with the passion of generation-Y, then CSR dimension should have been far exceeding than project function or line function. Figure-3 result does not match with this expectation but figure-2 does. This point probably needs more exploration from project management community. Figure-4 shows very convincing cobweb as all the hygiene factors have greater influence in project function. Although, I do not have any record of verbal reasoning from any of the respondents, but I intuitively feel it to be true indicator of natural happening. My argument is like this – project task force in head office and in the physical construction site is “happening place” in E&C work. So, dissatisfaction (if any) can get generated only in happening place i.e. project work. Since, hygiene factors maintain dissatisfactory elements away; they are potentially influential in project work. One similarity between this result and original work of Herzberg (f) on 1844 events is worth noting. Herzberg’s study shows “Policy & administration” and “relationship with peer” are the largest and smallest hygiene factors respectively. Figure-4 of our study shows exactly the same result in Project work (the happening place).

Figure-7 captures dynamic movement of motivating factors plotted in two dimensional plot area of Project-Line function axis. This plot signifies current matrix structure of projectized E&C organization. All these factors are plotted as per their direct comparison presented in Figure-1. Further, their new position is calculated by adjusting CSR components in indirect arithmetic way. They are marked by suffix”-1”. Fugure-8 is also constructed in same way but for hygiene factors instead of motivating factors. These two figures (figure 7 & 8) clearly show relative movements of motivation-hygiene factors. For example, (related to figure-8), “policy & administration” moves as strong project function influencer towards line function influencer. I have no uniform reasoning of the magnitude of movement but only can note the “movement” which itself is significant to me. Finally, Figure 9a is added for more clarity on the dynamics, opening up the concept of space in lieu of matrix area.

7. Conclusion of result and proposition of lattice organization structure:

Before concluding, let us recapitulate two important apparently disjointed issues stated at the beginning of this article:

i) Inflow and nurturing of future Generation-Y talents.

ii) Working conflict of current matrix organization structure.

To understand the conclusion, readers are requested to imagine the analogy of “snake & ladder” board game. The board is currently formed in two dimensional squares. Motivational factors are the ladder points and hygiene points are snake mouth. With the introduction of CSR function, suddenly the board becomes cube and there are possibilities now to go even into three dimensional spaces.

In my opinion, results are not very conclusive to frame out prescriptive solution which point i) above needs. This is a field of vast study & many complex parameters exist in interlinked manner. But current study can certainly indicate existence of one more dimension to throw some light to resolve point ii). This provides some space to the new generational talents to even out some of the conflicts in matrix structure. I conclude by proposing relevance of three dimensional organization structure, or “lattice organization structure” where the new dimension is “passionate work”. Mental model of concept is presented in Figure-9b.

8. Implication to Business

To summarise, acquiring and nurturing of Generation-Y talents are completely different than past generations. They are tremendously tech-savvy, scheduled, peer oriented yet they want their own space. So, what E&C organizations do not pay much attention today; will suddenly become major issue tomorrow. Hence, organizations should re-design work structure in such a manner that supports passion and interest of generation-Y to retain them. I have used CSR function as one of the avenues which can provide support to passion and interest of Generation-Y. If E&C organizations take up corporate social projects, why not to take up such projects which appeal generation-Y.

References:

a. Engineering, Procurement and Construction (EPC): Driving growth efficiently (2011), Ernst & Young Pvt. Limited. Kolkata. Available in public domain through http://www.ey.com/Publication/vwLUAssets/EPC_Driving_growth_efficiently_Report_FINAL/$FILE/EPC_Driving_growth_efficiently_Report_FINAL.pdf (Accessed on March 5th 2013)

b. Wasting time. (2013).The Economist, May 11th 2013. c. Magnuson, S Debra. Alexander, S Lora. (2008). Work with me. Personal Decision International Corporation, Minneapolis, USA. d. Generation Y and the Workplace Annual Report (2010) Johnson Controls Global WorkPlace Solutions, London. Available in public domain through http://www.johnsoncontrols.in/content/dam/WWW/jci/be/global_workplace_innovation/oxygenz/Oxygenz_Report_-_2010.pdf (Accessed on March 5th 2013). e. DeSouza, Peter Ronald. Kumar, Sanjay. Shastri, Sandeep. (2009). Indian Youth in a Transforming world, attitude & perceptions. SAGE publications India Pvt Ltd. New Delhi. f. Robbins, Stephen P., and Judge Timothy A.(2012). In Essentials of Organisational Behaviour, Motivation I: Basic concepts, 96-113.Edinburgh Gate: Pearson Education Limited.

g. Kapoor, Kritika. ( 2012 ).The desi definition of Gen X, Y, Z . The Times of India. Nov 16th 2012. http://articles.timesofindia.indiatimes.com/2012-11-16/man-woman/32408526_1_generation-definition-grey-area (Accessed on June 3rd 2013).

37.00

42.00

47.00

52.00

57.00

42.00 47.00 52.00 57.00 62.00

Achievement

Recognition

Work itself

Responsibility

Advancement

Growth

Achievement-1

Recognition-1

Work itself-1

Responsibility-1

Advancement-1

Growth-1

Figure 7 : Influence of "passionate work" ( CSR function ) on " Project-Line function matrix" - Motivating factors

Line function

Project function

37.00

42.00

47.00

52.00

57.00

62.00

67.00

37.00 42.00 47.00 52.00 57.00

Policy & administration

Supervision

Relationship with boss

Work condition

Salary

Relationship with Peer

Policy & administration-1

Supervision-1

Relationship with boss-1

Work condition-1

Salary-1

Relationship with Peer-1

Figure 8 : Influence of "passionate work" ( CSR function ) on" Project-Line function matrix" - Hygiene factors

Line function

Project function

Figure 10 : Source , The Economist ( b)

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