Organization:OverviewofCoreFrameworksLocalTrainingModuleForFirst-yearAssociatesAssociateHandbook
FOREWORDANDOBJECTIVEThisOrganizationPractice(OP)documentprovidesanoverviewforuseinlocaltrainingsessionsforfirst-yearassociates.Itispartofa“seriesonfunctionalareas.”TheobjectiveoftheseriesistointroduceMcKinseypractitionerstothebasicsineachofourfunctionalareasofexpertise.AllthedocumentsintheseriesarecomprehensiveinnatureanddescribethecurrenttoolsandframeworksinthatfunctionalareaAttheendofthisdocument,youcanfindasectiondescribingaselectionofthecoredocumentsandhandbooksthatcangiveyoufurtherdetailsonsomeoftheframeworksdescriedhere.AllofthesedocumentsarenowonPDNet;andhardcopiesofthemcanberequestedfromPDNetExpress,whichwilldeliverthemin24hoursThecontentsofthisdocumenthavebeenadaptedforlocaltrainingsessionsthrough“SwitchingTracks”—OP’sfirst-yearmodulevideotape,whichcommunicatesthebasicconceptsinaconciseandvisualwayusinganactualclient—TheScandinavianRailroadCompany.Itis40minuteslongandshouldbepresentedin3shortsegments.Betweenthesesegments,thefacultymemberrunstheattachedexercises,addsanycommentaryhe/sheconsidersnecessarytoclarifytheconcepts,andprovidespersonalexperienceonselectedtopics.Acopyofthevideotapeandmoderator’sguidewithexercisescanberequestedfromtheFirm
Thisdocumentseekstoanswer4questionsSECTION1Whydoassociatesneedtoconsiderorganizationalissuesineveryengagement?SECTION2Whatframeworksdoweusetohelpourclientsimproveorganizationalperformance?SECTION3Whatroledoesanassociateplayinorganizationwork?SECTION4Wherecananassociatefindoutmore?
McKinsey’smissionistohavelastingandsubstantialimpactonourclients.Tosucceed,weneedtoworkallthreeofthecriticalelements:choosethebeststrategy,developworld-classoperations,aligntheorganization.Thesethreeelementsbothreinforceandconstraineachother.Thebeststrategyisonlyrelevantifitisoperationallyandorganizationallyfeasible.Theoptimalorganizationaldesigndependsuponthestrategicrequirementandtheoperationalmethodsoftheclient.Thisdocumentfocusesononevertexofthistriangularrelationship.Itwouldbewrong,however,tobelievethatyoucanachievetheimpactweseekbyfocusingononevertex.Weneedtoconsiderallthreeineverystudy.
CRITICALELEMENTSFORIMPACTSuccessfulstrategyEfficientoperationsEffectiveorganization
Weonlyachieveimpactwhentheorganizationsweservearesuccessfulinimplementingthestrategiesandoperationalmethodswepropose.However,arecentsurveyofengagementsinwhichclientsfailedtoimplementproposedstrategiesfound,inthreecasesoutoffour,thattheclientorganizationwasnotchange-readyorevencapableofimplementingthestrategyweproposed.Toensurethatwehaveimpact,weneedtoconsiderorganizationalissuesaswedevisestrategies.Wemustchoosestrategiestheclientsarereadyandabletoimplementorcomplementourstrategyworkwithinvestmentinbuildingtheorganization’sskillssothattheorganizationcanstepuptothechallengethesuperiorstrategyposes..
3OUTOF4STRATEGIESTHATFAILDOSOBECAUSEOFTHEORGANIZATION’SINABILITYTOEXECUTE100%=340responsesPercentMcKinseyrecommendationsflawedClientnotchange-readyorcommittedOrganizationlackedthecapabilitiestoexecutestrategyOther
Thedemandfororganizationalworkisincreasing.Trendsinthemarketplaceandtheevolvingnatureofourclientslargelyexplainthisincreaseindemand.Thepaceofchangeinthemarketplaceisaccelerating.Astrategicchoiceoranoperationalinnovationevokesarapidreactionfromcompetitor.Rarelycanadurablecompetitiveadvantagebefoundinthesechoices.Ratheritisthedevelopmentofauniqueorganizationalcapabilitywiththeinherentflexibilityandcommitmenttosustainworld-classperformancethatprovidesdurablecompetitiveadvantageinthesetimesofrapidchange.Theclientsweservearechangingaswell.Theyhaveincreasinglyhiredin-housestrategiccapabilities.MosthavebuiltstrategyshopsclosetotheCEO.Few,however,havethein-housecapabilityandobjectivitytodotheorganizationalworkrequiredtomakechangehappen.
ORGANIZATIONALWORKGROWINGINIMPORTANCEEvolvingmarketplaceQuickeningpaceofstrategicadaptationDurablecompetitiveadvantageoftenrootedinuniqueorganizationalcapabilitiesEvolvingplayersManybusinessesacquiringin-housestrategiccapabilityMakingchangehappenremainsthe“neglectedart”McKinsey’sengagementmixPercentoftimeIncreasingdemandforhelpwithorganizationissuesandchangemanagementCraftingtheanswerHelpingimplementchange10yearsagoTodaySource:Surveyof23MGMsacrosstheFirm
Therecentevolutioninourclientshasnotbeenmissedbyourcompetitors.Eachofourcompetitorshasrecentlyintroducedabrandedorganizationalelementtotheirportfolio.Theirorganizationalexpertisefiguresprominentlyintheirmarketingcampaigns.
COMPETITORSHAVEBRANDEDORGANIZATIONTOOLSConsultingfirmProductClientexampleBCGTime–basedcompetitionGEGeneralSystemsProcessredesignUPRRBoozAllenContinuousimprovementExxonUnitedResearchProcessredesignandfacilitationMobilDeltaPointTransformationalchangeSmithKlineBeecham
McKinsey’sconsultingapproachmustevolveasourclientsevolve.Thesechangesprovokeashiftinthenatureofourworkandanevolutionoftheroleoftheassociateonengagements.Theincreaseddemandfororganizationalworkimpactsassociatesdirectly.Associatesaredrawnintoleadershiprolesonlargerteamsatanearlierpointintheircareers.ThisplacesgreateremphasisontheneedforassociatestodevelopquitesoonafterjoiningMcKinsey-superbteamleadershipskills.
EVOLUTIONINMcKINSEY’SAPPROACH*Surveyof23MGMsacrosstheFirmFrom…To…“Theanswer”Solvingforthe“answer”andthechangeprocessManagingclientteamsBuildingclientcapabilitiesSmall,analyticallyfocusedteams––averageclientteamof3*Multiple,highlyleveragedMcKinsey/clientteams—Averageclientteamof10*CEOcounselingbyseniorpeopleCoachingandfeedbackatalllevels
Beforewediveintotheorganizationmaterials,weshouldannounceonecriticalcaveat:theframeworksyouareabouttoseeareonlyasgoodasthejudgmentandinsightusedtofillthemout.Theframeworksareoftenmerechecklists,usefultoolstoensureyoudonotoverlookakeydimension.TheOPcanprovideinterviewguidesandquestionnairesthatyoucanusetofleshouttheframeworks,aswellasappliedexamplesinarangeofsettings.However,almostallorganizationalissuesare“situationdependent”,andalmostallclientsettingsareunique.Yourjudgment,insight,creativity,andorganizationalacumenwilldeterminewhetheryouaddvalueintheclientsetting.
