Current Topics in Organization Design
Teleconference
Hosted by
Center for Effective Organizations
For Internal Sponsor Company Use Only.
© 2002 Center for Effective Organizations, University of Southern California
AGENDA
Current Topics in Organizational Design
Jay Galbraith, Senior Research Scientist, CEO
Sue Mohrman, Senior Research Scientist, CEO
Stu Winby, Director of Business Transformation Services, Hewlett-Packard Company
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Introduction (Stu Winby)
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Basic Framework (Jay Galbraith)
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Design for Solutions/Designing Around the Customer (Jay Galbraith)
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Design for Speed and Flexibility (Jay Galbraith)
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Audience Questions
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Design to Derive Competitive Advantage from Knowledge (Sue Mohrman)
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Organization and Work Design—High Performance Requires Getting
Them Both Right (Sue Mohrman)
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Implementing Organization Designs: Leadership and Learning (Sue Mohrman)
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The Role of HR in Organization Design (panel)
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Audience Questions
© 2002 Center for Effective Organizations, University of Southern California
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Organization Design Research Topics At
The Center For Effective Organizations
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The Lateral Organization
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Team-Based Organizations
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Global Organization
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Designing Around the Customer—The Front Back Organization
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Design for Solutions
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Designing for Reconfigurability
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Design for Virtual Work
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Design for Knowledge
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The Corporate Center
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Support Functions
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Designing the Human Resource Function
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Designing Business Units
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Implementing Organizational Designs
© 2002 Center for Effective Organizations, University of Southern California
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The Star Model
S trat egy
S tr u ct ur e
P e o pl e
R e w ard s
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n
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Pr o c e s s e s
Different Strategies = Different Organizations
Organization is More than Structure
Alignment = Effectiveness
© 2002 Center for Effective Organizations, University of Southern California
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Example — Scale & Scope
Type
Sun
Best Buy
1. Stand Alone
Product
1. Desktop Computer
1. Television Set
2. Bundle
2. Several desktops linked
by an Ethernet and
installed as a Local Area
Network (LAN)
2. Digital TV set, satellite
connection, a
subscription service for
all NFL games and home
installation
3. Turnkey Lite
3. Computer Aided Design
(CAD) solution desktops,
server, LAN connected to
server, CAD software,
installation and
maintenance contract
3. Turnkey home office with
hardware, software,
connections, financing
and installation
X. Turnkey Mega
X. Connected trading rooms
for Misubishi at all six
trading sites worldwide.
Turnkey solution plus
ongoing service.
© 2002 Center for Effective Organizations, University of Southern California
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Solutions Organization Design
S trat egy
§ GAMs, PMs
§ Business generalists
§ Networkers
§ Solutions
§ Scale & Scope
§ Component Integration
P e o pl e
R e w ard s
S tr u ct ur e
Pr o c e s s e s
§ One company
§ Market rates
© 2002 Center for Effective Organizations, University of Southern California
§ Customer/Product
§ Solutions unit
§ Solutions councils
§ Product/Customer/Geography P&Ls
§ Strategic planning
§ Product portfolio
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Structure
Internally
Flexible resource units
Professional services
Business development
Quick response units
Reserves
Leveraging talent
Regional pools
Limiting skill
Get more
Rank the talent, focus on the
critical
Early entry, check points
Move work to the skills
Externally
Partners
Partner hubs
Partner community
Recruit and select
Certify — brand (SunTone)
Build relations — conferences,
trade shows, summits
Manage relations — process
commissions
© 2002 Center for Effective Organizations, University of Southern California
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Solutions Organization Design
§ Solutions
§ Scale & Scope
§ Component Integration
S trat egy
§ GAMs, PMs
§ Business generalists
§ Networkers
P e o pl e
R e w ard s
S tr u ct ur e
Pr o c e s s e s
§ One company
§ Market rates
© 2002 Center for Effective Organizations, University of Southern California
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§
§
§
§
§
§
§
Customer/Product
Solutions unit
Solutions councils
Flexible resource units
Product/Customer/Geography P&Ls
Strategic planning
Product portfolio
Opportunity management
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In the knowledge economy, intangible
assets such as brand, goodwill, and
knowledge that is built into processes and
products are becoming the critical
competitive resources.
Performance depends on how well
knowledge is imported, generated and
leveraged throughout the organization.
