NAWBO-LA PEAK LEADERSHIP ACADEMY
Session 1:
A Framework for Building
Successful Organizations and
Managing Organizational
Change
Management Systems Consulting Corporation
10990 Wilshire Blvd. Suite 1420, Los Angeles, CA 90024
(310) 477-0444 • www.mgtsystems.com
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
A Framework for Building Successful
Organizations and Managing Organizational
Change
PURPOSE:
•
Help you understand the critical tasks of organizational
success.
•
Introduce you to a framework for “Strategic
Organizational Development” Planning.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
2
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
A Framework for Building Successful
Organizations and Managing Organizational
Change
OBJECTIVES:
1. Identify seven critical tasks of organizational success.
2. Use the Pyramid of Organizational Development as a
tool in identifying your organization’s strengths and
areas for improvement.
3. Understand the stages of organizational development.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
3
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Transitions
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
4
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Four Stages of Transitions
• Preparation
• Getting Started
• Letting Go
• Completion
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
5
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Building Successful
Organizations and Managing
Organizational Change
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
6
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Three Fundamental Questions
• What is required to build a successful
organization?
• Why are some organizations successful
and others not successful over the long
term?
• What can we do to increase the probability
of an organization’s success over the longterm?
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
7
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Organizational Development
Successes and Failures
Paired Comparisons
Successes
Failures/Difficulties
Starbucks
Boston Market
PacifiCare
MaxiCare
Southwest
People Express
Nike
L.A. Gear
Wal*Mart
K-Mart
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
8
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Wal*Mart vs. K-Mart, 1990’s
$300.00
$200.00
*
$150.00
Adjusted for splits
Wal-Mart
K-Mart
$100.00
$50.00
19
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
$-
19
90
Stock Price*
$250.00
Year
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
9
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Wal*Mart vs. K-Mart, 2000-2003
$250.00
$200.00
Adjusted for splits
** K-Mart filed for
Chapter 11
bankruptcy during
2002.
$150.00
Wal-Mart
$100.00
K-Mart
$50.00
20
02
**
20
01
$-
20
00
Stock Price*
*
Year
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
10
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Starbucks vs. Boston Market, 1990’s
$120.00
Stock Price*
$100.00
$80.00
*
$60.00
Adjusted for splits
Starbucks
Boston Market
$40.00
$20.00
$1994
1995
1996
1997
1998
1999
Year
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
11
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Starbucks vs. Boston Market, 2000-2003
$300.00
*
** Boston Market’s
last day of trading
was May 27, 2000.
The company filed
for Chapter 11
bankruptcy in
October of 1998.
$250.00
Stock Price*
Adjusted for splits
$200.00
$150.00
Starbucks
Boston Market
$100.00
$50.00
$2000**
2001
2002
10.31.03
Year
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
12
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Building a Successful Organization
(Management Tools)
•
A lens to understand how to build successful
organizations
•
Identification of 7 critical stages of growth
•
Tools for changing the game: A template and process for
strategic planning that functions as a tool for “strategic
organizational development”
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
13
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
The Strategic “Lens” for
Building Successful
Organizations
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
14
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Critical Tasks of Organizational Success
• Identification and definition of a viable market to serve
• Development of appropriate products and/or services
• Acquisition and/or development of resources required to
operate and grow the organization
• Development of the operational systems necessary for
the organization to function on a day-to-day basis
• Development of the management systems required for
the overall functioning of the organization on a long-term
basis
• Development and effective management of the
organizational culture
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
15
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Pyramid of Organizational
Development
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
16
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Markets
The extent to which the organization has identified its market (i.e., the
customers it wants to serve) and has developed a market niche (i.e., a place
in the market where the organization has a sustainable competitive
advantage)
MARKETS
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
17
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Products
The extent to which the organization’s products and/or services meet the
needs of its chosen customer base (i.e., the market)
PRODUCTS/SERVICES
MARKETS
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
18
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Resources
The extent to which the organization has the resources needed to support
its growth.
RESOURCES
PRODUCTS/SERVICES
MARKETS
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
19
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Operational Systems
The extent to which the organization has developed the systems needed to support its
daily operations (e.g., accounting, customer service, sales, marketing, human resource
management, information technology, etc.)
OPERATIONAL SYSTEMS
RESOURCES
PRODUCTS/SERVICES
MARKETS
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
20
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Management Systems
The extent to which the organization has developed the planning, performance
management, structural and management development systems needed to
support its long-term growth.
