1. 1 Transformation at the IRS Dennis Campbell Harvard Business School September 2009

2. At most service organizations… Many organizations attract whatever customers they can Resort to product proliferation to satisfy the diverse customer base And have no clear measure of appropriate fit for employees No alignment No focus

3. Focused Entry Targets a select group of customers Designs select set of products/services to satisfy its customer’s needs Selects a precise group of employees to deliver on the service model

4. Focused Entry Targets a select group of customers Designs select set of products/services to satisfy its customer’s needs Selects a precise group of employees to deliver on the service model Alignment Focus

5. 5 Successful Incumbent Response Service model Shared services Human resource processing Executive training Finance Purchasing IT … {economies of scale} {economies of experience} Multi-Focused Firm

6. Matching Operational Design with IRS Objectives Operational DesignObjective Organize customers by segmentReduce complexity Train specialistsIncrease quality Task allocation limited within segmentIncrease expertise and quality Use technology to capture customer callsIncrease predictability of volume Simplify formsDecrease mistakes Train customersIncrease satisfaction, decrease calls 6

7. Kotter’s Change Process Phase One: Getting Started Create a sense of urgency Create a vision of what the organization will become Form a change leadership team Phase Two: Involving Everyone Communicate the vision often, in a variety of ways Empower others to take action on the vision Inspire and celebrate small wins Phase Three: Ongoing Improvement Keep interest and effort on further improvements Institutionalize new approaches, ensuring current leader’s replaceability Source: John P. Kotter, “Leading Change: Why Transformation Efforts Fail,” Harvard Business Review 73(2) (1995); 59- 67