How to Structure for Strategic Success: Essentials to Effective Organization Design
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1 We create connected companies. How to Structure for Strategic Success: Essentials for Effective Organization Design
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Transcript of How to Structure for Strategic Success: Essentials to Effective Organization Design
1 We create connected companies.
How to Structure for Strategic Success:
Essentials for Effective Organization Design
2 We create connected companies.
1. Introduction
2. 5 Essentials of Effective Organization Design
3. The ArchPoint Organization Design Process
4. Q&A
Outline
3 We create connected companies.
ArchPoint is a boutique professional services company, serving clients across the globe. We leverage world-class capabilities to solve business leaders’ most complex challenges. Our capabilities cover:
• Management Consulting
• Branding
• Integrated Marketing
• Strategic Sourcing
• Supply Chain
• Sales Agency
• Research & Analytics
About ArchPoint
Learn more by visiting
www.archpointgroup.com
or emailing us at
4 We create connected companies.
Meet your presenters
Bob Landis Managing Director, USA
People & Change Leader
5 We create connected companies.
Meet your presenters
Jose Davila Partner, People & Change Practice
6 We create connected companies.
How to Structure for Strategic Success:
Essentials for Effective Organization Design 1. Start with Strategy
2. Define the Capabilities Required to Win
3. Involve Those Who will be Impacted
4. Align Metrics and Rewards
5. Have a Clear Implementation Plan
7 We create connected companies.
Start with Strategy
8 We create connected companies.
• Don’t inhale your own fumes
• Figure out exactly where you are going
• Honestly assess yourself
9 We create connected companies.
• Build a plan – “where to play”
• Align leaders with resources
• Articulate it widely and frequently
10 We create connected companies.
Define the Capabilities Required to Win
11 We create connected companies.
• Build a plan – “how to win”
• Build or buy required capabilities
• Consider both people and processes
12 We create connected companies.
Processes: • What are the core (5 or 6)
processes of the business?
• Where must you be superior to competition?
• Where can you be at parity?
• Where will minimal “compliance” level suffice?
People: • Lack required talent? Build development plan.
• Deploy best talent on most critical processes.
• Reallocate people resources to processes based on
importance assessment.
13 We create connected companies.
Involve Those who will be Impacted
14 We create connected companies.
• Open up the process
• Involve those close to the customer
• Trust the design team
15 We create connected companies.
• Great design teams:
• Include subject matter experts
• Cut across levels
• Involve informal change agents
16 We create connected companies.
Align Metrics
and Rewards
17 We create connected companies.
• Most employees really want to do the right thing
• Metrics should help employees make choices
• Functional metrics sometimes send conflicting messages
18 We create connected companies.
Example: • Sales is incentivized on growth and
sales to new customers
• Operations is incentivized to maximizing
throughput and minimize scrap
• Supply Chain is incentivized on service:
orders on-time and in full
Potential unintended consequences • Sales accepts smaller orders to gain
new customers
• Operations delays production to aggregate
small orders in order to minimize changeovers
• Supply Chain has too little finished
product and shorts a new and
very profitable customer
19 We create connected companies.
Possible solutions: • Set metrics to encourage functions to
communicate and collaborate Sales, Operations and Supply Chain are
measured on a balanced scorecard
• Show each function specifically how to
enhance an enterprise metric
(like operating profit)
• Tell stories about great cross functional
collaboration to reward good behavior
20 We create connected companies.
Have a Clear
Implementation
Program
21 We create connected companies.
The importance of
accountability Survey responses suggest that changes in information flows and decisions rights are twice as powerful as changes in an organization’s motivators or structure.
Average Strength Index Score (out of 100)
Information 54
Decision Rights 50
Motivators 26
Structure 25
Source: Strategy & Analysis
of Org DNA Profiler Survey
22 We create connected companies.
• Align systems and processes to the new structure
• Clarify roles and responsibilities
• Educate the organization
• Engage change agents in communications
23 We create connected companies.
ArchPoint Phases of Organization Design
24 We create connected companies.
ArchPoint Phases of Organization Design
25 We create connected companies.
• Changing structure won’t naturally fix process or people capability issues
• Structure must be an enabler, not an end in and of itself
• All major changes require a change management plan
Recipe for success
© ArchPoint Consulting 2013