ACRITICALCAVEAT“Garbagein,garbageout”OrganizationalpracticeframeworksChecklistsSurveys,questionnairesAppliedexamplesGarbageGoodjudgment,keeninsight,creativity,organizationalacumenGarbageClientimpactCONCEPTUAL
Aseriesofframeworksareavailabletohelpclientsidentifyandaddressorganizationallimitsoneffectivenessorobstaclestochange.Theyalsopointtowardsolutions.Theseframeworkshelpteamsanswertwofundamentalquestions:¶Whatchangeisneeded?¶Howshouldtheclientimplementthechange?TheOPhasderivedasetofsixattributesthatcharacterizehigh-performingorganizations(HPO).Byassessingwhetheryourclientorganizationexhibitsthesesixattributes,youcandiagnosewhetheranorganizationalperformancegapexistsaswell.Additionally,the7-Sswillhelpyouidentifystrengthsanddeficienciesintheorganization.The7-Ssfocusteamsonaligningstructure,staff,systems,andstyletopromotebehavioralchangeandbuildskillsinpivotaljobholders.Bycontrastingtherequiredskillset(atboththeorganizationandthepivotaljobholderlevel)withthecurrentskillset,youcanoftenclarifytheorganizationalgapthatexists.Youcompletethediagnosticbyfillingoutthechangeboard.Thatexercisehelpsteamsunderstandtheorganizationalskilldeficitsorresistancetochangesotheycandeliberatelyplantobuildthenecessaryskillsandwillingnesstochangeintheorganization.Oncethegapshavebeenidentified,theteamneedstolayoutachangeprogramtoclosethegaps.Thetransformationtrianglehighlightsthethreecriticaldimensionsofanyeffectivechangeprogram-topdown,bottomup,cross-functional.Theproperbalanceamongthesedimensionsdependsonthegap,theclientsetting,andthecompetitivecontext.Everychangeprogramcontainssomemixofsixfundamentalenergizingelements.Eachmustbeconsideredaswedesignchangeprograms.Thissectionofthehandbookwilldiscusseachframeworkinturn.
COREFRAMEWORKSHigh-performingorganizationattributesVisionPerfor-manceCEOledPeopleSkillsSimple7-SframeworkWinningformulaPivotaljobsDesignleversOrganizationalstructureWhatchangeisneeded?Howshouldtheclientmakechangehappen?Whatgapsinorganizationalperformanceexist?Whatorganizationalchallengesexist?Whatinitiativescomprisethechangeprogram?Howdowecreateenergyforthechangeprogram?StrategySkillsSharedvaluesVISIONStaffManagementsystemsLeadershipstyleChangeboardAgenda/platformDirectionsettingStructuringBottom-upenergizingTransformationtrianglePerformancemanagementVisionandleadershipcommunicationOrganizationalinfrastructurePeopledevelopmentProblemsolvingprocessEnergizingelements
TheOPundertookastudyof10high-performingcompanies,trueindustryleaders,thatweknewverywell.Thecompanieshadsustainedpace-settingperformanceintheirrespectiveindustriesover2decades.These10HPOssharedsixmanagementattributes,eachofwhichfocusesonperformance.BycomparingyourclientorganizationtotheseHPOs,youmayidentifyopportunitiestoimproveyourclientorganization.
“HIGH-PERFORMANCECOMPANY”ATTRIBUTESDrivenbyleadersAlignedbysimplestructuresandcoreprocessesBasedonworld-classskillsRejuvenatedbywell-developedpeoplesystemsBuiltbyrelentlesspursuitofbefore-the-factstrategies/visionEnergizedbyanextraordinarilyintense,performance-drivenenvironmentWhatchangeisneeded?Howshouldtheclientmakechangehappen?OrganizationalchallengesInitiativesEnergizingelementsGapsinperformance
Thefirstthreeofthesixcommonmanagementattributes:¶Drivenbyleaders.Theleadersofthesecompanieshadveryhighperformanceaspirations.Fortheseleaderstherewasnosuchnotionas“goodenough”.Atthecenteroftheseleadershipgroups,weconsistentlyfounddemanding,unreasonableCEOs.¶Builtbyrelentlessbefore-the-factstrategies/visions.HPOsspendtheirtimelookingforward,notback.Theirstrategiesdriverelentlesslyforbothprofitabilityandgrowth.¶Energizedbyanextraordinarilyintense,performance-drivenenvironment.HPOshaveademanding,occasionallypunishing,workpace.Thereisrealaccountability,especiallyatthetop.HPOs,whilebeingverygoodplacestowork,arenotalwaysniceplacestowork.
ATTRIBUTESOFANHPODrivenbyleaderVeryhighperformanceaspirationsheldbyallkeyleadersDemanding,“unreasonable”CEOsEffectiveworkinggroupattopAbilitytopenetratetomicro-leveloftheirbusinessesSingle-mindedadherencetosimple,clearsuccessmeasures-notjustfinancialProductive“fearoffailure”Builtbyrelentlesspursuitofbefore-the-factstrategies/visionHighlymotivating,ifnotinspiring,“end”stateFrequentlyorientedtowardindustryleadershipConsistentlystrivingforbothprofitabilityandgrowthPassionatedefendersofcorebusinessesUnderstandingofhowindustry(s)works,whatcustomerswant,andwhatcompetitorscando-andhowthesemightchangeEnergizedbyanextraordi-narilyintense,performancedrivenenvironmentDemanding,occasionallypunishing,workpace;oncallallthetimeRealfollow-throughonaccountability–especiallyatthetopAggressivelearningfromthingsthatdonotwork“good”placestoworkbutnotalways“nice”PerformanceshortfallschangecareersMembersfeelrewardedbybeingpartofwinninginstitution
Thelastthreecommonmanagementattributesfocusonstructure,skills,andsystems:¶Alignedbysimplestructuresandcoreprocesses.HPOsalignauthority,accountability,andperformancechallenges.Linesofcommunicationandapprovalaresimpleandaremirroredfromonedivisiontothenext.¶Basedonworld-classskills.HPOsareworldclassinatleastonecriticalskilloftheirindustry,e.g.,productdevelopmentinhightechnology,riskmanagementinwholesalebanking,direct-to-storedeliveryinconsumergoods,best-costmanufacturing.Additionally,HPOsexhibitsuperiorprocessmanagementskillsthatinandofthemselvesbecomeasourceofcompetitiveadvantage.¶Rejuvenatedbywell-developedpeoplesystems.TheCEOinthesecompaniesistheChiefPersonnelOfficer.TheCEOinteractsregularlywiththeentireleadershipgroup,understandstheindividualdevelopmentneedsandgoals,andleadsstaffingreviews.
ATTRIBUTESOFANHPO(CONTINUED)AlignedbysimplestructuresandcoreprocessesStraightforwardalignmentofauthority,accountability,andperformancechallengesUncomplicatedlinesofcommunicationandapproval–linetolineSimilarinternalstructuralunitsandkeymanagementprocessesacrossthecompanyMinimalcriticalstaffreviewsRegularcalendarofkeymanagementprocessesandcommunicationBasedonworld-classcompanyskillsDomanythingswell,butatleast1functionalskillatworld-classcompetencelevelunderpinsstrategyAlsofocusonbuildingcorporateskillinthewaytheyruntheplaceCompanykeymanagementprocessesviewedasrealcompetitiveadvantageRejuvenatedbywell-developedpeoplesystemsCEOisChiefPersonnelOfficerClearfocusonperformanceandmotivation–successfullong-termwealth-buildingprogramsseemkeyManagementprocessesensureleadershave“informed”viewofkeycontributors2-3levelsdownCEOleadsannual“staffingreview”–bestpeople/teamsinmostcritical/demandingjobs“Benchstrength”isatoppriority
TheHPOresearchfoundsomethingelsecommontotheHPOs:all10wereexperimentingwithself-governance.Self-governanceintheseHPOsmeansempowermentwithaccountability.TheHPOssharethecommoncharacteristicofinvolving“awiderangeof“or“broadcross-sectionof”employeesindrivingforimprovedperformance.Theirgoalistoimbueeveryemployeewithanowner’smind-set.Self–governanceintheseHPOsisdifferentfromthatpracticedinother“engagedandempowered”companies.InHPOsthesingle-mindedobjectiveofempowermentisperformance.Inthematrixbelow,theHPOswestudiedwereallinthetophalfofthematrix(highperformance);manywerereaching,inaddition,fortheright-handsideofthematrix(engagedandempowered).
