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Organising and Organisational Design

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					Management
and Organisation




Organising and
Organisational Design

                   Jay Hays
Management
and Organisation



    People need to understand how
    their organisations work if they
    are to work well within them. p 268

    Structures need to adapt to changes
    in the external environment.
Management
and Organisation              Organising

     Success Themes
      Empowerment
      Support for employees
      Customer responsiveness
      Flexibility in dealing with the
       dynamic environment
      Continuous quality improvements
Management
and Organisation                 Organising
     Organising
     Process of arranging people and
     other resources to work together to
     accomplish a goal.

      Division of labour
      Coordinating activities to achieve
       common purpose
      Allocation of resources
      Clarifying jobs and working relationships
Management
and Organisation                 Organising

     Back to Strategy
     Strategy is “the grand plan.”
     It embodies:

      the organisation’s key objectives
      the path or approach taken to achieve
        those objectives
Management
and Organisation             Organising


       Strategic Management
       The process of formulating and
       implementing strategies to
       accomplish long-term goals.
Management
and Organisation               Organising


        Strategic Management

         Looking Forward
         Understanding the environment
         Positioning
Management
and Organisation                Organising


       Strategic Management
       and Positioning
       This is where organising comes in.
Management
and Organisation                Organising


       You organise to meet
       your important ou
       This is where organising comes in.
Management
and Organisation             Organising

         Organisational Structure
         System of

          Tasks
          Workflow
          Relationships
          Communication Channels
                     Peritus Process in Perspective                             Suspend Board                              User

       User
                                                                                                                              User
                                                                                                       Scorecard
                  User                                                                                Actual   Goal

                                                          Dispatch Board
User
                                                                                   Closed Log
                                       Input Log                                                                       PPD

              Dispatcher                                                                                        Plan

                                                                                                                Progress

                                                                                                                Solution
          Pre-Morning                                                                 Driver, Rider
          Negotiations                                  Morning                                       Chessmaster
                                                                                Squads
                                                        Negotiations
                                                                                   Ping Ponging
                           Skills Matrix

                                                                           Learning Plan

                                                                                                      Mini-
                                                                                                      Intervention
                                                   Non-Dispatched Tasks
          Calendar
Management
and Organisation                Organising

         Organisational Chart
         Depicts the formal arrangement
         and reporting relationships of
         the organisation.

          Positions     Lines of Authority
          Job Titles    Lines of
                          Communications
Management
and Organisation                Organising

         Organisational Chart
         Depicts the way the organisation
         is intended to function.

             Levels of Management
             Major Units and Sub-units
Management
and Organisation               Organising

       Informal Structure

       The Shadow Organisation
       The unofficial but critical working
       relationships between people.
        Social Needs
        Performance             interaction
        Informal Learning
Management
and Organisation               Organising

        Organisational Structures
                   -Departmentalism
        The division and linkage of formal
        teams and departments.

         Functional
         Divisional
         Matrix
Management
and Organisation                  Organising

        Functional
         People with similar skills and performing
           similar tasks are grouped.
         Share technical skills, interests, and
           responsibilities.
         If each division does its job properly, the
           organisation will perform successfully.
Management
and Organisation                Organising

      Functional
      All about specialisation and the benefits
      you get from that (i.e., economies of
      scale).
      Promotes “functional mindset” – the
      functional chimney problem (silo
      operation).
Management
and Organisation                 Organising

    Functional Mindset
    Cooperation and communication across
    the organisation break down).
    Impacts ability to effectively solve
    problems and make decisions.
Management
and Organisation                Organising

     Divisional
     Grouping of all people and resources
     devoted to the same / similar product or
     service, set of customers, and / or region.
      Product           Process
      Geographical      Customer
  Management
  and Organisation                     Organising
          Matrix
Product
          Combination of functional and divisional
          structures to gain the advantages and
Project
          overcome the disadvantages of both.
          Basically consists of permanent cross-
Program
          functional teams. Two Bosses – Two Groups

