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© 2012 Chevron
Organization Design at Chevron:
A Strategic Alignment Process
© 2012 Chevron
Organization Design – What is the value add?
3
Improved Business Results
The bottom line is continuous improvement of
organizational performance.
We enable results through 1) alignment of processes, resources, structure,
Organizational Capability and leadership with strategy; and 2) clarification of
interfaces and roles & responsibilities.
Everyone is staffed up to „run‟ the organization; but there is little time,
bandwidth, or deep experience to drive change.
We provide a proven methodology and experience driving strategic projects.
The project team benefits from a real-time project, facilitated to focus learning
on decision quality, CSOC priming behaviors, and action learning.
Change Leadership
Learning
© 2012 Chevron
Organization Design – A Strategic Alignment Process
4
20%
40%
40%
Structure Process Behavior
Our ultimate objective
is achieving predictable, sustainable results.
We enable results through
1) alignment of processes, resources,
and Organizational Capability, and
leadership with strategy.
2) clarification of interfaces, roles &
responsibilities; and
Organization Design is more than just
structure.
© 2010 Chevron
Star Model* Mapped to Project Management
Framework by Phase
5
Phase 1
Identify and Assess
Opportunities
Strategic Validation
Assess As-Is Organization
Goals:
• Assemble Project Team
• Clarify sponsorship
• Identify stakeholders
• Clearly frame opportunity
• Assess as-is organization for
ability to deliver on strategy
• Develop a compelling
business case
• Define types of needed
change and interventions
Agree on Project Scope and
Design Criteria
If structure change is one of
the appropriate interventions,
continue through this process
Phase 2
Generate
& Select Alternative(s)
Design
Macro Structure
Goals:
• Complete a review of core
processes that deliver on the
value drivers
• Define types of work within
each of the core processes
• Generate organization
structure alternatives, select
preferred alternatives
• Create draft communication
and engagement plan
Agree on macro design
structure
Sometimes also called ‘high
level architecture’
Phase 3
Develop Preferred
Alternative(s)
Design
Micro Structure
Goals:
• Define detailed structure,
number of positions
• Update role & responsibilities
• Develop position descriptions;
define grade levels
• Create or plan adjustments to
governance, processes, and
systems
• Create transition plan.
• Deploy communication and
engagement plan
Agree on micro structure,
changes in governance,
processes and systems and
on transition plan
Transition the
Organization
Goals:
• Build change skills for
leaders
• Select / deselect personnel
• Implement needed changes
in governance, processes,
systems
• Support personnel transition
• Continue deploying
communication and
engagement plan
• Develop sustainability plan
Phase 4
Implement
New organization in place
Phase 5
Operate &
Evaluate
Seek Additional
Synergy Capture
Goals:
• Strengthen leadership
and teambuilding skills
• Rally personnel around
the new direction
• Assess the extent to
which the organization
design achieves the
goals; adjust, as needed
• Share lessons learned
Seek additional
opportunities to capture
synergies
Strategy Processes,
Structure
Structure,
People Practices,
Culture
People Practices,
Culture
*Adapted from Jay Galbraith
© 2010 Chevron
Table Top Discussion
# Question
1. What are the value drivers in your business/organization?
2. What does your organization have to deliver to be considered a success?
3. What business problem are you trying to solve?
4. What are the 3-7 high level processes that deliver on your value drivers?
5. What are the activities, roles & responsibilities that make up these processes?
6. To what extent does your current organization design support these processes?
7. What is working in your current organization and would be good to preserve?
8. What is not working in your current organization?
9. What are your suggestions for change?
10. What are the potential solution sets for your list of critical issues?
(These alternatives are not limited to structural changes – remember 40/40/20)