PERFORMANCEANDEMPOWERMENTATHPOsHPOsPerformance-focused,top-down-drivenorganizationsPerformance-driven,empowered,andaccountableorganizationsHierarchical,command-andcontrol-oriented,“entitled”organizationsActivity-driven,“engagedandempowered”organizationsCommandandcontrolEngageandempowerHighLowAveragePerformanceManagementapproach
Mostlargecompaniesstartoutinthelowerleft-handcornerofthematrix(lowperformanceandcommand-and-controlmanagementapproach).WediscoveredthatHPOsthathavesuccessfullytransitionedtotheupperright-handcornerhavefirstachievedhighperformanceandthenexperimentedwithandadoptedempowerment.Empowermentwithoutfirstestablishingatrueperformanceethicinthecompanytendstoresultincontinuedlowperformance.Ifyourclientfallsinthelowerleft-handcornerofthismatrix,itneedstoconcentratefirstonbuildingatrueperformanceethic.Empowerment,alone,isunlikelytoyieldperformanceimprovement.
TRANSFORMATIONPATHPathfollowedbyhigh-performancecompaniesPathexperiencedbycompaniesthatfailtoinstillperformanceethicfirstEmersonPepsicoSonocoSunTrustVF3MGEHallmarkJohnson&JohnsonManyhighperfor-mers”onthejourney”MostcompaniesBPFP&LWallaceCommandandcontrolEngageandempowerHighLowAveragePerformanceManagementapproach
Asdiscussedabove,thefirstphaseoftheorganizationdiagnosticidentifiesperformancegaps.Thesecondphasefocusesonidentifyingorganizationalissuesandimpedimentstochange.Theframeworkmostcommonlyusedtoidentifyorganizationalissuesincludessevenbucketsthatstartwith“S”.Strategy.Anintegratedsetofactionsthatdeliverasuperiorvaluetoasetofcustomerswithacoststructureallowingexcellentcontinuingreturns.Institutionalskills.End-resultactivitiesthecompanymustbereallygoodatinordertodeliverthevalueproposition.Sharedvalues.Simple,agreed-uponprinciplesthatsaywhatisimportantaroundhere.Takentogether,thefirst3-Ssdefinethecompany’svision:anoverridinggoalthatpeopleintheorganizationstrivetoachieve;thatischallenging,valuable,andexcitingtothem;andvaluableanddifferentiatedtotheintendedcustomer.Toachievethevision,thecompanymustdesignandalignleverstoguidethebehaviorofthoseholdingpivotaljobsclosetothefrontline–i.e.,thosewhodirectlyaffectdeliveryofvaluetothecustomer.Organizationalstructure.Anorderlyandpredictablesystemtodeterminewhoreportstowhomandhowtasksaredividedupandintegrated.Staff.Thepeopleintheorganizationconsideredintermsoftheircapabilities,experience,andpotential.Managementsystems.Theprocessesandproceduresthroughwhichthingsgetdoneday-to-day.Leadershipstyle.Thewayleadersfocustheirtimeandattentionandthepersonaltonetheyset.
7-SFRAMEWORKWhatchangeisneeded?Howshouldtheclientmakechangehappen?GapsinperformanceOrganizationalchallengesinitiativesOrganizationalchallengesEnergizingelementsWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISION
Attheheartofwemeanbyorganizationalperformanceisa“winningformula”creatingacombinationofstrategy,skills,andsharedvaluestocarryoutanorganizationalpurpose.Whatlinkstheseelementstogether(the“overlap”)istheorganization’svision:Thevisionistheoverridinggoaloftheorganization–theplacewherestrategy,skills,andsharedvaluesintersect.Itisthesingle,noblepurposethatguidesorganizationalprioritiesandgivesmeaningtotheday-to-dayactivityofthestaff.Forexample,McDonald’shasavision-driven“winningformula,”asdescribedbelow.
McDONALD’SWINNINGFORMULAVision:tobecometheleadingrestaurantchainintheworldStrategySharedvaluesSkillsConvenientGoodqualityConsistentFamily-orientedenvironmentFairvalueQualitycontroloverallaspectsofbusinessSuperiorsiteselectionContinuousnewproductdevelopmentStrongpromotionofproductsandMcDonald’simageQualityServiceCleanlinessprice
Organizationsusuallychangeinresponsetodiscontinuities–eitherexternalshocks(suchasderegulation)orinternalchanges(suchasnewleadership)thatmakeitclearthattheold,“grooved”wayofdoingthingsisnolongerwinning.Thesuccessfuloneswillcreateanewwinningformulathatisbasedonchangesinstrategy,newerorstrongerskills,and/orsharedvalues.Contrastingthenewwinningformulatotheoldformulaidentifiesandgaugesthechangethattheorganizationisconsideringanddefinesthevisionforthechangeprogram.Achangevisionisacreedthatsummarizeswhatanorganizationistryingtobecomeandwhy.Assuch,itguidesorganizationalprioritiesbyredefiningandrecombiningbusinessobjectives,requiredinstitutionalskills,andcorporatevaluesaboutwhatisimportantaroundhere.Achangevisionisattheheartoftopmanagement’sroleinimprovingperformanceandisoftenthefirststep.Itprovidesthevitalbridgebetweentheinitialdissatisfactionwiththestatusquoandthefirstpracticalstepstakeninachangeprogram–thearticulationofacleartargetthatrepresentssomethingbetterthatisbothlogicallysoundandemotionallyappealing.
IMPROVINGORGANIZATIONALPERFORMANCEGroovedRedirectedUnfrozenDiscontinuitiesExternalshocksNewcompetitors,economicsNewtechnologiesDeregulationInternalchangesNewaspirationsNewleaderMajorchangethroughpeopleStrategySkillsSharedvaluesVISIONNewstrategyNeworstrongerskillsSharedvaluesCHANGEVISION
Certainkeypeopleintheorganizationholdpositionsthatdeterminesuccessorfailureininstitutinganewstrategy,skill,orsharedvalue.Thesepeoplefillwhatwecallpivotaljobs.Wewillonlysucceedinimplementingthechangevisionifwesucceedinchangingthebehaviorofpivotaljobholders.AtMcDonald’s,forexample,pivotaljobsincludethecentralizedpurchasersofallrawmaterialsforallstores,thestoremanagers,andthehourlyemployeeswhotakeandassembleorders.
PIVOTALJOBS WhatpeoplemustdoWhatarethey?Positionsthathavedirectimpactondeliveryofvaluetothecustomer.Typicallythey-Designtheproduct-Maketheproduct-SelltheproductPositionsthatmustcapablymasternewskillsWherearethey?Closetothefrontline
Inarecentstudyatachainstoreretailer,thechangevisionincludedasignificantimprovementinin-storeconvenience.Twopositionswereidentifiedaspivotaljobs–thestoremanagerandtheareaoperationsmanager.Thisstudyemployedacontrastanalysisintwoforms.Thefirstconsideredeachelementofbehavioranddefinedhowthenewbehaviorwouldneedtodifferfromcurrentpractices.Abehaviorcontrastanalysisoftenproveshelpfulindefiningpreciselyhowthepivotaljob-holdersneedtochange.