                Functional Structure


          Promotes learning, sharing, and cooperation.
Management
and Organisation               Organising
    Matrix
    Progress toward improving flexibility and
    problem-solving through better cross-
    functional integration.
    Represents a broader movement toward
    more horizontal structures that decrease
    heirarchy, increase empowerment, and
    more fully mobilise the talents of people
    to drive organisational performance. p 276
Management
and Organisation   Organising
    Network
Management
and Organisation       Organising
    Boundaryless Organisation
Management
and Organisation                 Organising
    Trends

     Shorter Chains of Command
     Less Unity of Command
     Wider Spans of Control
     More Delegation and Empowerment
     Decentralisation with Centralisation
     Reduced Use of Staff
Management
and Organisation




   Organisational improvements and
   [Business] Process Re-design or Re-
   engineering are organisational change.

   Thus, may be more complicated than
   many people assume.
Management
and Organisation




     Any change in one part of a system
     (organisation) will effect other parts
     and, in fact, be influenced by those
     other parts.
Management
and Organisation




       INTERDEPENDENCE
Management
and Organisation




     Two Levels of Principles:
       Operating Principles
       Design Principles
  One Approach to Redesigning Processes



                         Iterate and Test



Case
For                                                         Process
Action                     Formulate        Design Future     Model
         Define Vision     Redesign           Process
                             Ideas             Models




    Management
    and Organisation
           Preliminary Research on IT Solution                                                 CRM



                        Executive                Executive                                    Subsequent
Start-Up                                                                      Lab 1
                        Interviews               Workshop                                     Labs                              TO BE



                                            P3

       Start-Up                                          Work                                     Wrap-Up

   Activities                                     Activities                                  Activities
   Introduction to Business Labs                  Review of Progress to Date / Critique of    Finalise / Synthesise Work
   Charter Team                                   Process and Lessons Learned                 Evaluate Product and Process Relative to
   - Membership                                   Agenda and Objectives for the Day           Start-Up Objectives
   - Vision and Mission                           Distribution of Labour / Assignments        Develop “Hand-Off” Package
   - Scope
                                                  Work Individually and/or in Groups (AM)     Develop and Present Summary of Outcomes
   - Key Objectives and Deliverables
   - Team Member Roles & Responsibilities         Mid-Day Check-In                            and Experience of Process
   - Schedule                                     Work Individually and/or in Groups (PM)     Conduct any Required “Hand-Off” Activity
   Team Building / Develop Performance            End of Day Check-In / Evening Assignments   Determine any Continuity Requirements
   Thermometers                                                                               Deliverables
                                                  Deliverables
   Logistics                                                                                  Lab Report - All Documentation
                                                  Detailed Project Plan; Manage to Plan
   Deliverables                                   Posted Process Maps                         Final Presentation to Executive / Program
   Agreed and Published Charter                   Weekly Lab Documentation                    Manager
   Performance Thermometers                                                                   “Hand-Off” Meeting(s) Conducted
                                                  Performance Thermometers Updated
   Presentation to Executive / Program Manager
                                                                                              P3 = People, Parameters, Prerogative
                                 STEERING COMMITTEE


                                 BPR Management Team



                                                                             Formal
      Executive                Lab 1       Lab 2        Lab 3                Review
      Workshop                                                  4
                                                                    5        Process


Agreed-Upon:                                                            Overall Assessment Against
Principles                                                              Initial Objectives
Business Model                         Friday Reviews                   Lessons Learned
Key Processes                                                           Future Requirements
Objectives                                                              Way Forward
Performance Measures
Customer Service Strategies
Critical Success Factors
Considerations
Next Steps / Project Charter
          Future State Description - Proposed


FOXTEL achieves its customer targets yearly from 2001 through
2005. Viewers are delighted with programming and service.
Customer churn is held at world class levels.

FOXTEL is the industry benchmark for cost efficient and service
effective integration of business process and operations.