11. With whom must you engage to ensure ownership of the new organization?
12. How do skill sets/behaviors/rewards align with the new organization?
6 Total Remuneration – Organization Design Toolkit
© 2012 Chevron
Approach to Organization Design at Chevron
Case Study 1
© 2010 Chevron
Program of Service Summary – Key Changes
Asset Development
8
Activity 2014
Trend Commentary
2017
Trend Commentary
• Evolve ADPs
from annual
updates to live-
active “war
maps”,
“schedules” and
“forecasts”
Increase • AD has tended to be viewed as
the “owner” of the ADP and thus
responsible
Decrease
• Deliver the SPO production curves and
expectations through an integrated
strategy and schedule
• Decrease - ADPs owned by all functional
groups. Reported thru AIS and
executed thru schedules
• Build the drill and
workover queue
Increase • We must keep rate and reserves
up while we transform the
business through executable
plans
Increase • We want to be 12 months in front of
every rig line and have living wellbore
utility diagrams for all fields. Executing a
deliberate plan.
• Production
Forecasts
Flat • Move from AMT to AIS Decrease • AIS will be the numeric characterization
and forecast for every field
• IOR/EOR Increase • Dump floods Increase • Large reservoirs under IOR will be
analysed for EOR and implemented
• Reserves Flat • Keep reserves compliant Flat • Keep reserves compliant
• Tier 2-3 Increase • Transition and oversee 3rd
handling of Tier 2-3 disposition
including drills, workovers and
sales
0 • Tier 2-3 exit the portfolio – all employees
working Tier 1
© 2010 Chevron
Service Delivery and Governance Tool
9
Activity Strategic or
Transactional?
Current Delivery
Local/Regional/
Enterprise?
Future
Delivery?
Governance
Local/Regional/
Enterprise?
• Evolve ADPs from
annual updates to
live-active “war
maps”, “schedules”
and “forecasts”
Strategic
Regional
Regional
Regional
• Build the drill and
workover queue Strategic Regional Regional Regional
• Production
Forecasts Strategic Regional Regional Regional
• IOR/EOR Strategic Local Local Local
• Reserves Transactional Regional Regional Enterprise
• Tier 2-3 Transactional Local Local Regional
© 2010 Chevron
“White Space” Exercise
10
Current Alternative 1
© 2010 Chevron
Current Organization
5
D&C
Advisor
Sr. D&C
Consultant
Deepwater
Team
Engineering Mgr
Shelf West
Engineering Mgr
Shelf East
Sr. D&C
Operations Mgr
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
• D&C core processes
and standards
(RUMS, MOC, well
design stds, KM
Team.
• BP/LL/Tech id and
sharing
• UDG well planning
and prep work
• Overall D&C plans for
UDG Plan.
• SEMS.
• Regulatory/permit
issues
• All D&C support for
DW assets that use
floating rigs Op and
Non-Op except for
exploration wells
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• All D&C
operations/execution
Cased Hole, D&C,
both Shelf and
Operated
• Daily Operational
Oversight
Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles
• SQM
• OE Audit
• COPs
• SOPs
• L&D
• Perf Mgmt Team
• Joint Industry
Engagement
• EMNetwork
• Technology Ldrshp
• Svc Provider
Engagement (re:
technology)
• Influence NOJV
• Complex well
• Sr Lvl Tech Consult
• External BU advisor
• Advisor to PGPA
• BOEMR
• API JI Task Force
• Peer Review
• Interface w/DWEP
• Prof Engineering
Certification
• Influence NOJV
• Complex well
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• PMP responsibility for
all Supts
• Handles all
experienced hire for
WSMs/DSMs
• PDC Issues
• Hurricane Evac Team
• Well control Team
• Source control Team
• GU D&C Ops Mgr role
• D&C Contract LT
• HES/IFO Sessions
• OELIS Leadership
Sessions
• Primary reporter II&R
• Contractor Safety
Rating
• OE Responsibility
© 2010 Chevron
Current Organization
5
D&C
Advisor
Sr. D&C
Consultant
Deepwater
Team
Engineering Mgr
Shelf West
Engineering Mgr
Shelf East
Sr. D&C
Operations Mgr
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
• D&C core processes
and standards
(RUMS, MOC, well
design stds, KM
Team.
• BP/LL/Tech id and
sharing
• UDG well planning
and prep work
• Overall D&C plans for
UDG Plan.
