2013 NCPMI Annual Conference Rich Burton Professor of Strategy and Organization

2013 NCPMI Annual Conference Børge Obel, Aarhus University & consultant Dorthe Døjbak Håkonsson, Aarhus University & MindLab

2013 NCPMI Annual Conference Novo Nordisk Shell Other consulting clients Carroll et al 2006 NASA study YOU! We need your comments & help

2013 NCPMI Annual Conference What is to be done? Who is to do it? When is it to be done? Sounds simple!

2013 NCPMI Annual Conference Ray Levitt, Stanford University Developer of Vite SimVision Project Management ePM consulting

2013 NCPMI Annual Conference ] Step 1: Organizational Audit & Design Gather information Make diagnostic analysis & determine misalignments Decide which misalignments to fix for a new design Step 2: Action Plan Assess the process & content costs for a proposed sequence Determine the sequence of fixing misalignments Decide which detailed design variables to change Step 3: Implementation Plan Allocate responsibilities & resources Decide on milestones & deadlines Follow up on progress Make progress visible Communicate the plan

2013 NCPMI Annual Conference Recently, Steve Balmer Microsoft’s retiring CEO wrote in an to all Microsoft employees: “Today, we are announcing a far-reaching realignment of the company that will enable us to innovate with greater speed, efficiency and capability in a fast changing world. Today’s announcement will enable us to execute even better on our strategy to deliver a family of devices and services that best empower people for the activities they value most and the enterprise extensions and services that are most valuable to business”.

Porter’s Five Forces…

2013 NCPMI Annual Conference ] Step 1: Organizational Audit & Design Gather information Make diagnostic analysis & determine misalignments Decide which misalignments to fix for a new design Step 2: Action Plan Step 3: Implementation Plan

2013 NCPMI Annual Conference On to March 21, 2012, HP announced: “an organizational realignment to improve performance and drive profitable growth across the entire HP portfolio. The new structure is expected to speed decision making, increase productivity and improve efficiency, while providing a simplified customer experience. Ensuring we have the right organizational structure in place is a critical first step in driving improved execution, and increasing effectiveness and efficiency,” “The result will be a faster, more streamlined, performance-driven HP that is customer focused and poised to capitalize on rapidly shifting industry trends.” On August 8, 2012 HP announced organizational changes for Enterprise Services with leadership changes On August 21, 2013HP announced changes to its executive leadership team that will help the company accelerate its turnaround. In a separate organizational move, HP combined its marketing and communications organizations under the leadership of Chief Communications Officer Henry Gomez. All of the changes were to be effective immediately HP announced. (In principle this announcement covered all three steps in the implementation process).

2013 NCPMI Annual Conference Formal organizationInformal organization  Organization Design  Role responsibility  Business Processes  Policy and Standards  Governance structure  Decision rights  Decision processes  Monetary rewards  Control models  Formal recognition  Information flows  Knowledge Management system  Relations  Collaboration  Teams  Organizational influence  Values and standards  Expectations  Unwritten rules Table 1: HP WAY NOW

2013 NCPMI Annual Conference

2013 NCPMI Annual Conference Organization Design Parameters and Dimension scores for alignment Design Parameter Scores Low…………………… ……..High Scores Low………………………….High GoalEfficiencyEffectiveness StrategyExploitationExploration EnvironmentComplexityUnpredictability Organizational ComplexityVertical differentiationHorizontal differentiation ConfigurationFunctional orientationProduct/service/customer orientation GeographyOptimal sourcingLocal responsiveness Knowledge exchangeIT-infusedVirtualization Task designDivisibilityRepetitiveness PeopleNumberProfessionalization Leadership styleUncertainty avoidancePreference for delegation Organizational climateTensionReadiness to Change Coordination and controlFormalizationDecentralization Information systemAmountTacit nature IncentivesTarget of incentivesBasis of evaluation

2013 NCPMI Annual Conference Design ParameterLow…High ScoresLow...High ScoresWho has this informationWhen do we gather information GoalEfficiencyEffectiveness CEO/C-suite, board of directors, official documents Very early in the change process StrategyExploitationExploration CEO/C-suite, board of directors, official documents EnvironmentComplexityUnpredictability CEO/C-suite, marketing group, HR group, Technology group Organizational ComplexityVertical dimension Horizontal dimension Organization charts for reporting relations, examine work flows in information processing, Configuration Functional orientation Product/service/cu stomer orientation Organization charts for reporting relations, examine work flows in information processing, GeographyOptimal sourcingLocal orientation Knowledge exchangeIT-infusedVirtualization Task designDivisibilityRepetitiveness workflow analysis, work technology level PeopleNumberProfessionalization employee survey; employee focus group, Leadership style Uncertainty avoidance Preference for delegation CEO suite self assessment, examine who makes what decisions Organizational climateTension Readiness to Change HR Coordination and controlFormalizationDecentralization Information systemAmountTacit nature IncentivesTarget : individual or group Basis: behavioral or results

2013 NCPMI Annual Conference Figure 1.1: Organizational Design Change Model [ [ Step 1: Organizational Audit and Design Step 2: Action Plan Assess the process and content costs for a proposed sequence Determine the sequence of fixing the misalignments Make decision on which detailed design variables to change Step 3: Implementation Plan

2013 NCPMI Annual Conference Finding the right path or order of what to do Aarhus University: IT timing created a problem HP : informal first The Diamond Model: the large number of possible orders

2013 NCPMI Annual Conference

2013 NCPMI Annual Conference Fixing one dimension is likely to make things worse; it takes more integration e.g., change structure only Do IT first e.g., Aarhus University Prepare the culture: HP Incentives are frequently ignored: efficiency, effectiveness Anticipate difficulties: focus on what can go wrong for a possible order Things may get worse before they get better Change is costly

2013 NCPMI Annual Conference Figure 1.1: Organizational Design Change Model Step 1: Organizational Audit and Design Step 2: Action Plan Step 3: Implementation Plan Allocate responsibilities and resources Decide on milestones and deadlines Follow up on progress Make progress visible Communicate the plan

2013 NCPMI Annual Conference What are the tasks Assignment of Who is responsible: individuals, group, committee, taskforce When: the order of change Milestones and deadlines Lay out the Project Management chart

2013 NCPMI Annual Conference

2013 NCPMI Annual Conference ] Step 1: Organizational Audit & Design Gather information Make diagnostic analysis and determine the misalignments Decide which misalignments to fix for a new design Step 2: Action Plan Assess the process and content costs for a proposed sequence Determine the sequence of fixing the misalignments Make decision on which detailed design variables to change Step 3: Implementation Plan Allocate responsibilities and resources Decide on milestones and deadlines Follow up on progress Make progress visible Communicate the plan

2013 NCPMI Annual Conference Each step is a project of what, who and when Your skills as PM can be crucial Steps 2 & 3 are the more likely to be messed up Your advantage is steps 2 & 3

2013 NCPMI Annual Conference Change is coming, Get involved – change is not spectator sport Use your PM skills to be a change agent Map what you see as a project with: what, who and when Map what you think will happen as a project Know what is happening; volunteer, join taskforces Join Committees: ask questions, set agenda, report results, create what happened Develop the change implementation plan for strategy and organizational design Use your PM skills to be a change agent