Staff and managers are proud to be FOXTEL employees. They are
motivated to remain and grow with the Company, and driven to
ensure it continues to succeed. They know what they have to do,
and they have the tools to ensure they do it well.
     High-Level Processes



   Selling Pay TV concept to the general public
   Customer acquisition and installation
   Customer retention and expansion




             A Cross-Functional View
                                    The
                                    Journey
                                    Metaphor


An image-rich aid to help describe and prepare people
to undertake a journey no one has ever made before to
a place no one has ever been.
                              A Metaphor for Change:
               Charting       The Organisational Change Journey
               the Course
                                                  Ports o’ Call
Defining the                 Setting Off          Journey              Arrival!
Destination    Selecting                          Milestones
               Explorers

                            Issues and Challenges
               Preparing
                            Preparing / planning for the unknowable
               Explorers
                            Identifying potential risks and
                            having suitable responses
                                                                      Evaluation
                            Creating a culture of exploring           & Lessons
                            and the explorer mindset                  Learned
                            Keeping in contact with home
                            Keeping the faith; dealing with mutiny
                                                                        Hail and
                                                                        Farewell!
     Exploring Unchartered Territory
Issues and Challenges
Preparing / planning for the unknowable
Identifying potential risks and
having suitable responses
Creating a culture of exploring
and the explorer mindset
Keeping in contact with home
Keeping the faith
Dealing with mutiny
Issues and Challenges
Preparing / planning for the unknowable
Identifying potential risks and           Keeping on Course in Unchartered
having suitable responses                 Territory
Creating a culture of exploring           Agree to and understand the destination and process for
and the explorer mindset                  getting there (framework)
Keeping in contact with home               Vision, Imperative, Objectives
Keeping the faith                          Flexible “roadmap” and experienced guides

Dealing with mutiny                       Know where you are at any given time (measure)
                                           Against vision and milestones (roadmap), risks, CSFs, & KPIs)
                                           Document Progress (Map) and Lessons Learned (ship’s log)

                                          Keep people involved, excited, and “fit” (participation)
                                           Provide the tools, techniques, and skills people need
                                           Empower with authority and legitimacy
                                           Charge with responsibility
                                           Install / use an infrastructure for people “back home”
A Closer Look at the                      2
Exploration Steps            Charting
                             the Course
                     1
    Defining the             Selecting
    Destination              Explorers

                             Preparing
 Context for Change         Explorers
 Vision
       Values
       Principles       High-Level Project Planning Chartering Team
                                                  
 Mission               Understanding Journey RisksBuilding Teamwork
                                                   
 Overall Objectives    Setting Explorer Criteria and
 Readiness Assessment  Selecting Team Members       Exploring Skills
 Approach                                          Establishing Team
 Sponsorship                                      and
                                                      Project
                                                   Infrastructure
A Closer Look at the
Exploration Steps
                    3
      Setting Off
                                    Ports o’ Call 4
                                    Journey
                                    Milestones
 Team Assignments &
  Division of Labour
 Detailed Project Planning      Journaling / Trip Logs
 Send-Off Celebration           Arrival at Journey Milestones or
   Embarking as Sub-Teams        Major Course Correction
 Sub-Team Check-Ins and  Achievement of High-Level
                          Objectives
  Mini Course Corrections
                            and Lessons Learned To Date
 Team Check-Ins
                           Interim Celebration
                                 Re-provisioning and Team
                              Member
                               Rejuvenation
A Closer Look at the
Exploration Steps

    Evaluation
                       Hail and
    & Lessons
    Learned            Farewell!



   Formal Evaluation of Project
    Against Expected Outcomes
   Lessons Learned Studies Conducted
    (Process and Content)
   Evaluation / Lessons Learned Published
    for and Shared with Community
   Determinations made for Continuation
    or Follow-On Expedition
A Closer Look at the Exploration Steps
               5
                    First phase of Exploration
  Arrival!           Complete
                    Report to Community and
                     Celebration of Successful
                     Journey

                      Formal Evaluation of Project
 Evaluation    6       Against Expected Outcomes
 & Lessons            Lessons Learned Studies Conducted
 Learned               (Process and Content)
                      Evaluation / Lessons Learned Published
                       for and Shared with Community
                      Determinations made for Continuation
                       or Follow-On Expedition
               7
   Hail and           Final Team Celebration Honouring Work,
   Farewell!           Coming to Closure, Welcoming New
                       Team Members, and Sending-Off Next Team
Redesign Principles