• SEMS.
• Regulatory/permit
issues
• All D&C support for
DW assets that use
floating rigs Op and
Non-Op except for
exploration wells
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• All D&C
operations/execution
Cased Hole, D&C,
both Shelf and
Operated
• Daily Operational
Oversight
Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles
• SQM
• OE Audit
• COPs
• SOPs
• L&D
• Perf Mgmt Team
• Joint Industry
Engagement
• EMNetwork
• Technology Ldrshp
• Svc Provider
Engagement (re:
technology)
• Influence NOJV
• Complex well
• Sr Lvl Tech Consult
• External BU advisor
• Advisor to PGPA
• BOEMR
• API JI Task Force
• Peer Review
• Interface w/DWEP
• Prof Engineering
Certification
• Influence NOJV
• Complex well
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• PMP responsibility for
all Supts
• Handles all
experienced hire for
WSMs/DSMs
• PDC Issues
• Hurricane Evac Team
• Well control Team
• Source control Team
• GU D&C Ops Mgr role
• D&C Contract LT
• HES/IFO Sessions
• OELIS Leadership
Sessions
• Primary reporter II&R
• Contractor Safety
Rating
• OE Responsibility
Current Alternative 2
© 2010 Chevron
Current Organization
5
D&C
Advisor
Sr. D&C
Consultant
Deepwater
Team
Engineering Mgr
Shelf West
Engineering Mgr
Shelf East
Sr. D&C
Operations Mgr
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
• D&C core processes
and standards
(RUMS, MOC, well
design stds, KM
Team.
• BP/LL/Tech id and
sharing
• UDG well planning
and prep work
• Overall D&C plans for
UDG Plan.
• SEMS.
• Regulatory/permit
issues
• All D&C support for
DW assets that use
floating rigs Op and
Non-Op except for
exploration wells
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• All D&C
operations/execution
Cased Hole, D&C,
both Shelf and
Operated
• Daily Operational
Oversight
Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles
• SQM
• OE Audit
• COPs
• SOPs
• L&D
• Perf Mgmt Team
• Joint Industry
Engagement
• EMNetwork
• Technology Ldrshp
• Svc Provider
Engagement (re:
technology)
• Influence NOJV
• Complex well
• Sr Lvl Tech Consult
• External BU advisor
• Advisor to PGPA
• BOEMR
• API JI Task Force
• Peer Review
• Interface w/DWEP
• Prof Engineering
Certification
• Influence NOJV
• Complex well
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• PMP responsibility for
all Supts
• Handles all
experienced hire for
WSMs/DSMs
• PDC Issues
• Hurricane Evac Team
• Well control Team
• Source control Team
• GU D&C Ops Mgr role
• D&C Contract LT
• HES/IFO Sessions
• OELIS Leadership
Sessions
• Primary reporter II&R
• Contractor Safety
Rating
• OE Responsibility
© 2010 Chevron
Current Organization
5
D&C
Advisor
Sr. D&C
Consultant
Deepwater
Team
Engineering Mgr
Shelf West
Engineering Mgr
Shelf East
Sr. D&C
Operations Mgr
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
• D&C core processes
and standards
(RUMS, MOC, well
design stds, KM
Team.
• BP/LL/Tech id and
sharing
• UDG well planning
and prep work
• Overall D&C plans for
UDG Plan.
• SEMS.