CONTRASTANALYSIS Pivotaljobs:storemanager,chainretailerElementsOldbehaviorNewbehaviorUseoftimeSpendmajorityoftimeondailyroutinetasks–unloadingtrucks,stockingshelves,etc.Devotemuchmoreattentiontotraining/coaching,evaluating/experimentingwithpricing,staffing,merchandisingJobobjectiveEnsurethatday-todaystoreoperationsrunsmoothlyManagestoreprofitabilityandimplementationofnewconveniencestrategyCriticalskillsConscientious,responsibleBasicmathandwritingskillsOldskills,plus…GoodinstinctsabouthowtoaffectprofitsLeadershipqualitiesCriteriaTaskcompletionFinancialperformanceOldcriteriaplusaddedemphasison…CustomerserviceInventorymanagementStoreappearance
Thesecondanalysiscontrastedthepercentageoftimespentoncriticaltasksundercurrentpracticesandenvisionedinthefuture.
CONTRASTANALYSISBYPERCENTAGEOFTIMESPENT Pivotaljob:areaoperationsmanager100%CurrentProposedTailorproducts,services,pricing,andpromotiontosegments•Searchfornewbusiness•EvaluatebusinessandcustomerserviceperformanceExpandone-on-onetimewithSMandassociates•Trainandmotivateface-to-faceforcustomerservice,inventorymanagement…•EncourageSMtoinnovateClericalsupportshouldeliminatetasksClericalsupportshouldeliminatetasksShortvendorcontacts•RecruitingSMand•pharmacistDisciplining•Balancinginventory•Follow-upontelephone•messagesInventories•Paperwork•Puttingoutfires•Monitoringcompliance•–Policies–PlanogramsAnsweringsurveys•Fillingoutappraisals•Districtreports•Merchant/ownerCoachPlayerAdmini-straor
The3-Swinningformulasetsthestandards,goals,andmissionoftheorganization.Howdoyougetpeople(particularlypivotaljobholders)toactuallyfollowthosegoals?Whileyoucandictatewhatskillsandsharedvaluesyouwant,theorganizationmustprovideguidance,motivation,andmonitoringtoseethattherightdecisionsaremade.ThisisprovidedthroughtheotherSs–structure,systems,staff,andstyle.Collectivelyknownasthe“designlevers”,eachofthesefourshouldbesetbyconsideringthespecificskillsandsharedvaluesyouwanttoinstillintheorganization’speople–andbalancingthemwithotherdesignsthatmightbesuggestedbyotherspecificskillsandsharedvaluesneeded.¶Structure.Whoreportstowhomandhowtasksarebothdividedupandintegrated.¶Systems.Theprocessesandproceduresthroughwhichthingsgetdonefromdaytoday,includinghiring,compensation,performanceevaluation,promotionspolicy,andtraining.¶Staff.Thepeopleintheorganizationconsideredintermsoftheircapabilities,experience,andpotential.¶Style.Thewaymanagerscollectivelybehavewithrespecttouseoftime,attention,andsymbolicactions.
ORGANIZATIONALDESIGNLEVERSATMcDONALD’SWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISIONCentralizedbuyingtocontrolfatcontentHamburgerUniversitydegreerequiredPromotionfromwithintobuildexperienceRegularinspectionsFranchiseexpansionbasedonhighgradesonpriorinspectionsManyproceduralmechanismsaimedatbuildingemployeeenthusiasmandloyaltyHard-nosed,rigidattitudeonhowtorunthebusiness
Theskillsandsharedvaluesmustbeusedtodetermineneededchangesinorganizationaldesign.Forexample,McDonald’sspecificskillofqualitycontroldrivesmanyorganizationaldesigndecisions.StructureCentralizedbuyingprovidesmorethaneconomicsofpurchasing.Italsohelpsensurethatfatcontentisbetween17.0and20.5percentandensuresthatburgersare100percentbeef.StaffOwner–operatorshavemoresayonqualityofoperationsthanabsenteeinvestor-owners.TrainingatHamburgerUniversityensuresthatmanagersreallyknowhowtomakethefoodright.Itisa$40millionfacility,with750-studentcapacityper2-weeksession,andtranslationboothsforforeignmanagers.Itistheonlyschoolinthefast-foodindustryaccreditedbytheAmericanCouncilofEducation.Promotionfromwithinbuildsexperienceinmeetingcompanystandardsandreinforcessharedvalues.SystemsOperatingsystems,includingjobdescriptionsandperformanceappraisals,ensurethatqualityofoperationsmeetsstandards..Allfranchisesareinspectedonaregularbasis,includinggrades(AthroughF)onQSC.Unlikeotherfranchisesthatgiverightstoterritories,McDonald’sfranchisescannotexpandunlesstheyshowahistoryofhighqualityinoperations.McDonald’sPersonnelActionManualprovidesmangerswithawidearrayofprogramstokeepcrewmembersmotivatedandcommitted.StyleLittletoleranceforvariancefromoperationsstandards,exceptaswell-thought-outimprovements.Noshortcutsallowed.Kroc’sinspections.Beforeenteringafranchisee’soffice,Krocwouldoftenpickupallthetrashwithinatwo-blockradiusofaMcDonald’srestaurantandthendumpitonthefranchisee’sdesktoshowaneedforgreatercleanlinessinMcDonald’svicinity.
ORGANIZATIONALDESIGNLEVERSATMcDONALD’SWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISIONCentralizedbuyingtocontrolfatcontentHamburgerUniversitydegreerequiredPromotionfromwithintobuildexperienceRegularinspectionsFranchiseexpansionbasedonhighgradesonpriorinspectionsManyproceduralmechanismsaimedatbuildingemployeeenthusiasmandloyaltyHard-nosed,rigidattitudeonhowtorunthebusiness
Thedesignleverclientsexercisethemostisprobablystructure.Toooftenwehopethatbytinkeringwithboxesinorganizationalcharts,wecansolveorganizationalproblems.Structureisreallyabouthowtoarrangepeopleandjobsforoptimumperformance.Afewassertionsaboutstructure:Thereisnoonebeststructureforanycompany.Structurechoicesforaclientmaychangeoverafewyears,dependingonexternalenvironment,leaders’strengths,andinternalcapabilities.Structuralchoiceshouldbebasedonthedesiredbehaviorsfortheorganization,whicharebasedonstrategicdirection.
STRUCTURALOPTIONSStrategicdirectionDesiredbehaviorStructuraloptionsGreateruniformityacrosstheorganizationCentralizationSmallspanofcontrol;manylayersFunctionalstructureRapidadaptationtoquicklychangingorcomplexenvironment,orgreaterresponsetomarketDecentralizationFewercorporatestaffFlatstructuresBusinessunitstructuretomatchstrategicdirection(geographic/product/marketsegment)TemporaryteamsacrossproductsorfunctionsRapidtechnologicalinnovationCentralizedtechnicalstaffforeconomiesofknowledgeDecentralizedtaskforceforfocus,InitiativeCostreductionConcentratingstaffonlyatlevelwhereintegrationismostcrucialFlatterstructures;broadspanofcontrol
Thechangeboardframeworkcanbeusefulforunderstandingthecommitmentandabilitytoundertakemajorchange.Foreachmanagementlayerandpivotaljob,itasks:Whoamongtheimportantplayersisabletoperformishis/herpartinprovidingthenewskill?Whatdotheyhaveorlack:Convictionthatthenewskillisimportant?Courage-the“guy”willingnesstodowhateverittakestodevelopnewskills?Individualability–thatis,personalskillsortalents?Organizationsupports–suchasthenecessarysystemsupport?Investingtimeinachangeboardanalysishashelpedanumberofleadershipteamsunderstandthenatureofthecurrentgapandgaininsightintothemosteffectiveskill-buildingprogram
CHANGEBOARDLeadershipgroupofareatobechangedDown-the-linestaffaffected*ExternalConstituencies**Chiefexecutive(orequivalent)Skilltobebuilt*Modifiedasappropriateforcompany**E.g.,customers,suppliers,tradeunionsWhatchangeisneeded?Howshouldtheclientmakechangehappen?GapsinperformanceOrganizationalchallengesinitiativesOrganizationalchallengesEnergizingelementsConvictionCourageCommitmentIndividualabilityOrganizationsupports/obstacleCapabilitytoleveragethecommitment
Specificquestionscanguideyouasyoufilloutthechangeboard.¶WillpeoplehavetoLearnnewskills?Learnnewbehaviors?Reestablishpriorities?Delegate/assumedecisionmakingresponsibility?Buildnewworkingrelationships?Compromiseotheragendas?¶Dopeoplehavethecapacitytomakeallthesechanges?¶Havepeoplehadpositiveornegativeexperienceswithpastchangeefforts?¶Isthechangeconsistentwithexistingculturalnorms?Beliefs/valuesBehaviorsAretailchainprovidedthisexampleofacompletedchangeboard.
