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Transformation at the IRS

Dennis Campbell

Harvard Business School

September 2009

At most service organizations…

Many organizations attractwhatever customers they can

Resort to product proliferation to satisfy the diverse customer base

And have no clear measure of appropriate fit for employees

No alignment

No focus

Focused Entry

Targets a select group of customers

Designs select set of products/services to satisfy its customer’s needs

Selects a precise group of employees to deliver on the service model

Focused Entry

Targets a select group of customers

Designs select set of products/services to satisfy its customer’s needs

Selects a precise group of employees to deliver on the service model

Alignment

Focus

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Successful Incumbent Response

Service model

Shared services

Human resource processingExecutive trainingFinancePurchasingIT…{economies of scale}{economies of experience}

Multi-Focused Firm

Matching Operational Design with IRS Objectives

Operational Design Objective

Organize customers by segment Reduce complexity

Train specialists Increase quality

Task allocation limited within segment Increase expertise and quality

Use technology to capture customer calls Increase predictability of volume

Simplify forms Decrease mistakes

Train customers Increase satisfaction, decrease calls

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Kotter’s Change Process

Phase One: Getting Started• Create a sense of urgency• Create a vision of what the organization will become• Form a change leadership team

Phase Two: Involving Everyone• Communicate the vision often, in a variety of ways• Empower others to take action on the vision• Inspire and celebrate small wins

Phase Three: Ongoing Improvement• Keep interest and effort on further improvements• Institutionalize new approaches, ensuring current leader’s

replaceabilitySource: John P. Kotter, “Leading Change: Why Transformation Efforts Fail,” Harvard Business Review 73(2) (1995); 59-

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