• Regulatory/permit
issues
• All D&C support for
DW assets that use
floating rigs Op and
Non-Op except for
exploration wells
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• All D&C
operations/execution
Cased Hole, D&C,
both Shelf and
Operated
• Daily Operational
Oversight
Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles
• SQM
• OE Audit
• COPs
• SOPs
• L&D
• Perf Mgmt Team
• Joint Industry
Engagement
• EMNetwork
• Technology Ldrshp
• Svc Provider
Engagement (re:
technology)
• Influence NOJV
• Complex well
• Sr Lvl Tech Consult
• External BU advisor
• Advisor to PGPA
• BOEMR
• API JI Task Force
• Peer Review
• Interface w/DWEP
• Prof Engineering
Certification
• Influence NOJV
• Complex well
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• PMP responsibility for
all Supts
• Handles all
experienced hire for
WSMs/DSMs
• PDC Issues
• Hurricane Evac Team
• Well control Team
• Source control Team
• GU D&C Ops Mgr role
• D&C Contract LT
• HES/IFO Sessions
• OELIS Leadership
Sessions
• Primary reporter II&R
• Contractor Safety
Rating
• OE Responsibility
Current Alternative 3
© 2010 Chevron
Current Organization
5
D&C
Advisor
Sr. D&C
Consultant
Deepwater
Team
Engineering Mgr
Shelf West
Engineering Mgr
Shelf East
Sr. D&C
Operations Mgr
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
• D&C core processes
and standards
(RUMS, MOC, well
design stds, KM
Team.
• BP/LL/Tech id and
sharing
• UDG well planning
and prep work
• Overall D&C plans for
UDG Plan.
• SEMS.
• Regulatory/permit
issues
• All D&C support for
DW assets that use
floating rigs Op and
Non-Op except for
exploration wells
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• All D&C
operations/execution
Cased Hole, D&C,
both Shelf and
Operated
• Daily Operational
Oversight
Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles
• SQM
• OE Audit
• COPs
• SOPs
• L&D
• Perf Mgmt Team
• Joint Industry
Engagement
• EMNetwork
• Technology Ldrshp
• Svc Provider
Engagement (re:
technology)
• Influence NOJV
• Complex well
• Sr Lvl Tech Consult
• External BU advisor
• Advisor to PGPA
• BOEMR
• API JI Task Force
• Peer Review
• Interface w/DWEP
• Prof Engineering
Certification
• Influence NOJV
• Complex well
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• PMP responsibility for
all Supts
• Handles all
experienced hire for
WSMs/DSMs
• PDC Issues
• Hurricane Evac Team
• Well control Team
• Source control Team
• GU D&C Ops Mgr role
• D&C Contract LT
• HES/IFO Sessions
• OELIS Leadership
Sessions
• Primary reporter II&R
• Contractor Safety
Rating
• OE Responsibility
© 2010 Chevron
Current Organization
5
D&C
Advisor
Sr. D&C
Consultant
Deepwater
Team
Engineering Mgr
Shelf West
Engineering Mgr
Shelf East
Sr. D&C
Operations Mgr
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
• D&C core processes
and standards
(RUMS, MOC, well
design stds, KM
Team.
• BP/LL/Tech id and
sharing
• UDG well planning
and prep work
• Overall D&C plans for
UDG Plan.
• SEMS.
• Regulatory/permit
issues
• All D&C support for
DW assets that use
floating rigs Op and
Non-Op except for
exploration wells
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• All D&C
operations/execution
Cased Hole, D&C,
both Shelf and
Operated
• Daily Operational
Oversight
Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles
• SQM
• OE Audit
• COPs
• SOPs
• L&D
• Perf Mgmt Team
• Joint Industry
Engagement
• EMNetwork
• Technology Ldrshp
• Svc Provider
Engagement (re:
technology)
• Influence NOJV
• Complex well
• Sr Lvl Tech Consult
• External BU advisor
• Advisor to PGPA
• BOEMR
• API JI Task Force
• Peer Review
• Interface w/DWEP
• Prof Engineering
Certification
• Influence NOJV
• Complex well
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• PMP responsibility for
all Supts
• Handles all
experienced hire for
WSMs/DSMs
• PDC Issues
• Hurricane Evac Team
• Well control Team
• Source control Team
• GU D&C Ops Mgr role
• D&C Contract LT
• HES/IFO Sessions
• OELIS Leadership
Sessions
• Primary reporter II&R
• Contractor Safety
Rating
• OE Responsibility
© 2010 Chevron
Current Organization
6
D&C
Advisor
Sr. D&C
Consultant
Deepwater
Team
Engineering Mgr
Shelf West
Engineering Mgr
Shelf East
Sr. D&C
Operations Mgr
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
Core Job
Responsibilities
• D&C core processes
and standards
(RUMS, MOC, well
design stds, KM
Team.