1.  Organise around outcomes, not tasks        12. Link parallel activities instead of
2.  Put the decision point where the work          integrating the results
    is performed, and build control into the   13. Create electronic linkages
    process                                    14. Substitute information for proximity
3. Replace functions with trust                15. Link supply and demand processes
4. Eliminate intermediaries                        with information technology
5. Eliminate handoffs                          16. Treat geographically dispersed
                                                   resources as though they were
6. Reduce variability of work                      centralised
7. Predict the environment                     17. Have those who use the output of
8. Delay binding                                   the process perform the process
9. Eliminate redundancy                        18. Push out function to customers
10. Segregate, eliminate, reduce               19. Push out function to supplier
    exceptions                                 20. Outsource function
11. Bury information processing in the real    21. Bring function in-house
    work that produces information
                                               22. Form strategic alliances
Using the Redesign Principles



                  • Characteristic reengineering moves for
 What they are      improving process performance
                  • Process design best practice
                  • "Rules of thumb"

                  • Redesign from the outside in – what
How to use them     could be, not what is
                  • Focus on vision performance targets
                  • Prefer cross-functional solutions
                  • Focus on the value-added, not who
                    does what
Redesign principle #1
Organise around outcomes, not tasks


                • What does the outcome consist of?
   Questions
                • Can one person or group perform all or
                  most of the steps in a process?
                • What would we have to do to enable one
                  person or group to perform all or most of
                  the steps in a process?
                • What would it take to produce the desired
                  outcome immediately?

   Redesign
                • Settle auto claims on the spot any time,
 Idea Example     any place, to reduce the human trauma
Redesign principle #2
Put the decision point where the work is
performed, and build control into the process

                    • Where do decisions need to be made in the
   Questions          process? What decision-expertise is required?
                    • What do we fear might go wrong in the process?
                    • What is really important to monitor?
                    • How can controls help make the decision, rather
                      than hinder the process?

    Redesign        • Determine amount of claim at the accident site
  Idea Example      • Elevator predictive of down-time




                                  Otis

                                         Service Crew
Redesign principle #3
Replace functions with trust


                  • What don't we trust about our
   Questions        customers? Our suppliers? Our
                    people?
                  • What work does this cause?
                  • Can we reduce this work and still
                    maintain the integrity of the process?

    Redesign      • Replace forms requiring signatures with
  Idea Example      remote data entry
Redesign principle #4
Eliminate intermediaries

                 • Does this process take more than one
   Questions       person?
                 • What is each person in a process doing?
                 • Can what some people do be eliminated or
                   be done by someone else already in the
                   process?

    Redesign     • Perform on site data entry using portable
  Idea Example     computers




                                                               Avis check
                                                               out clerk
                                               Customer
                                               • Mileage
                                               • Fuel
                                               • Date
Redesign principle #5
Eliminate handoffs

   Questions         • Do we interrupt the process flow to give the
                       output of their work to someone else?
                     • What output is being handed off?
                     • Can we stop this interruption?

    Redesign
                     • Combine data entry with account validation
  Idea Example


                      From                                    To
                      Question

    Answer to
    wrong question
                                                In                           Out



                                                                      Data

                     Long delays
Redesign principle #6
Reduce variability of work


                  • Do we handle a wide variety of work? Do
   Questions        we have to?
                  • Where does similar work go through
                    different processes that then require us to
                    develop exception processes?
                  • Can we eliminate the causes of this
                    variability?
    Redesign
  Idea Example    • Do not accept shipments that do not show
                    up on the purchase order system
Redesign principle #7
Predict the environment

                          • What information will help us better predict what is
   Questions
                            going to happen?
                          • Can we capture it internally?