MANAGEMENT SYSTEMS
OPERATIONAL SYSTEMS
RESOURCES
PRODUCTS/SERVICES
MARKETS
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
21
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Culture
The extent to which the organization has systems in place to explicitly manage its
culture, which is required to support long-term growth.
MANAGEMENT SYSTEMS
OPERATIONAL SYSTEMS
RESOURCES
PRODUCTS/SERVICES
MARKETS
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
22
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Pyramid of Organizational Development
Corporate
Culture
Values Beliefs Norms
Management Systems
Planning
Accounting:
• Billing
• Payroll
Financial
Resources
Organization
Management
Development
Operational Systems
Production:
Marketing:
•Shipping
• Selling
Perf.
Mgmt.
Personnel:
• Hiring
• Compensation
Resource Management
Technological and
Physical Resources
Human
Resources
Products & Services
Develop Products (Services)
Markets
Define Market Segments and Niche
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
23
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Bell Carter Olive Company
Strengths
• Owners and other senior
managers personify culture
• Hiring process designed to
help identify candidates who
“fit in”
CULTURE
•People-Oriented
•Team-Oriented
• Fun
MANAGEMENT SYSTEMS
• Recognizes need to
become more strategic
Limitations
• Culture becoming attenuated
• Lack formal culture management
system
• Need a culture that supports being
both a private label and branded
olive company
• Lack formal strategic planning system
• Plans are developed on a yearly • Lack formal management development
system
basis for the company
• Control is more individual vs. system-based
• Structured for private label
• Structure needs to be redefined
business
OPERATIONAL SYSTEMS
• Strong focus on
continuous
improvement
• Systems stretched by growth
• Systems in place to manage private-label • Need to adapt existing/create new
systems for branded business
business
• Focus on becoming the low cost producer • Need to automate some systems
• Knowledgeable people
• Stable workforce
• Continuous focus on acquiring
equipment needed to support
low-cost production
• Ability to acquire
needed product
from a variety of
sources
• Understands private label
customer needs
• Dominates private label
market
• Strong industry knowledge
RESOURCES
• May need people with
different skills to take
the organization into
the future
• Focus on getting the people, the
equipment and the facilities
needed to support growth
PRODUCTS
• Focus on only
private-label black
olives may be limiting
• Private label black olives
• Good service
MARKETS
• Focus on meeting private
label customer needs
• Servicing branded
customers is less of a
focus
• May not fully understand
branded market
BUSINESS FOUNDATION
•Business Concept: Private-label black olive company
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
24
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Applying the Pyramid to Your
Organization
• What are your company’s most significant
strengths at each level in the Pyramid of
Organizational Development?
• What are your company’s most significant
“developmental opportunities” (i.e.,
limitations) at each level in the Pyramid of
Organizational Development?
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
25
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Current Status: Pyramid of Organizational Development
Strengths
Opportunities to Improve
CULTURE
MANAGEMENT SYSTEMS
OPERATIONAL SYSTEMS
RESOURCES
PRODUCTS/SERVICES
MARKETS
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
26
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Implications of the Pyramid
● Six Key Building Blocks of Successful Organizations
● The Six Key Building Blocks must “fit together”
● Organizations compete at ALL levels of the Pyramid
● Name of the game: Develop Sustainable Competitive
Advantages at all levels
● Long-term Sustainable Advantage at the top three levels
● Long-term Sustainable Success requires complete and
integrated development of the whole pyramid
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
27
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Building a Successful Organization
(Management Tools)
•
A lens to understand how to build successful
organizations
•
Identification of 7 critical stages of growth
•
Tools for changing the game: A template and process for
strategic planning that functions as a tool for “strategic
organizational development”
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
28
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Stages of Growth (US $)
–Size of Organization (Sales)–
Stage
Description
Critical
Manufacturing
Development Area
Distribution
Service
I
New Venture
Markets and
“Products”
Less than $1
million
Less than
$500,000
Less than
$300,000
II
Expansion
Resources and
Operational
Systems
$1 to $10
million
$500,000 to
$5 million
$300,000 to
$3.3. million
III
Professionalization
Management
Systems
$10 to $100
million
$5 million to
$50 million
$3.3 million to
$33 million
IV
Consolidation
Corporate
Culture
$100 to $500 $50 million to
million
$250 million
V
Diversification
Replication of the $500 million
Cycle
to $1 billion
$250 million to $167 million to
$500 million
$333 million
VI
Institutionalization
Integration
$1 billion +
$500 million + $333 million +
VII
Decline
Revitalization
Any Size
Any Size
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
$33 million to
$167 million
Any Size
29
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Causes of Organizational Growing Pains
Organizational
Organizational
Size
Development
and
Gap =
Revenues
Development
Growing Pains
Infrastructure
Time
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
30
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Growing Pains Are:
• Problems which occur as a result of inadequate
organizational development in relation to business size
and complexity.
