©Alfonso Cornejo CM~SC ©1 Complexity Management through Structural Change © CM~SC © By Alfonso Cornejo, Author of the Book Compelxity and Chaos: A Guide for XXI Century Management

©Alfonso Cornejo CM~SC ©2 Environment pressures that demands continual adaptation Industry arena Cost Control Service Benchmarks Technology Globalization Customer Ever changing needs Friction Free EconomyProfit Goals Normativity Desired Performance

©Alfonso Cornejo CM~SC ©3 Complexity Management

©Alfonso Cornejo CM~SC ©4 Complexity Management New Paradigm to comprehend the dynamic of organizational processes. New Paradigm to comprehend the dynamic of organizational processes. Powerful tool to assure high performance of Business Processes. Powerful tool to assure high performance of Business Processes. As a result of Structural Change, organizacional behavior improves. As a result of Structural Change, organizacional behavior improves.

©Alfonso Cornejo CM~SC ©5 ComplexityApplications StrategyOrganizationProcesses Metaphor Principles Applications Metaphor Principles Applications Arie de Geus Living Company James Moore The Death of Competition Margareth Whetaley Leadership and New Science Michael Mc Master Intelligence Advantadge Peter Sengue Stuart Kauffman Kevin Kelly Kees Van Der Heijden Scenarios Peter Schwartz The Art of the Long View SPM Archetypes Scenario Planning Interactive Management Structural Change Genetic Algoritms JOHN DEERE CEMEX Case Bordering on Chaos There are stranger places to see the latest in complexity theory in action, but delivering cement in Mexico is a pretty good start. By Peter Katel CEMEX

©Alfonso Cornejo CM~SC ©6 Complexity Do we look desorder......?...or the Order behind Disorder......? Conflict Conflict Lack of priority Lack of priority Pressures of environmentPressures of environment Lack of direction Lack of direction Limited resources Limited resources Not enough time Not enough time StructuresStructures Behaviors Behaviors

©Alfonso Cornejo CM~SC ©7 ¿How to deal with every day Complexity ? ? Low sales... Rejected products... Production delays... Unsatisfied Customers.... Fails on communication..... Demotivated people.... Hurries..... Etc P ? Events Structures Patterns

©Alfonso Cornejo CM~SC ©8 Types of Complexity Types of Complexity a) Origin Complexity: Due to original company characteristics, by example. 3M vs Budweiser. b) Residual Complexity: Related with the everyday operation of the System, by example. Conflict, orders cancellation, lack of raw material, personnel turnover, etc. c) Provoked Complexity: Complexity generated by particular instead of group decisions, by example: To acquire wrong technology, to make wrong hiring selections, to launch to market new products but without analysis, etc.

©Alfonso Cornejo CM~SC ©9 Structure – Process Model “SPM”

©Alfonso Cornejo CM~SC ©10 The Need for a Model of Complexity Management Organizational Behavior and Conducts... Organizational Behavior and Conducts......are the result of different interacting structures, forms, patterns Relations, paradigms, principles, etc....are the result of different interacting structures, forms, patterns Relations, paradigms, principles, etc. We can separate current situations that we observe and live in a Model of polarities: 1.- Complex conducts 2.- The variables that generate these complex behaviors We can separate current situations that we observe and live in a Model of polarities: 1.- Complex conducts 2.- The variables that generate these complex behaviors

©Alfonso Cornejo CM~SC ©11 Structure – Process Model and Chess... Checkered Board Rules of the Game Pieces its characteristics Position Between pieces Plays & Possibilities

©Alfonso Cornejo CM~SC ©12 A good analisys... S1S2S3S4S5S6S7P1P2P3StructuresProcesses

©Alfonso Cornejo CM~SC ©13 Structure – Process Model (SPM) StructureProcesses System Frontier EnvironmentEnvironment StructProc Culture

©Alfonso Cornejo CM~SC ©14 Structure – Process Model 3 Levels (organization) Organization Cultural Person Structure Process Process Process Structure Structure

©Alfonso Cornejo CM~SC ©15 S-P M Organization level SP Estructura Procesos Organization Culture Person Procesos Estructura

©Alfonso Cornejo CM~SC ©16 S-P M Cultural level SP Estructura Procesos Organization Culture Person Procesos Estructura

©Alfonso Cornejo CM~SC ©17 S-P M at Personal level SP Estructura Procesos Organization Culture Person Procesos Estructura

©Alfonso Cornejo CM~SC ©18 StructuralChange

©Alfonso Cornejo CM~SC ©19 I. Current Situation Diagnostic of current observed processes. Diagnostic of current observed processes. Structures that generate the current processes Structures that generate the current processes Current situation Observed environment: competitive environment characteristics that affect organizational dynamics. E E P P S S C S Structural Change Methodology Alfonso Cornejo Alvarez ©

©Alfonso Cornejo CM~SC ©20 II. Desired situation Profile of required processes in order to maintain competitive edge. Profile of required processes in order to maintain competitive edge. Structures required are identified to support tne new organizational processes. Structures required are identified to support tne new organizational processes. Desired situation Change Perspectives: Environmental Trends and new Change Perspectives that trigger new organizational atitudes and behaviors. ET P P S S D D Structural Change Methodology Alfonso Cornejo Alvarez © 1997

©Alfonso Cornejo CM~SC ©21 III. Structural Change Detailed Action Plan in order to implement Structural Changes required, involving different organizational areas (Technological, Administrative, Cultural and Human). Detailed Action Plan in order to implement Structural Changes required, involving different organizational areas (Technological, Administrative, Cultural and Human). Required actions are implemented to assure the appearing of new organizational process. Required actions are implemented to assure the appearing of new organizational process. SC P P I I Structural Change Structural Change Methodology Alfonso Cornejo Alvarez © 1997

©Alfonso Cornejo CM~SC ©22 IV. Learning New processes are mesured in operation in order to detect effectiveness of Structural Change previously planned. New processes are mesured in operation in order to detect effectiveness of Structural Change previously planned. A learning about the performance of processes is taken, Structural adjustments are made, and a new stage for organizational adaptation is established. A learning about the performance of processes is taken, Structural adjustments are made, and a new stage for organizational adaptation is established. L L M M L L Learning Structural Change Methodology Alfonso Cornejo Alvarez © 1997

©Alfonso Cornejo CM~SC ©23 The importance of Design “All the organizations are perfectly designed to obtain the results that they generate”

©Alfonso Cornejo CM~SC ©24 If you don’t allow Structural Change to ocurr…. There won’t be any change