    Redesign              • Technology notifies service centre to send
  Idea Example              dispatcher before elevator even breaks down




                                                                             Service Centre

           Elevator cab
                                                            Otis

                                                                   Service Crew
Redesign principle #8
Delay binding

                    • How can we respond more quickly to meet
   Questions          customer needs?
                    • At what point of the process does
                      customisation of the product begin?
                    • Can we partially complete the product to
                      that point?
    Redesign
                    • Pre-made sweaters are dyed to order
  Idea Example        based on sales data


                        From                                     To

                 Dye            Knit                  Knit             Dye
                 Wool          Sweater               Sweater          Sweater




                                Distri-                               Distri-
                 Sell                                  Sell
                                bute                                  bute
Redesign principle #9
Eliminate redundancy

                 • Is the same activity being done by different
   Questions       people?
                 • Are people checking other people's work?
                 • Can the activity(ies) be trusted to be done
                   just one time by a single person?

    Redesign
                 • Using bar code readers to track where
  Idea Example     packages are
Redesign principle #10
Segregate, eliminate, reduce exceptions



   Questions     • Does some of the work require extra
                   attention?
                 • What does our process kick out of the
                   normal operation stream?
                 • Can we change the content, timing or
                   quality of the work that comes in?
    Redesign
                 • Raise the value amount of a cheque
  Idea Example     above which a bank clerk must review a
                   signature
Redesign principle #11
Bury information processing in the real work
that produces information

                   • What information do we get? Do we keep?
                     Do we really need?
   Questions
                   • How does information change during the
                     process?
                   • Do we write down what someone says?
                     Why?
                   • Do we type what someone writes down?
                     Why?
                   • Why can't we see what is going on while it
                     is happening?

    Redesign       • Create accident file as part of determining
  Idea Example       amount
Redesign principle #12
Link parallel activities instead
of integrating the results


   Questions          • Do we "stitch" together the results of many
                        people's work with a separate activity?
                      • Can we organise our activities to automate
                        integration?

    Redesign
  Idea Example        • Settle claim, set up car rental, authorise
                        payment and drive the customer home


                          From                                           To


                                                            A        B        D
                 A    B          C          D



                                                                     C
Redesign principle #13
Create electronic linkages



                   • Do we prepare letters, memos or make
   Questions         telephone calls, and then wait for an
                     outsider to respond?
                   • Can we use technology to reduce or
                     eliminate these activities?

    Redesign
                   • Provide customer with terminals to review
  Idea Example       financial accounts
Redesign principle #14
Substitute information for proximity



   Questions       • Do we stop and play telephone tag or
                     convene meetings to resolve something in
                     the process?
                   • Where do we stop and play telephone tag
                     or convene meetings to resolve something
                     in the process?
                   • Can we achieve resolution faster, with
                     better information distribution?
    Redesign
                   • Voice mail systems
  Idea Example
Redesign principle #15
Link supply and demand processes
with information technology


  Questions      • Do the workloads of the processes vary
                   substantially in volume?
                 • At the end of the day, where do we look to
                   see how we have done?
                 • Where are we surprised?
                 • Can we reduce the level of surprise?

   Redesign      • Airline systems that analyse traffic patterns
 Idea Example      to allow overbooking
Redesign principle #16
Treat geographically dispersed resources
as though they were centralised

                  • How many locations are involved? How
   Questions        does information travel?
                  • Can information substitute for proximity?
                  • Do historical assumptions regarding what
                    needs to be done locally still hold?
                  • Do historical assumptions regarding what
                    needs to be done centrally still hold?

   Redesign       • Put the adjuster "on wheels" with mobile
 Idea Example       communications and information systems


                             From                               To
Redesign principle #17
Have those who use the output of the
process perform the process


   Questions     • What outputs are created during the
                   process? Do we need all the outputs?
                 • Who uses them after creation? What do
                   they do with them?
                 • Can these users perform part or all of the
                   process?

    Redesign
                 • Adjuster settles claim at the accident site
  Idea Example




                                                                 Can he
                                                                  do it?
Redesign principle #18
Push out function to customers


                 • What do we get and give to customers in
   Questions       the process?
                 • What tasks would our customer be willing
                   to do?
                 • Can we change the process so the
                   customer sees improved service as a
                   result of the customer doing more?