CHANGEBOARD–CHAINRETAILEREXAMPLETopmanagement(6)Intellectuallyconvinced,butDistantfromfieldrealitiesLBOpressuresFairtostrongStrong,exceptCOOlacksfieldexperienceHRpositionvacantLittlesupportNoperformancemeasuresonin-storeHistoryoftop-down“customerserviceprogramsOtherOfficers/“owners”Homeoffice(15)Field(8)Lipservice“Makethefielddoitsjob”“H.O.doesnotunderstandwhatitisaskingfor”WeakModerateFairtostrongFairFewsupport“Segmentalist”rivalryamongfunctionsInadequateoperatingsystems“Cando”style(donotadmitweakness)AreaoperationsManagers(125)Suspicious,buteagertobelieveStrongFairtoweakOverloaded:spanofcontrol=60-80Storemanagersandassistants(3,200)Cynical(“yetanotherprogram”)Fair:readytofollowclearordersfromaboveFair:mosttrainedas“taskmasters”“Horizontalpriorities”(unrealisticnumberoftasksassigned)Associates(30,000)Mixed,butmanynaturalsupporters?Surprisinglystrong,onaverageTurnoverincreasing;toofewlaborhoursforfullserviceCourageConvictionCommitmentIndividualabilityOrganizationsupports/obstacleCapabilityDiagnosisDeliveringin-storeconvenience
Acompletedchangeboardoftensuggeststheactionsthatmaybenecessarytobuildthecommitmentandcapabilityrequiredtoimplementchangewithinyourclient’sorganization.Inthechainretailercase,actionsincluded:Lock–insupportCOOas“champion”Full–timechangeleader(facilitator)Lineaccountability3-yearcommitmentCreatesharedresponsibilityforprogressThree“skillteams,”eachheadedbyafield“baron”Districtentrepreneurship:eachdistrictmanagertoexperimentwithtwotothreeinitiativesandthensharelessonsBuildasuccessmodelfrombelowFocusononepilotarea(14stores)Usefull-timetaskforceofhigh-potentialareamanagers(eightmanagers,3-to9-monthtours)“Trained“areamanagersreturntohomedistrictstoleadpilotareaprocessthereForceawarenessofrealitiesQuarterlyworkshopstoassessprogressonskillsCloseobservationofpilotarea(“Ifwecan’tmakeitworkinonearea,there’snopointintalkingaboutcompanywideprograms”)RestructurefieldorganizationStorestaffingstandardsAOMspanofcontrol,supportsNewrecruiting/selectionLinktopharmacystrategy/skillgaps
CHANGEBOARD–CHAINRETAILEREXAMPLETopmanagement(6)OtherOfficers/“owners”Homeoffice(15)Field(8)AreaoperationsManagers(125)Storemanagersandassistants(3,200)Associates(30,000)CourageConvictionCommitmentIndividualabilityOrganizationsupports/obstacleCapabilitytoachievechangeobjectivesStrategyDeliveringin-storeconvenienceLockinsupportCreatesharedresponsibilityforprogressBuildasuccessmodelfrombelowForceawarenessofrealitiesRestructurefieldorganization
Toanswerthequestion,“Howshouldchangehappen?”,theOPdevelopedthe“organizationaltransformationtriangle”thatsummarizesthethreebasicmanagementtaskswhendealingwithchange.Theirrelativeemphasismayvary,butallthreeofthemhavetobemanagedtoachievefundamentalbehavioralchange.
EnergizingelementsWhatchangeisneeded?Howshouldtheclientmakechangehappen?GapsinperformanceOrganizationalchallengesinitiativesEnergizingelementsTRANSFORMATIONTRIANGLE④TopmanagementTop-downdirectionsettingProcessdesign,target,communications,etc.Front-lineperformanceimprovementUnit-by-unit,team-oriented,problemsolvingCross-functionalinitiativesLinkactivitiesandinformationinnewwaysforbreak-throughperformanceOperationsStaffs
Thewell-knownGE“workout!”changeprogramincludedelementsfromeachdimensionofthetransformationtriangle.
GE“WORKOUT!”Top-downdirectionsetting/cultureshapingNo.1orNo.2ineverybusiness“speed,simplicity,self-confidence”DelayeringBestpracticesworkshopsBottom-upperformanceimprovementTownmeetings:2-to5-dayinteractivesessions“Brandname”qualityprocessesOperations:unit-by-unitredesignCoreprocessredesignProjectteamstoidentifycross-functionalissuesProcessmapping
Theclientshouldseekanappropriatebalanceacrossallthreedimensionsofthetransformationtriangle.Overrelianceonanydimensionwillimpedechange.
BALANCEON3DIMENSIONSISKEYRequirementsDimensionPotentialriskfromoverrelianceEnergizingvisionCustomer/shareholder/employeetriadClearperformancetargetsLackofcommitmentConfusionCynicismPerformancewinsRelevantknowledgeandskillbuildingExpansionexpectationUnfocusedeffortsIgnoredorunderminedbymanagementCross-functionalopportunitiesmissedDiscontinuitiesaddressedClearlyunderstoodprocessinstalledOldsystems/structure/processeseliminatedOverlycomplexBeyondexistingskillandcapabilities
TheOPhasdefinedawidearrayofchangeapproaches.Eachchangeapproachstrikesauniquebalanceamongthedimensionsofthetransformationtriangle.Yourchallengeisfindingthechangeapproachthatstrikesthebalanceappropriateforyourclientsituation.
OVERVIEWOF5PERFORMANCECHANGEAPPROACHESABCDEDescriptionStructuredprocess-Drivenproblemsolving(compliance)Empoweredopportunity-driveninnovationValues-drivenadaptiveimprovementCross-functionalprocessredesignTop-down,skill-drivenbuilding/improvementTransforma-tionemphasisExampleTOP/AVABreakthroughTQMCPRCorporateskillteamsWhenappropriateStepchangeneededquicklyEntitledcultureChange-ready,flexibleorganizationApproachingtheoreticallimits;performanceethicandcapabilityinplaceCross-functionalredesignneededNewbasisforcompetitiveadvantageneededTypicalgoals40%ofcompressiblecosts(imposed)Uptoeachteam;typically,stretchtargetsinquality,cost,etc.ContinuousimprovementQuicker,cheaper,betterLastingcompetitiveadvantage
Nomatterwhatchangeprogramisselected,thefollowingsixenergizingelementsshouldbeaddressed.Byaddressingeachone,theclientbuildstheenergyrequiredtomakeorganizationschange.
