Designing Organizations Nancy Truitt Pierce w TELA Program

Designing Organizations Nancy Truitt Pierce w TELA Program w w May 2009 © Woods Creek Consulting, 2009 1

Designing Organizations w The STAR Model w Stage and Strategy w Pivotal Position Theory w Five Structures Application of Various Structures Pros and Cons of Each © Woods Creek Consulting, 2009 2

Star Model by Jay Galbraith © Woods Creek Consulting, 2009 3

Purpose of Structure is about the flow of information and learning And the allocation of time, energy and resources (decisions) needed to achieve the strategy! © Woods Creek Consulting, 2009 4

Organize When you have over 25 people (Scope) w Based on Strategy first w Each type is appropriate for Certain Situations w Each type has Limitations w © Woods Creek Consulting, 2009 5

Strategy What business are you in? w What is your strategy? w What are the keys to your success? w © Woods Creek Consulting, 2009 6

Departmentalization w w w Function or Specialty Product Line Customer Segment Geographical Area Work Flow Process © Woods Creek Consulting, 2009 7

Examples w w w Function or Specialty – The classic organization Product Line – Hewlett Packard (Printer Division) Customer Segment – Boeing (Commercial, Military) Geographical Area – Fed. Ex (Regions) Work Flow Process – Continental Mills (dry goods, frozen foods) © Woods Creek Consulting, 2009 8

Functional Structure Pros w Transfer of Knowledge w Contacts with Peer Specialists w Greater level of Specialization Cons w Doesn’t scale for additional product lines w Inhibits cross functional collaboration © Woods Creek Consulting, 2009 9

Product Structures Pros w Compress Product Development Cycles w Create Diverse Product Strategies Cons w Builds Turf Wars w Decreases Efficiencies in Resource Utilization © Woods Creek Consulting, 2009 10

Market Structures Pros w Increase Market Knowledge (Segments) w Target Product Development Cons w Builds Turf Wars w Decreases Efficiencies in Resource Utilization © Woods Creek Consulting, 2009 11

Geographical Structure Pros w Proximity to Customers w Increased Cost Efficiency for Distribution w Local Knowledge Cons w Creates Communication Challenges w Decreases Efficiencies in Resource Utilization © Woods Creek Consulting, 2009 12

Departmentalization for IT w w w Application Development Telecom Desk Top Help Desk Data Management Outsource Management © Woods Creek Consulting, 2009 13

IT Organizations Ways to Organize the IT Department • • • Functionally By business unit By geo Centralized De-Centralized Matrixed / hybrid © Woods Creek Consulting, 2009 14

Summary There is no perfect organization w No matter what you do, there will be problems w Some work better for your stage, strategy and business w Choose the best and back fill the problems w © Woods Creek Consulting, 2009 15

Group Exercise Share your Org Chart: w w For the company Titles in the boxes (no names necessary) For the IT Org Titles in the boxes and where you are What are the pros and cons of each? What issues are you trying to resolve? What org changes MAY solve those? © Woods Creek Consulting, 2009 16

The Mentors 1. Our Questions w w 2. Their Career Path Insights and tips to get and keep a CIO job How CIO is different from other levels How they spend their time Be thinking of other questions you want them to answer ©Woods Creek Consulting Company, 2009 17

Homework for TELA Prep for Next Week 1. 2. 3. Come up with a real business problem TELA group votes on them Pick the top three to work on Lunch with your team mates w Fill out the interview form Develop your Personal Plan w Based on the 360 Complete the Evaluation for today © Woods Creek Consulting, 2009 18