Strategy Alignment & Deployment through Enterprise Change Capabilities. Dr. George Roth MIT Sloan School of Management

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1 Strategy Alignment & Deployment through Enterprise Change Capabilities Dr. George Roth MIT Sloan School of Management DoD CPI Symposium ~ May, 008

2 LAI Consortium a venue for collaboration on Aerospace challenges Avionics/Missiles BAE SYSTEMS North America Northrop Grumman Electronic Systems Northrop Grumman Mission Systems Raytheon Co. Raytheon RMS, NCS, SAS Rockwell Collins Textron Systems L Comm Airframe Bell Helicopter Textron Boeing Integrated Defense Systems Boeing Commercial Airplanes Lockheed Martin Aeronautics Company Sikorsky Aircraft (UTC) Propulsion/Systems Rolls Royce (N.A.) Pratt & Whitney (UTC) Hamilton Sundstrand (UTC) Curtiss-Wright Flight Systems Harris Government Comm. MIT Engineering Systems Aeronautics & Astronautics Mechanical Engineering Sloan School of Management US Air Force SAF/AQ Aeronautical Systems Center Air Force Research Laboratory (Materials and Manufacturing Directorate) Space and Missile Systems Center (SMC) Electronic Systems Center SPOs: F-, C- Space Lockheed Martin Space Systems Co. Northrop Grumman Space Technology EdNet colleges and universities in the U.S., UK, and Mexico make up LAI's Educational Network Other Participants IAM AIA DAU IDA International Collaborations: Linköping University Warwick, Bath, Cranfield Nottingham Universities Other Government DCMA NASA NAVAIR AMCOM OUSD(AT&L) NRO Massachusetts Institute of Technology George Roth 0//08 -

3 Enterprise Challenge Adapting to ever-changing external environments Managing increasing technological complexity Coordinating across multiple stakeholders and interfaces Working through collaborative networked enterprises MOVING FROM THE PAST (vertically integrated) organizations TOWARDS THE FUTURE (networked) enterprises Strategy Alignment & Deployment Strategic Change Implementation Massachusetts Institute of Technology George Roth 0//08 -

4 Understanding Lean + Enterprise + Change What data and experience do we draw upon? Research on Lean Research on Enterprise Books/documented studies Toyota and lean i.e. The Machine that Changed the World, The Toyota Way, Remade in America, Collaborative Advantage Management/leadership i.e. Built to Last, Good to Great, Execution, The Leadership Engine Corporate/leadership i.e. Jack, Who Says Elephants Can't Dance? Strategy/Change i.e. The Innovating Organization, Leading Change, Breaking the Code of Change, The Dance of Change Case studies that identify concepts successful lean change Enterprise deployment projects that develop and test concepts Research on Change lean+change change+enterprise lean+ enterprise+change Massachusetts Institute of Technology George Roth 0//08 -

5 Enterprise transformation & change evolving from lean initiatives Raytheon Warner Robins Rockwell Collins Letterkenny Army Air Logistics Center Depot Vehicles Massachusetts Institute of Technology George Roth 0//08 -

6 Charter Description/Mission: Start Date & Timi ng: One or two sentences that des cri be the team Õs task. Team Leader(s): Team Members: Case For Action: One or two sentences that des cri be the problem the team is addr essi ng and answer s the ÓWhy EVSMA, why now? Ó question. Enterprise Description: Including: - Enterpri se boundar ies (What i s considered i nter nal and external to the enterprise?) - s/ser vi ces deli vered by the enterpr ise - M arket segments tar geted and curr ent mar ket pos ition -Major competitors - Enterpri se sal es volume and workforce make- up and si ze Champion: Facilitators: Expect ed Outcom es: The outcomes that the sponsor desi res fr om the pr oj ect. Usual ly two to thr ee measur abl e obj ec ti ves are incl uded. Low High Low Relative Importance Leadership Processes Material Stream - ŅShop Floor Ó Life Cycle Processes Information Stream - ŅOffice Floor Ó Enabling Processes High Metrics (s) & Service(s) St rategic Objective s Ke y Pr o ce ss es Stakeholder s A portrayal of the relationships of the enterprise with its external environment and the general ordering and integration of high-level internal enterprise processes Enterprise Stream Analysis EVSMA Team Facilitators Enterprise Lean Training Current Enterprise Goals? Define the Enterprise Team Charter Enterprise Boundaries Enterprise Description Draft Describe Stakeholders, Communication Plan Processes, Metrics Identification of Stakeholders Identification of Processes Identification of Metrics Collect Data Prioritized Stakeholder s Enterprise Resource Allocation based on Processes Current Metric s Relative Performance Construct Current State Perspectives Stakeholder s Analysis Alignment of Goals, s, Processes, Metrics Current State Process Map Process Interactions Identify Enterprise Opportunities LESAT Scores List of Wastes Describe Future List of State Vision Opportunities -0 year Goal (BHAG) Focus Areas Mid-point Goals Create Transformation Plans Long-term (-0 year) Strategic Transformation Plan Short-term ( months - year) Implementation Execution Plan Communication Plan Developed in MIT s Lean Enterprise course and deployed at: Ogden ALC, Tinker ALC, Warner Robins ALC, Joint AFMC & SAF/AQ Future of Acquisition Team, Space and Missile Systems Center Massachusetts Institute of Technology George Roth 0//08 -

7 Limitations of Planned Organizational Change Multi-organization Focus is on single enterprise form: organizations: New organizational forms Our critical correlate challenges with high are not performance within domains of single organizations Single organizations are: Enterprises are: Hierarchical Poly-centric Highly organized Multiple Tightly relationships coupled Loosely coupled CEO Executive Board Functions CEO Research and Sales and Manufacturing Materials Finance Marketing Management Teams Sales Engineering Manufacturing Purchasing Research and Massachusetts Institute of Technology George Roth 0//08 -

8 Challenges of Enterprise Change CEO Executive Board CEO Functions Research and Sales and Manufacturing Materials Finance Marketing Management Teams Sales Engineering Manufacturing Purchasing Research and Organizations are: Hierarchical Highly organized Tightly coupled Enterprises are: There are different assumptions about change and context Poly-centric Multiple relationships Loosely coupled We can not assume that we can bootstrap past knowledge We need a change theory developed in an enterprise context Massachusetts Institute of Technology George Roth 0//08-8

9 A approach to Enterprise Change requires Identification recognition of the system and network you can not engage and improve what you do not identify Directiveness Providing direction, order, and alignment you can not organize a mess Crossing boundaries work across units and organizations Demonstrate gains to inspire action in others Set and manage boundaries through standards and plans Power and politics within organizations are learnings enemies Developing performance within and then across A potential worse-before-better dynamic requires Intergenerational and strong distributed leadership to sustain Note: These enterprise change propositions are contrary to current organizational change practices of relaxing central control, encouraging countless initiatives, and focusing internally Massachusetts Institute of Technology George Roth 0//08-9

10 Capabilities for Enterprise Lean Change Capabilities are: resources, talents, and abilities of an organization and its people that have the potential for development and use, and in their use, create expected outcomes while further developing themselves Distributing leadership Seeking growth Rethinking boundaries The system of change ~ leads to a ~ lean enterprise system Installing innovation sets Pulling & pushing change Massachusetts Institute of Technology George Roth 0//08-0