ENERGIZINGELEMENTSAmbitious,measurableobjectivesReinforcingfeedbackConsequencesWinningformulaWinningleadershipgroupDoer-drivenFact-basedPeople-intensiveNewmind-setNewskills,behaviorSystemsandprocessStructureRolesBuildcommitmentEstablish2-wayflowManageexpectationsInspireactionWhatchangeisneeded?Howshouldtheclientmakechangehappen?GapsinperformanceOrganizationalchallengesinitiativesEnergizingelementsPerformancemeasurementCommunicationsVisionandleadershipProblemsolvingprocessPeopledevelopmentOrganizationalinfrastructure
TheOPhasawealthofexperienceandresearchtosupportthedesignofeachelementofachangeprogram.
WorldbenchmarksProjectperformanceindicatorsframeworkPerformancemapsPerformancecontractsproformaBestpracticeexamplesLeadingforsuccessCEOtime-leveragemanualAnalyticaltoolkitframeworkAnalyticalproblemsolvingworkshop“datatochart”videoandworkbooksClientadvocacyvideosSkill/will/diagnosticContinuousimprovementprinciplesworkshopBestpracticeexamplesCoreprocessredesignExampleroledescription“7-S”checklistCommunicationscoordinationteam-jobspecificationsCommunicationschannelsauditStakeholderanalysisCommunicationsplanCommunicationsworkshopBestpracticeexamplesPOSSIBLEACTIVITIES/TOOLSFrameworkfordesigningskill-buildingprogramsDiscretetrainingmodules—managementskills(MFS),leadershipskills(LFS),buildinghigh-performingteams,projectmanagementguide,designingongoingimprovementDiscretetools—RJDs,time-usagelogs,change-readinesssurveys,signalingchangetoolkit,howtorunatrainingworkshopBeliefs/behavior-promptsheet—staffactivitysurveyBestpracticeexamplesPerformancemeasurementCommunicationsVisionandleadershipProblemsolvingprocessPeopledevelopmentOrganizationalinfrastructure
Apackagingcompanyappliedtheseenergizingelementsastheybuilttheskilltheycalledvalue-basedsystemsselling(VBSS):Withaclearvisionandleadershipsettled,thecompanydecidedonaproblemsolvingprocessthatinvolvedsixmultinationalskillteams,eachwithacredibleleader.Theirperformancemeasureswerenarrowedtotwoaspects:intermsofinput,theymeasuredaccountplanscreatedandnumberofplanscreatedandnumberofpeopletrained;intermsofoutput,theymeasuredpriceandmarketshare.Tocommunicatethemessage,thepresidentembarkedona“roadshow”tomanufacturingandsaleslocations;theseniormanagersattendedworkshops;andanewsletter/bulletinaboutVBSSwasbegun.Theorganizationalinfrastructurewasmodifiedtoestablishaccountteams,globalaccountmanagers,andanaccountplanningfunction.Onthepeopledevelopmentfront,an“actionlearning”programwasbeguntoteachpeoplemoreaboutaccountplanning.AllthesetoolsandactivitieswerefocusedonachievinganewlevelofexcellenceinthecoreskillofVBSSthatthecompanyknewwascriticaltoitsstrategy.
Account-based“actionlearning”programMultinationalskillteamswith6crediblechampionsPiloteffortwithleadershiptogetbuy-inandadviceTheleaderskillforbecoming$1billionPresidentassponsorInputAccountplansPeopletrainedOutputsPriceShareAwarenessbuilding–President’sroadshowSkillbuildingthroughworkshopsReinforcementthroughVBSSnetworkbulletinsAccountteamsGlobalaccountmanagersAccountplanningPerformancemeasurementCommunicationsVisionandleadershipProblemsolvingprocessPeopledevelopmentOrganizationalinfrastructureVBSS
Associateswilloftenstepuptomanagerrolesonengagementsthataddressorganizationissuesand/orimplementchange.Theseengagementsofteninvolvemultipleclientteams.Associatesassumeresponsibilityformanagingoneormoreoftheseclientteams.Theseengagementsalsoseektheactivesupportofabroadersetofclientmanagers.Associatesassumeresponsibilityfordevelopinginfluentialrelationshipswithcriticalclientmanagers.Engagementswhichfocusonorganizationissuesthereforeprovideexceptionalopportunitiesforassociates.
ASSOCIATESASSUMEMANAGERROLESINORGANIZATIONENGAGEMENTSTraditionalviewofteamrolesED/DCSAssociateClientClientteamAssociateEMTeamrolesonorganizationengagementsED/DCSAssociateSr.clientexec.AssociateEMClientmanagerClientmanagerClientteamClientmanagerClientmanagerClientteamClientteamClientteam
Theeffectiveassociatemanagerservesthreefunctions:Theassociatemanagerbuildsandsustainseffectiveclientteamsthatdefine,plan,andimplementthechange.Theassociatemanagerleadsproblemsolvingonmultipleclientteams.Theassociatemanagerforgesaconsensusofsupportforthechangevisionamongcriticalclientmanagersandensuresthatmanagersmaintaintheenergylevelrequiredtoeffectthechange.Allthreefunctionsarecriticaltosuccess.However,inengagementsthataddressorganizationissuesand/orimplementchange,buildingandsustaininganeffectiveteamisoftenthenecessarypreconditiontosuccessintheotherfunctions.Theclientteamprovidesthecriticalinsight,knowledge,andskillsrequiredtosolvetheorganizationalproblem.Theassociate/managerneedstobuildaneffectiveteamenvironmenttotapintotheessentialclientinput.Theclientteamshouldholdtheconfidenceofthecriticalclientmanagers.Oncetheassociatemanagerhasearnedtheendorsementoftheclientteam,thesupportoftheclientmanagerismuchmorelikely.
ClientinvolvementProblemsolvingTeamdynamicsConsensusbuilderChiefengineerFocuserStructurerQualitycontrollerDevil’sadvocateCoachandteamdeveloperMANAGERIALROLES
Sinceeffectiveteamsaresofundamentaltosuccessinorganizationwork,theOPhasinvestedconsiderableeffortinunderstandinghowtobuildhigh-performanceteams.Followtheseprinciplestobuildhigh-performanceteams.PRINCIPLESOFTEAMBASICSDimensionDefinitionMeaningfulpurposeTheteampurposemustInspiretheindividualteammembersJustifytheinvestmentofFirmandclientresources,aswellasthepersonalinvestmentofeachindividualForanengagementteam,thepurposemustincludereferencetosubstantiveandsustainableclientimpactClearperformancegoalsThebestteamstranslatethepurposeintoawell-definedsetoftangibleandmeasurablegoals.ThegoalsencompassWhatwillbeachievedfortheclientintermsofperformanceWhatwillbeachievedfortheteamanditsindividualmembersNearer-termgoals,aswellas“completion-related”goalsWell-definedworkingapproachThebestteamsdecideupfrontandthroughouttheefforthowtoworktogetherday-by-day,andhowindividualteammemberswillapplyanddeveloptheirskillsastheyproducecollectiveresultsaboveandbeyondwhatmembersworkingasindividualscouldproduce.Theirworkingapproachallowssubstantivetimefor“unstructured”creativeteamthinking/brainstormingComplementaryskillsThebestteamsarecomposedofindividualswhoprovideorareexpectedtodevelopthefullrangeanddepthofskillneededtofulfillthepurpose.Skilldevelopmentisseenasakeyrewardforteamparticipation.Thisappliesparticularlytofunctionalskills,butalsotoproblemsolvingskillsandinterpersonalskillsMutualaccountabilityInthebestteams,allteammembersfeelmutuallyaccountableforaccomplishingtheteam’spurposeandperformancegoals.Individualsdonotsucceedorfail–theteamdoesSmallnumbersSuperiorteamperformancecanonlybeachievedbyasmallnumberofpeoplewhocanspendsubstantialtimeworkingtogetherasateam.Agroupofmorethanapproximately15peoplehaslittlechanceofbecomingasuperiorteamTheprinciplesaredescribedmuchmorethoroughlyinTheWisdomofteams,authoredbyJonKatzenbach.