    Redesign
                 • Use ATMs to reduce clerical staff
  Idea Example
Redesign principle #19
Push out function to suppliers


                   • Do we pay others to help us in the
   Questions         process?
                   • What tasks can we arrange for our
                     suppliers to do?
                   • What tools from our processes do we need
                     to give our suppliers?
                   • Can we use incentives to get suppliers to
                     do more of the processes or supply us
                     better
    Redesign
                   • Have supplier ship directly to factory,
  Idea Example       instead of warehouse
Redesign principle #20
Outsource function


                 • Is there work that requires schedules,
   Questions       expertise, or equipment that is unique in
                   the organisation?
                 • Are there pieces of a process that are
                   performed substantially better by others?
                 • Can we integrate our processes with the
                   best providers in the open market?

    Redesign     • Use printing and mailing companies to
  Idea Example     produce statements
Redesign principle #21
Bring function in-house



   Questions     • Do we pay outsiders?
                 • Where do we rely on outsiders and suffer
                   adversely in terms of cost, time or quality?
                 • Can we stop relying on outsiders and
                   perform activities internally?


    Redesign     • Replace EDP services bureau with an in-
  Idea Example     house function
Redesign principle #22
Form strategic alliances
and virtual organisation

                 • Are there ways to involve other
   Questions       organisations who are not in our business
                   to develop a hybrid process that is good for
                   customers and both parties?
                 • Are there outsiders who can help us
                   operate our processes?
                 • Can we work with outsiders to deliver more
                   value to our customers?
    Redesign
                 • Airlines, hotels, and credit cards link up for
  Idea Example     frequent travellers



                                                                    Hotel


                                                Customer
Part Two
Merging the Explorer
Metaphor and the
Introduction of BPR
                                                                                     Evaluation
            Defining     Planning &         Setting       Ports
                                                                        Arrival          &
           Destination   Preparation          Off         O’Call                   Lessons Learned


                                       Change as a Continuous Journey
OUTCOMES




       Clear                Clear           Clear    Clear Solutions &   Clear        Clear
   Commitment            Framework        Purposeful Solution Progress Completion Recognition and
   and Direction         and Process       Activity                               Acknowledgment



                 A more straight-forward version of the change process as a journey.
                 Shown below each step are the outcomes of the respective steps.
                                                           Charter Team
    Agree
                    Identify      Prioritise       Form               Define
 Objectives
                   Processes     Processes                           End Point
 & Principles                                  Solution Team




                                    Draft                          Revision &
          Install                                Reality
                                   [Ideal]
      Infrastructure                             Check            Formalisation
                                  Process




                        Steps in the BPI /BPR Process




BPI / BPR is also a journey; and may start pretty much the same.
Subsequent steps are more definable than the steps in the general change
journey, each requiring thorough detail and operational understanding.
                                                                                     Evaluation
  Defining         Planning &      Setting         Ports
                                                                       Arrival           &
 Destination       Preparation       Off           O’Call                          Lessons Learned


                                 Change as a Continuous Journey


                                                            Charter Team
    Agree
                    Identify      Prioritise        Form               Define
 Objectives
                   Processes      Processes                           End Point
 & Principles                                   Solution Team




                                     Draft                          Revision &
          Install                                 Reality
                                    [Ideal]
      Infrastructure                              Check            Formalisation
                                   Process




                         Steps in the BPI /BPR Process

When shown together, it is evident that the two journeys have much in common.
                                                                                      Evaluation
 Defining         Planning &      Setting         Ports
                                                                      Arrival                        &
Destination       Preparation       Off           O’Call                          Lessons Learned


                                Change as a Continuous Journey




                                                                                  In either case, the importance of an infrastructure

                                                                                  cannot be stressed highly enough. Infrastructure
                                                           Charter Team




                                                                                  for implementing and seeing change through
   Agree
                   Identify      Prioritise        Form               Define
Objectives
                  Processes      Processes                           End Point




                                                                                  • Measurement and Reporting System
& Principles                                   Solution Team




                                    Draft                          Revision &
         Install                                 Reality




                                                                                  • Project Management
                                   [Ideal]
     Infrastructure                              Check            Formalisation
                                  Process




                                                                                  includes:
                        Steps in the BPI /BPR Process

The arrows superimposed in blue-grey show the more obvious connections.