© 2010 university of southern california ceo center for effective organizations management reset:...
TRANSCRIPT
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Management Reset:Organizing for Sustainable Effectiveness
Christopher G. WorleyUniversity of Southern CaliforniaCenter for Effective Organizations
© 2010 University of Southern Californiaceo
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 – for agility and responsibility.
• To understand the challenges of transitioning to this new logic, we need to explore just a little bit of history
© 2010 University of Southern Californiaceo
Center for Effective Organizations
A History of Organizations and Organization Design in Two Slides
© 2010 University of Southern Californiaceo
Center for Effective Organizations
The first management was a “Perfect Storm”
Technological Change
Changes in Demand
Organization Capability
EfficiencyGrowthWealth
© 2010 University of Southern Californiaceo
Center for Effective Organizations
EffectivenessGrowth
Externalities
Technological Change
Changes in Demand
Organization Capability
The second management fueled the storm… but did not change its character…
© 2010 University of Southern Californiaceo
Center for Effective Organizations
SustainableEffectiveness• 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
© 2010 University of Southern Californiaceo
Center for Effective Organizations
The 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
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Sustainability 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.
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Traditional 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
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Nature 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
Am
ount
of
Cha
nge
Time
Episodic Change
Am
ount
of
Cha
nge
Time
Continuous Change
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Our 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 performance– Buffer the technical core from environmental uncertainty– Moses in the wilderness
• Change Management– Unfreeze, 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 machines– Create a sense of urgency – what’s the “burning platform”?
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Implications 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 ambidexterity• Change = Effectiveness• Stability = Enemy• Performance reflects change pattern• Decision making shared/decentralized• Resources allocated through
accountabilities
Am
ount
of
Cha
nge
Time
Am
ount
of
Cha
nge
Time
Episodic Change Continuous Change
© 2010 University of Southern Californiaceo
Center for Effective Organizations
One 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
© 2010 University of Southern Californiaceo
Center for Effective Organizations
“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
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Which is the more effective organization?
Nokia Loses More Ground to Its Competitors
Wall Street Journal – 1/28/2011
Apple Profit Muscles Past IBMWall Street Journal – 10/18/2010
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Long-term Performance in Telecom
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
-0.2
-0.1
0
0.1
0.2
0.3
Network/Communications ROA Performance
Industry MedianMOTOROLA INCNOKIAAPPLEAT&TRO
A
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Nokia’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 group• Strong sustainability program/reputation• Currently missing in OS, killer apps, and killer devices
© 2010 University of Southern Californiaceo
Center for Effective Organizations
BREADTH
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 “3rd” ecosystem
• Historically passive, pushing for greater speed in relationship with Microsoft
IdentityIntent: Defend the Brand
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Nokia’s Core Logic
Group Executive Board
Corporate Functions
Nokia Research
Center
Mobile Solutions
Mobile Phones
Markets
© 2010 University of Southern Californiaceo
Center for Effective Organizations
Nokia’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
consensus• Implementing
– Twice yearly reviews, a range of rewards, and global leadership development all support flexibility
– A bottoms-up (for local responsiveness) and top-down (for integration) goal setting process that creates tension
© 2010 University of Southern Californiaceo
Center for Effective Organizations
What 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 Transformation
Problems with Changing the Board Changing Identity Lead with the Work System Think Systemically Build in Learning Systems
ceo
Center for Effective Organizations© 2010 University of Southern California
About 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