• BP/LL/Tech id and
sharing
• UDG well planning
and prep work
• Overall D&C plans for
UDG Plan.
• SEMS.
• Regulatory/permit
issues
• All D&C support for
DW assets that use
floating rigs Op and
Non-Op except for
exploration wells
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• Well planning and
maturation of Shelf rig
lines in the West; Well
queue building
• All D&C
operations/execution
Cased Hole, D&C,
both Shelf and
Operated
• Daily Operational
Oversight
Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles Additional Roles
• SQM
• OE Audit
• COPs
• SOPs
• L&D
• Perf Mgmt Team
• Joint Industry
Engagement
• EMNetwork
• Technology Ldrshp
• Svc Provider
Engagement (re:
technology)
• Influence NOJV
• Complex well
• Sr Lvl Tech Consult
• External BU advisor
• Advisor to PGPA
• BOEMR
• API JI Task Force
• Peer Review
• Interface w/DWEP
• Prof Engineering
Certification
• Influence NOJV
• Complex well
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• DRB for CAPEX well
program
• Rig scheduling
• Perf Plan Process
• Lookbacks
• Campus Hires
• Intern program
• PMP for all D&C
engineers
• Manage engineering
resources (Peer
Review reqests, etc)
• Second assignment
Horizons
• PMP responsibility for
all Supts
• Handles all
experienced hire for
WSMs/DSMs
• PDC Issues
• Hurricane Evac Team
• Well control Team
• Source control Team
• GU D&C Ops Mgr role
• D&C Contract LT
• HES/IFO Sessions
• OELIS Leadership
Sessions
• Primary reporter II&R
• Contractor Safety
Rating
• OE Responsibility
Current
1 Validate the activity
analysis by position for
the current organization
2 Map roles, responsibilities
and activities from the
current organization
to each alternative
DELIVERABLE: FROM EACH
PROJECT TEAM MEMBER
• Validated list of roles, responsibilities
and activities, by position, of the
current organization.
DELIVERABLE: FROM EACH
PROJECT TEAM MEMBER
• 3 Copies of Current roles and
responsibilities, with items that don’t map
to alternative highlighted.
• 3 Alternatives with roles, responsibilities
mapped by position.
© 2010 Chevron
Dual Reporting Relationships
Function Operations/Asset
“HOW” guidelines “WHAT” and “WHEN” direction
Standards & Procedures Project assignments
Training & Development , mentor selection Scheduling
Chevron Development Plan Priorities
PDC representation Input on development needs, mentor
PMP Input to PMP (endorses)
Salary Action Input to salary action (endorses)
HR Administration
11
Advisor
Engineer
Superintendent Regular communication
& alignment
© 2012 Chevron
Approach to Organization Design at Chevron
Exercises
© 2010 Chevron
The Star Model
13
Strategy
Vision, direction, short-
and long-term goals.
The cornerstone of
organization design
Structure
Power and authority.
Reporting relationships.
Organizational roles.
Processes
Lateral and vertical capability.
Interpersonal and
technological networks.
Matrix relationships.
Integrative roles.
Reward Systems
Goals, scorecards and
metrics.
Values and behaviors.
Compensation and
rewards.
People Practices
Staffing and selection.
Performance feedback.
Learning and
development.
The Star Model and Organizational Design Any organization consists of Strategy, Structure, Processes, Reward Systems and People Practices. All are interlinked. Altering one element, such as Structure, may require other elements to change. The Star Model illustrates what Organizational Design is all about:
Organizational Design is the alignment of Structure, Processes, and People to enable the company to pursue its chosen Strategy. Organizational Design is not just about Structure!
*Adapted from Jay Galbraith
© 2010 Chevron
Using the Star Model as a Diagnostic Tool - Exercise
14
Strategy
Vision, direction, short-
and long-term goals.
The cornerstone of
organization design
Structure
Power and authority.
Reporting relationships.
Organizational roles.
