How to Structure for Strategic Success: Essentials to Effective Organization Design

1 We create connected companies.

How to Structure for Strategic Success:

Essentials for Effective Organization Design

2 We create connected companies.

1. Introduction

2. 5 Essentials of Effective Organization Design

3. The ArchPoint Organization Design Process

4. Q&A

Outline

3 We create connected companies.

ArchPoint is a boutique professional services company, serving clients across the globe. We leverage world-class capabilities to solve business leaders’ most complex challenges. Our capabilities cover:

• Management Consulting

• Branding

• Integrated Marketing

• Strategic Sourcing

• Supply Chain

• Sales Agency

• Research & Analytics

About ArchPoint

Learn more by visiting

www.archpointgroup.com

or emailing us at

contactus@archpointgroup.com.

4 We create connected companies.

Meet your presenters

Bob Landis Managing Director, USA

People & Change Leader

bob.landis@archpointgroup.com

5 We create connected companies.

Meet your presenters

Jose Davila Partner, People & Change Practice

jose.davila@archpointgroup.com

6 We create connected companies.

How to Structure for Strategic Success:

Essentials for Effective Organization Design 1. Start with Strategy

2. Define the Capabilities Required to Win

3. Involve Those Who will be Impacted

4. Align Metrics and Rewards

5. Have a Clear Implementation Plan

7 We create connected companies.

Start with Strategy

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• Don’t inhale your own fumes

• Figure out exactly where you are going

• Honestly assess yourself

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• Build a plan – “where to play”

• Align leaders with resources

• Articulate it widely and frequently

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Define the Capabilities Required to Win

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• Build a plan – “how to win”

• Build or buy required capabilities

• Consider both people and processes

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Processes: • What are the core (5 or 6)

processes of the business?

• Where must you be superior to competition?

• Where can you be at parity?

• Where will minimal “compliance” level suffice?

People: • Lack required talent? Build development plan.

• Deploy best talent on most critical processes.

• Reallocate people resources to processes based on

importance assessment.

13 We create connected companies.

Involve Those who will be Impacted

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• Open up the process

• Involve those close to the customer

• Trust the design team

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• Great design teams:

• Include subject matter experts

• Cut across levels

• Involve informal change agents

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Align Metrics

and Rewards

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• Most employees really want to do the right thing

• Metrics should help employees make choices

• Functional metrics sometimes send conflicting messages

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Example: • Sales is incentivized on growth and

sales to new customers

• Operations is incentivized to maximizing

throughput and minimize scrap

• Supply Chain is incentivized on service:

orders on-time and in full

Potential unintended consequences • Sales accepts smaller orders to gain

new customers

• Operations delays production to aggregate

small orders in order to minimize changeovers

• Supply Chain has too little finished

product and shorts a new and

very profitable customer

19 We create connected companies.

Possible solutions: • Set metrics to encourage functions to

communicate and collaborate Sales, Operations and Supply Chain are

measured on a balanced scorecard

• Show each function specifically how to

enhance an enterprise metric

(like operating profit)

• Tell stories about great cross functional

collaboration to reward good behavior

20 We create connected companies.

Have a Clear

Implementation

Program

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The importance of

accountability Survey responses suggest that changes in information flows and decisions rights are twice as powerful as changes in an organization’s motivators or structure.

Average Strength Index Score (out of 100)

Information 54

Decision Rights 50

Motivators 26

Structure 25

Source: Strategy & Analysis

of Org DNA Profiler Survey

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• Align systems and processes to the new structure

• Clarify roles and responsibilities

• Educate the organization

• Engage change agents in communications

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ArchPoint Phases of Organization Design

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ArchPoint Phases of Organization Design

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• Changing structure won’t naturally fix process or people capability issues

• Structure must be an enabler, not an end in and of itself

• All major changes require a change management plan

Recipe for success

26 We create connected companies.

Thank you for attending!

Get in touch at contactus@archpointgroup.com.

© ArchPoint Consulting 2013