PRINCIPLESOFTEAMBASICSCoachandteamdeveloperSmallnumbersMeaningfulpurposeClearperformancegoalsTEAMBASICSMutualaccountabilityComplementaryskillsWell-definedWorkingapproachSource:TheWisdomofTeams
Ateam’spotentialisdefinedbythequalityofitsmembership.Theassociatemanagershould,wheneverpossible,participateactivelyintheselectionofteammembers.RecentresearchbytheOPhasfoundthatmostsuccessfulchangeprogramsweredrivenbyafewimpassionedleaders.These“realchangeleaders”exhibitacommonsetofcharacteristics.Lookfortheseattributesasyouconsiderwhichclientpeopletoincludeontheteam.
REALCHANGELEADERS“Peoplewithareputationforimprovingperformancethroughpeople–andforexceedingexpectationsalongtheway”*CommitmenttoabetterwayCouragetochallengeexistingpowerbasesPersonalinitiativetogobeyonddefinedboundariesMotivationofthemselvesandothersCaringabouthowpeoplearetreatedandenabledtoperformStayingundercoverAsenseofhumoraboutthemselvesandtheirsituations*RealChangeLeaders
.Oncetheassociatemanagerhasassembledtherightteamandbuiltaneffectiveteamenvironment,solvingtheproblemshouldbeeasier.Theprinciplesofgoodproblemsolvingdonotchangeforengagementsthataddressorganizationissuesand/orimplementchange.Thewaytheassociateparticipatesdoeschange,however.HereareafewrecurrentthemestakenfrominterviewswithassociatesaftertheirfirstorganizationengagementLettheteamsolvetheproblem.Youwon’thavetimetosolvetheproblemyourselfwhenyouhavemultipleteamstomanage.Moreimportantly,theteamwillfeelmoreownershipforthesolutionifyouletthemsolvetheproblem.Teamsshouldbeproductive.Focustheteamonactionandwork.Definespecificendproducts.Ifyouhaveassembledtherightteam,everymemberhasanimportantpartoftheanswer.Engagetheentireteaminsolvingtheproblem.Everyteammembershouldhaveachallengepieceoftheproblem.Meetingsarenecessaryevilforeffectiveteams.Keepthemtoaminimum.Preparemeetingscarefullysothattheyareaconstructiveuseofteamtime.Listen.Especiallyonorganizationproblems,theclientoftenknowstheanswerbutneedshelprecognizingit.
SOLVINGTHEPROBLEMChiefengineerFocuserStructurerQualitycontrollerDevil’sadvocateStructuretheproblem,thenlettheteamsolveitFocustheteamonactionandwork–notprocess,talk,andreviewKeeptheentireteamengagedPreparebrief,high–impactmeetingsListen
Ifyouhavetheconsensusoftheteam,itshouldbeeasiertosustainthesupportofcriticalclientmanagers.Afewbasicprinciplesmeritemphasis:Youneedtobeginbuildingcredibilitywithclientmanagersearlyinthestudy.Talktothemearlyandoften.Engagethenindefiningtheissuesandprioritizingthework.Thisensuresthattheirissueswillbeaddressed.Managershavespecificinterestsandmotivations;theseinterestsexplainmuchoftheirbehavior.Youwillbemoreeffectiveatinfluencingmanagersifyouspendafewmomentstryingtounderstandtheirinterests.Beforeeachdiscussion,considerhowyourrecommendationsimpacttheclientmanager’sinterests.Whenissuesorconcernsbecomeapparent,addressthemsquarely.Thereislittlevalueinavoidingandissue;itwillcomeouteventually.Manyissuesevaporatewhenexplicitlydiscussed.Manyotherscanberesolvedbyspecificanalysis.Issuesthatpersistneedtobefactoredintotheteam’sthinking.Wheneverappropriate,includekeyteammembersinimportantdiscussionswithcriticalclientmanagers.Thenclientmanagerwillgettoknowtheteammembersbetterandplacemoretrustintheiradvice.Whenyouincludeteammembers,theclientmanagercansensefirst-handthestrengthoftheteamconsensus.Asanaddedbenefit,teammembersappreciatetheopportunitytointeractwithmanagers,andtheycanhelpyouinterprettheclientmanager’sfeedback.Goodwrittenmaterialsarealwaysusefulinclientmanagerdiscussions.Preparingthemforcestheteamtoexplicitlyagreeonthecontent.Afterpresentationtheyserveasasolidrecordofwhatwassaid.Theopportunitytointeractwithclientmanagersinoneofthemoreattractiveelementsoforganizationwork.Associatescanusethisinteractiontodevelopclientrelationshipskillsthatwillbevitalintheyearsahead.
BUILDINGCONSENSUSTalktocriticalmanagersearlyandoftenUnderstandthemotivationsofthecriticalmanagersAddressissuesandconcernsdirectlyIncludekeyteammembersinimportantdiscussionsPrepareclear,concisewrittenmaterialsConsensusbuilder
Wehopethatyoutakeawayfourmajorpointsfromthissession:Performanceisthepointofourconsultingwork,whichinvolvesanintegrationofstrategyandorganization.Inevitably,attheheartofallourworkischange.Andattheheartofchangeisarespectforandunderstandingofpeople.Tounderstandorganizationperformanceandbringaboutlastingchange,itisasimportanttoproblemsolveforhow(theengagementprocess)aswhat(theengagementissues).Organizationworkprovidesassociatesanopportunitytostretchtheirpeople-managementskillsearly.