Processes
Lateral capability.
Interpersonal and
technological networks.
Matrix relationships.
Integrative roles.
Reward Systems
Goals, scorecards and
metrics.
Values and behaviors.
Compensation and
rewards.
People Practices
Staffing and selection.
Performance feedback.
Learning and
development.
Refer to your hand-out: „Using the Star Model as a Diagnostic Tool‟
Turn to Page 3 and answer the following question on Strategy (either individually or in your table team)
Think about the goals and strategy for your Company, Business Unit or Department
Has this strategy changed recently? If so, have other elements of the Star Model changed to enable
the strategy to be achieved?
*Adapted from Jay Galbraith
© 2010 Chevron
Using the Star Model as a Diagnostic Tool - Exercise
15
Strategy
Vision, direction, short-
and long-term goals.
The cornerstone of
organization design
Structure
Power and authority.
Reporting relationships.
Organizational roles.
Processes
Lateral capability.
Interpersonal and
technological networks.
Matrix relationships.
Integrative roles.
Reward Systems
Goals, scorecards and
metrics.
Values and behaviors.
Compensation and
rewards.
People Practices
Staffing and selection.
Performance feedback.
Learning and
development.
Refer to your hand-out: „Using the Star Model as a Diagnostic Tool‟
Turn to Page 4 and answer the following question on Structure (either individually or in your table
team)
How does the current structure help or prevent delivery of your strategy?
*Adapted from Jay Galbraith
© 2010 Chevron
Using the Star Model as a Diagnostic Tool - Exercise
16
Strategy
Vision, direction, short-
and long-term goals.
The cornerstone of
organization design
Structure
Power and authority.
Reporting relationships.
Organizational roles.
Processes
Lateral capability.
Interpersonal and
technological networks.
Matrix relationships.
Integrative roles.
Reward Systems
Goals, scorecards and
metrics.
Values and behaviors.
Compensation and
rewards.
People Practices
Staffing and selection.
Performance feedback.
Learning and
development.
Refer to your hand-out: „Using the Star Model as a Diagnostic Tool‟
Turn to Page 5 and answer the following question on Work Processes (either individually or in
your table team)
Which major work processes currently work well (are well integrated) and which need to be
improved?
*Adapted from Jay Galbraith
© 2010 Chevron
Using the Star Model as a Diagnostic Tool - Exercise
17
Strategy
Vision, direction, short-
and long-term goals.
The cornerstone of
organization design
Structure
Power and authority.
Reporting relationships.
Organizational roles.
Processes
Lateral capability.
Interpersonal and
technological networks.
Matrix relationships.
Integrative roles.
Reward Systems
Goals, scorecards and
metrics.
Values and behaviors.
Compensation and
rewards.
People Practices
Staffing and selection.
Performance feedback.
Learning and
development.
Refer to your hand-out: „Using the Star Model as a Diagnostic Tool‟
Turn to Page 7 and answer the following question on Reward Systems (either individually or in your table team)
Does the reward system motivate and reward individual, team, business unit and corporate performance?
If the strategy of the organization changes, are your rewards flexible enough to encourage new behaviors or do they
continue to encourage the „old way of doing things‟?
*Adapted from Jay Galbraith
© 2010 Chevron
Using the Star Model as a Diagnostic Tool - Exercise
18
Strategy
Vision, direction, short-
and long-term goals.
The cornerstone of
organization design
Structure
Power and authority.
Reporting relationships.
Organizational roles.
Processes
Lateral capability.
Interpersonal and
technological networks.
Matrix relationships.
Integrative roles.
Reward Systems
Goals, scorecards and
metrics.
Values and behaviors.
Compensation and
rewards.
People Practices
Staffing and selection.
Performance feedback.
Learning and
development.
Refer to your hand-out: „Using the Star Model as a Diagnostic Tool‟
Turn to Page 8 and answer the following question on People Practices (either individually or in
your table team)
Have the competencies that are required in your industry changed? If so, have the human
resources practices of the organization kept pace?
*Adapted from Jay Galbraith
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