• A common set of symptoms that something has gone
wrong in the process of organizational development.
• A signal of the need to make the transitions from one
stage of organizational development to the next.
• A set of leading indicators of future financial
performance.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
31
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Building a Successful Organization
(Management Tools)
•
A lens to understand how to build successful
organizations
•
Identification of 7 critical stages of growth
•
Tools for changing the game: A template and
process for strategic planning that functions as a
tool for “strategic organizational development”
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
32
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
What is a Strategic Plan?
A Strategic plan is a written statement of the
future direction and goals of an organization based
upon an assessment of:
•
•
its current strengths and limitations for each of its
key result areas
the current and anticipated future environment in
which it will operate
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
33
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Strategic Transformational Planning
(5)
Develop
Organizational
Transformation Plan
(1)
Current
Org.
Pyramid
Business
Foundation
(4)
Design Pyramid of
Organizational
Development Required
for Future Business
Vision
(3)
Future
Org.
Pyramid
Business
Vision
(2)
Identify Future
Business
Concept/Vision
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
34
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Strategic Planning Process
1
2
ENVIRONMENTAL SCAN
ORGANIZATIONAL ASSESSMENT





 Market Analysis
 Competitive
Analysis
 Trend Analysis
3
STRATEGIC ISSUE RESOLUTION


4
Business Foundation Issues
Strategic Organizational Development Issues
STRATEGIC BUSINESS PLAN







6
Culture
Management Systems
Operational Systems
Resources
Markets and Products
Situation Analysis
Business Definition
Strategic Mission
Strategy
Key Result Areas
Objectives and Goals
Action Plans
5
BUDGETING
QUARTERLY MANAGEMENT REVIEW


Reports
Meetings
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
35
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Session Follow-Up and Preparation for the Next
Session
• Complete (and have up to 10 people on your team complete)
the Growing Pains and Organizational Effectiveness Surveys©.
(See separate instructions).
• Complete the Planning Survey (see separate document).
– You might meet with other members of your team to complete the
survey OR
– You might ask other members of your team to complete and
submit the survey to you.
– If you have other people complete the survey, be sure to
summarize the results into a single document.
• Be sure to bring the completed planning survey with you to
our next session.
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
36
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
A Final Thought
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
37
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
It’s what you learn after you
know it all that counts the
most.
- John Wooden
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
38
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
References
• Eric G. Flamholtz and Yvonne Randle, Growing Pains, Jossey-Bass Publishers, Inc.
(2000).
• Eric G. Flamholtz and Yvonne Randle, Changing The Game: Transformations of the
First, Second and Third Kinds, Oxford University Press (September 1998).
• Eric G. Flamholtz and Yvonne Randle, The Inner Game of Management, AMACOM,
(1987)
• Eric G. Flamholtz, “Managing Organizational Transitions: Implications for Corporate
and Human Resource Management,” European Management Journal, (Vol. 13, No. 1,
March 1995), pp. 39-51.
• Eric G. Flamholtz and Zeynep Aksehirli, “Organizational Success and Failure: An
Empirical Test of a Holistic Model,” European Management Journal, (Vol. 18, No. 5,
October 2000), pp. 488-498.
• Eric G. Flamholtz and Wei Hua, “Strategic Organizational Development and the
Bottom Line: Further Empirical Evidence,” European Management Journal, (Vol. 20,
No. 1, pp. 72-81, February 2002).
• Eric G. Flamholtz and Wei Hua, “Strategic Organizational Development, Growing
Pains and Corporate Financial Performance: An Empirical Test,” European
Management Journal, (Vol. 20, No. 5, pp. 527-536, October 2002).
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
39
Session 1
NAWBO-LA PEAK LEADERSHIP ACADEMY
Please note that all of the materials in this
slide presentation are the proprietary
intellectual property of Management
Systems Consulting Corporation and may
not be reproduced or otherwise distributed
without written permission.
For further information about reproduction rights
for materials in this presentation, please contact:
Management Systems Consulting Corporation
10990 Wilshire Blvd., Suite 1420
Los Angeles, CA 90024
(310) 477-0444
www.mgtsystems.com
© Management Systems Consulting Corporation, 1989. Revised 2004. All rights reserved.
40