WHATWEHOPEYOUTAKEFROMTHISDOCUMENTWinningperformanceisbasedontheintegrationofstrategyandorganizationRespectforandunderstandingofpeopleisattheheartofallchangeProblemsolvingforprocessisasimportantasproblemsolvingforissuesAssociateshaveasignificantandrewardingroletoplayinorganizationwork
WHERECANANASSOCIATEFINDOUTMORE SelectedcoredocumentsandhandbooksTheoverviewofcoreofframeworksinSections1and2ofthisdocumentdescribesthebasicsandprovidesatemplatetobetterunderstandclientorganizationissues,whichshouldprovehelpfulinalmostanyengagementbecausenomatterwhatthefocusofanengagementis,abasicunderstandingoftheprocessofchangeisnecessarytofocusontheprioritiesoftheclientOnceyouareassignedtoanengagementofthiskind,youmayneedtoreadmoreaboutsomeoftheseframeworksorgatherhandbooksaboutthetopic.Asyoumayknow,PDNetcontainsalargearrayofdocumentsthatmaybeusefultoyou.Youcangethardcopiesofsuchdocumentsin24hoursusing“PDNetExpress”throughyourlocallibraryHowever,therearethousandsofdocumentsintheFirm’sdatabases;therefore,thekeyforefficientdatagatheringand“gettingsmartfast”willbetoaccessonlyalimitedandtargetedselectionofdocumentswhenyouneedthem.Thissectionprovidesyouwithsomehintsonkey,coredocumentsoftheorganizationpracticeandrelateddisciplines
AppendixThisappendixcontains:HPObulletinsGlossaryof7-SframeworkOrganizationtransformationtriangleEnergizingelements
GLOSSARYOF7-SFRAMEWORKWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISIONCentralizedbuyingtocontrolfatcontentHamburgerUniversitydegreerequiredPromotionfromwithintobuildexperienceRegularinspectionsFranchiseexpansionbasedonhighgradesonpriorinspectionsManyproceduralmechanismsaimedatbuildingemployeeenthusiasmandloyaltyHard-nosed,rigidattitudeonhowtorunthebusiness
STRATEGYWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISIONWhatisit?AnintegratedsetofactionstodeliverasuperiorvaluetoasetofcustomerswithacoststructureallowingcontinuingexcellentreturnsWhatisitimportant?GivesdirectionandpurposetoorganizationactivitiesStronglyinfluenceswhatskillstheorganizationneeds,whatvaluesarestressed,andhowitshouldbedesignedProvidesbenchmarkformeasuringorganization’ssuccessandredirectingitsactivitiesWhatmustIknowaboutit?BalancebetweenstrategicthinkingandcapabilitytoexecuteoftenunmanagedStrategyformulationmustconsiderthecomplexitiesofexternalenvironment(e.g.,discontinuitiesgaining)balancedwithinternalhistoryandcapabilitiesIncreasingly,superbperformersfrequentlywinnotby“inventingitfirst”,butbydoingitbestInhighlyuncertainenvironments,institutionalskillsmayhelpdictatestrategy
INSTITUTIONALSKILLSWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISIONWhattheyare?End–resultactivitiesthecompanymustbereallygoodatinordertodeliverthevaluepropositionWhyaretheyimportant?Tohelppeoplefocusonthe2-4skillscriticaltodeliveryofthevaluepropositionTheydriveorganizationdesign–otherorganizationelementsmustbedesignedtobuildneededskillsWhatmustIknowaboutthem?Institutionalskillsareorganizationcapabilities,notjustabilitiesofmanagersorotherstaffStrategyworkisincompletewithoutexplicitconsiderationoftheinstitutionalskillsrequiredtoexecutethestrategyInstitutionalskillsincreasinglyaretheprimarybasisforachievingsustainablecompetitiveadvantage
SHAREDVALUESWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISIONWhattheyare?Simpletermsthatsay,“Whatisimportantaroundhere?“Whyaretheyimportant?ProvidemeanstoachievevaluepropositionthroughAspirations,pride,emotion,andenergyFocus,guidance,andlearningorientationSolutionspace/tiebreakersWhatmustIknowaboutthem?SharedvaluesareprobablythehardestStoinfluenceButignoreatyourperil.AnystrategyconsistentwithdeeplygroovedsharedvalueswillneverbeimplementedTheleadershipteammustarticulate,believein,andbecredibleonsharedvaluesSharedvaluesareshapedbyobsessive,persistentcommunicationfromleaders
VISIONWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISIONWhatisit?Anoverridinggoalthatpeopleintheorganizationstrivetoachieve;thatischallenging,valuable,andexcitingtothem;andvaluableanddifferentiatedtotheintendedcustomerWhyisitimportant?“Strategyandtacticsareforthebattlefield,butthebattlemustbefoughtforapurposeofvaluetosociety”GenichiKawakami,YamahaCorporationProvidesmeaning,motivation,andsourceofpridetoattractandretaincustomersandableemployeesHelpsdrivelong-termstrategyformulationanddevelopmentofneededskillsandvaluesSuppliescourageinthefaceoftheunknownbyprovidingsenseofstabilityandenduringthemesGuidesandinspiresdailybehavior,reducingneedforbureaucraticrulesandsystemsWhatmustIknowaboutit?LeadermustsetandlivebyvisionforittopermeateinstitutionBestvisionsaresimple,easy-to-understand,anddemandnothingshortoflong-termexcellenceFinancialgoals(e.g.,increaseSOM,increaseshareholderwealth)arenotvisions;theydonotexcitetheorganization’speopleorprovideenoughcompetitivedifferentiationtoserveasstandardforbehaviorVisionisextremelydifficulttochangesignificantlywithoutcreatingdiscontent,reducedeffectiveness,andevenabandonmentofinstitutionbyitsbestpeopleandcustomersHowever,visionscanandmustbeconstantlychallengedandchangedatthemargintoadjustfortheinstitution’schangingenvironment
PIVOTALJOBSWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISIONWhatisit?Positions,closetothefrontline,thathavedirectimpactondeliveryofvaluetothecustomer(e.g.,thosewhodesigntheproduct,maketheproduct,andselltheproduct)Whyisitimportant?SuccessfulimplementationofanychangehingesuponthepivotaljobholdersacquiringnewskillsThinkingaboutthenewskillsthesepivotaljobholdersmustacquirepushesthedepthandrigorofourthinkingWhatmustIknowaboutit?RelationshipbetweenmicroskillsofpivotaljobsandmacroskillsoftheorganizationContrastanalysiscomparesmicroskillsrequiredafteramajorchangeprogramtothosecurrentlyrequiredintheorganizationReverse-engineertheorganizationaldesign–startwiththeresultsyouexpect;identifythebehavioralchangeneededtoachievethoseresults;thenshapethe“otherSs”toinfluencepivotaljobholderstoperformasrequired
STRUCTUREWhatisit?AnorderlyandpredictablesystemtodeterminewhoreportstowhomandhowtasksaredividedupandintegratedWhyisitimportant?FacilitatescoordinationandintegrationSymbolizesprioritiesFocusesorganizationattentionWhatmustIknowaboutit?DesignshouldsupportneededskillsandsharedvaluesStructureismostpowerfultoolforenergizingchangeStructuringisnotsimpleKeystructuralissuesincludeTypesofstructureSpanofcontrolCentralizationvs.decentralizationWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISION
STAFFWhatisit?Thepeopleintheorganizationconsideredintermsoftheircapabilities,experience,andpotentialWhyisitimportant?StaffcompositionandproductivityareimportantdeterminantsofcurrentandfuturestrategicsuccessThepeoplewhomakeandselltheproduct/servicecollectivelydetermineiftheclientdeliverssuperiorvalueWhatmustIknowaboutit?Front-linepositionsrequiredetailedattentiontospecificskillsandsharedvaluesKeyissuescanincludewhotohire,howtotrainandcoachthem,howtomotivateandrewardthem,andwhatinformationtogivethemSupportpositionsmustreflecttheneedsofthefront-linepeopleWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISION
SYSTEMSWhatisit?TheprocessesandproceduresthroughwhichthingsgetdonefromdaytodayWhyisitimportant?MostimportanttoolforCommandingattentionInfluencingbehaviorIndicatinghowthingsreallyworkhereWhatmustIknowaboutit?BestcompaniesemployrelativelyfewandsimplesystemsTheyshouldbeshapedonaregularbasisImportanttypesincludeManagementinformationsystems(MIS)IncentivesystemsPlanningSystemstogetrightinformationinthehandsoftherightpeopleareincreasinglyimportantWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISION
STYLEWhatisit?Thewaypeoplefocustheirtimeandattention.TherearetowtypesPersonaltone(e.g.,supportiveness,argumentativeness)Howpeoplespendtime,whatquestionstheyask,settingstheyappearinWhyisitimportant?ThekeyleverinshapingvaluesandreinforcingstrategyWhatmustIknowaboutit?WhatpeopledomeansmorethanwhattheysayThebestleadersusestyletoemphasizeafewsimplevaluesWhilepersonaltoneishardtochange,managerscanmoreeasilyadapthowtheyspendtime,questionstheyask,andsettingstheyappearinWinningformulaPivotaljobsDesignleversOrganizationalstructureManagementsystemsLeadershipstyleStaffStrategySkillsSharedvaluesVISION