© 2002 Center for Effective Organizations, University of Southern California
SM26M
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Leveraging Knowledge
Unit B
External
Knowledge
Im
po
rti
ng
a
ver
e
L
Value
ack
b
d
Fee
Unit A
Generating
& Applying
Delivering
g
gin
Delivering
Value
Generating
& Applying
Internal /
External
Customers
Feedback
© 2002 Center for Effective Organizations, University of Southern California
SM58M
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Deriving Value from Knowledge
Knowledge Work
Behaviors
Knowledge Outcomes
Company Performance
System Performance
Focus
Generating Knowledge
Performance
Systematic Processes
Applying Knowledge
Sharing Knowledge
Improving Methods
and Processes
Improvement in
Performance
Trying New
Approaches
© 2002 Center for Effective Organizations, University of Southern California
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Designing
Designing the
the Knowledge
Knowledge Organization
Organization
• Communicate a strategy that gives employees an
understanding of where the business is headed and
what competencies will be important in the future.
• Articulate the knowledge strategy for the organization:
in what areas it intends to achieve competitive
advantage by being the knowledge leader.
• Encourage interpersonal
networks for learning and
collaboration in dispersed
knowledge communities.
• Establish new roles to
facilitate knowledge
across boundaries and
provide a catalyst for
creating communities of
practice and capturing the
collective wisdom of these
groups.
Strategy
• Link project and unit goals explicitly to
the knowledge strategies of the company.
People
Structure
• Design a new employment relationship
to motivate employees to contribute to
organizational knowledge.
• Support ongoing employee
development linked to the firm’s
key knowledge needs.
Rewards
Processes
IT
• Create explicit rewards for knowledge
contributions.
• Treat IT as a facilitator of people
networks, rather than a replacement
for them.
• Give employees a stake in the business.
• Avoid over-emphasis on individual
pay-for-performance when trying to
foster knowledge-sharing in team-based
organizations.
• Harness IT to embed and capture
knowledge in core work processes
and tools.
Work
Management
• Create roles and processes to capture knowledge
that is generated while doing the work.
• Include knowledge objectives in the goals of the
company and its units.
• Incorporate more aspects of system performance
– cost of product, cost of ownership, quality,
serviceability, manufacturability – into technical
work processes and tools.
• Regularly communicate team, business unit and
company goals and performance progress,
including customer and competitor information,
so employees can think in terms of overall
business requirements.
• Build connecting knowledge into the standard
project management process.
© 2002 Center for Effective Organizations, University of Southern California
SM70M
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Design at All Systems Levels
Inter-Organizational
Corporate/
System Wide
Business
Unit
© 2002 Center for Effective Organizations, University of Southern California
Team, Work Unit,
or Work Process
SM22I
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Knowledge Work Design
Motivating Work Design Characteristics
Proposed Knowledge Work Forms
Task Identity
Sequence of assignments to well-defined tasks
and projects
Variety
Application of deep skills in multiple contexts over
time; Development of broad skills through diverse
assignments and performing more aspects of the
process and/or systems integrating tasks
Significance
Knowing contribution to larger business context
and success and/or to external customer and/or
knowledge community
Feedback
Knowledge of performance of team, project and
larger performing units; Individual feedback
from job and from multiple sources
Autonomy
Collective and/or individual self-regulation with
relationship to larger context
Growth and Development*
Enhancing personal competency through work
assignments
Network Building*
Connections to knowledge community;Task
connections; Customer connections
*Not included in original Hackman and Oldham (1977) task attributes framework
© 2002 Center for Effective Organizations, University of Southern California
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Practices that
Accelerate Learning
Leader Responsibilities
During Transition
Focusing the
Organization
Shared
Meaning
Systemic
View
Dialogue,
Conversation,
Discussion
Leading
Learning
Learning
from
Experience
Self-Design
© 2002 Center for Effective Organizations, University of Southern California
Developing
Capabilities
Defining the New
Employment
Relationship
Sense-Making
SM7L
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Implications for Action:
The HR Role in Organization Redesign
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Providing/accessing design expertise
(content and process) and consultation
Supporting management team in creating a
change structure
Providing content and process knowledge on
change and learning
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Working on systemic alignment
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Change capability development
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Helping the system balance learning and
performing
© 2002 Center for Effective Organizations, University of Southern California
RT1H
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