Christopher G Worley University of Southern California Center for Effective Organizations Where am I going this morning To explore an organization design logic that responds to the traditional forces of technological change workforce shifts and globalization but also to a new set of forces ID: 781690
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Slide1
Management Reset:Organizing for Sustainable Effectiveness
Christopher G. Worley
University of Southern California
Center for Effective Organizations
Slide2Where am I going this morning?To explore an organization design logic that responds to the traditional forces of technological change, workforce shifts, and globalization, but also to a new set of forces – for agility and responsibility.
To understand the challenges of transitioning to this new logic, we need to explore just a little bit of history
Slide3A History of Organizations and Organization Design in Two Slides
Slide4The first management was a “Perfect Storm”
Technological Change
Changes in Demand
Organization Capability
Efficiency
Growth
Wealth
Slide5Effectiveness
Growth
Externalities
Technological Change
Changes in Demand
Organization Capability
The
second management fueled the storm…
but did not change its
character…
Slide6Sustainable
Effectiveness
Financial Results
Ecological Health
Social Integrity
Drivers of Agility
Drivers of Responsibility
The third management represents a very different design challenge
Technological Change
Changes in Demand
Organization Capability
Slide7The Four “Ways” of An Agile,Sustainable Management Organization
The way work is organized
…employ a
“maximum surface area”
structure, a
flexible resource
allocation system,
transparent
information, and a
dynamic work system
The way behavior is guided
…leverage a
shared leadership philosophy and a remodeled board of directors
The way talent is treated
…focus on human capital
development
and
flexible reward
systems
The way value is created
…utilize a differentiated
future focus
,
a
sustainability-friendly identity,
and a
robust strategic
intent
Slide8Sustainability is a Dynamic Capability…
Sustainable Strategies
Testing
Implementing
Perceiving
…that
enables
timely and effective
organization changes in response to internal and external environmental changes. It yields consistently above average levels of
sustainable effectiveness
.
Slide9Traditional View of Strategy, Organization, and Performance
The more clear, focused, and committed a strategy is…
…the more dedicated, resourced, and aligned its organization design…
…the higher its financial performance
Slide10Nature of Episodic vs. Continuous Change
Relatively long periods of stability are punctuated by short bursts of transformational change
Relatively higher levels of change over long periods of time
Amount of Change
Time
Episodic Change
Amount of Change
Time
Continuous Change
Slide11Our core management messages have always supported stability as the path to performance
Strategy
Sustainable
competitive advantages
Organization Design
Stamp out feelings and pursue bureaucratic perfection
Figure out how to
reduce variation
– uncertainty is bad
Alignment, congruence, and fit are the keys to performanceBuffer the technical core from environmental uncertainty
Moses in the wildernessChange ManagementUnfreeze, move, refreeze (Lewin and
Kotter)Inertia is a powerful organization condition – resistance must be “overcome”Reengineering as the last great attempt to treat organizations like machinesCreate a sense of urgency – what’s the “burning platform”?
Slide12Implications of Episodic vs. Continuous Change
Change capability lacking – rented when needed
Focus on efficiency over innovation
Stability = Effectiveness
Change = Enemy
Performance reflects change pattern
Decision making centralized
Resources allocated through budgets
Change capability embedded in organization design
Focus on ambidexterityChange = EffectivenessStability = EnemyPerformance reflects change pattern
Decision making shared/decentralizedResources allocated through accountabilities
Amount of ChangeTime
Amount of Change
Time
Episodic Change
Continuous Change
Slide13One more thing…Growth is commitment and stability cloaked in the language of change and agility
Growth is low pervasiveness, low depth change
Growth hides waste
Growth is rooted in assumptions of population growth, but not sustainable
Aggressive growth as an identity contributes to cycles of boom and bust
Aggressive
growth has its place and role, but its not sustainable
Slide14“Shareholders are due a
fair return
, not the absolutely best return.”
William Weldon,
CEO J&J
“In exchange for permission to pursue profits, business must behave and act in ways that protect and enhance the world we live in.
You cannot just look at the bottom line
.”
Kenneth
Chenault
, CEO
American Express
Slide15Which is the more effective organization?
Nokia Loses More Ground to Its Competitors
Wall Street Journal – 1/28/2011
Apple Profit Muscles Past IBM
Wall Street Journal – 10/18/2010
Slide16Long-term Performance in Telecom
Slide17Nokia’s Sustainable Strategy
Identity: Connecting People
Strategic Intent (~2008):
Breadth
High number of markets served
High in range of mobile devices and related services offered
Aggressiveness
Low “in your face” factor
Differentiation
Strong R&D groupStrong sustainability program/reputation
Currently missing in OS, killer apps, and killer devices
Slide18BREADTH
AGGRESSIVENESS
DIFFERENTIATION
Nokia’s Current Strategic Intent
Leverage historical breadth but focus on North American market
Narrow product and service offerings in short term
Maintain social and environmental orientation
Leverage brand recognition to create “3
rd
” ecosystem
Historically passive, pushing for greater speed in relationship with Microsoft
Identity
Intent: Defend the Brand
Slide19Nokia’s Core Logic
Group Executive Board
Corporate Functions
Nokia Research Center
Mobile Solutions
Mobile Phones
Markets
Slide20Nokia’s Agility Routines
Perceiving
Strong future focus (medium and long term) built into Nokia Research Center
All parts of Nokia’s structure are tied into different external environments
Testing
Innovation flow built into NRC and core structure (“no ‘green’ phones”)
Transparent
decision making process built on debate
and
consensusImplementingTwice yearly reviews, a range of rewards, and global leadership development all support flexibilityA bottoms-up (for local responsiveness) and top-down (for integration) goal setting process that creates
tension
Slide21What the Nokia Case Teaches Us about the Transforming to Sustainable Designs
Resolving the Dilemmas of Path Dependency
Strategy Dilemma
Measures of Effectiveness
Intent and Sustainability
Knowledge and Awareness Dilemma
Sustainable
Management is not Just About
“Green” Programs
Skills and Knowledge
The Capabilities Dilemma
Managing the TransformationProblems with Changing the Board
Changing IdentityLead with the Work SystemThink Systemically
Build in Learning Systems
Slide22About the Center for Effective Organizations
Since its founding in 1979, the Center for Effective Organizations (CEO) has conducted cutting-edge research on a broad range of organizational effectiveness issues. As the leading university-based action-research center, CEO has influenced how organizations are managed and made important contributions to academic research and theory. CEO's pioneering research in organization design and effectiveness has earned it an international reputation for research that bridges the gap between academic theory and management practice.
Visit our website at:
http://ceo.usc.edu