Global Supply Chain Organizational Models

Transcription

1 Reinventing Supply Chains Global Supply Chain Organizational Models Atlanta, Georgia Valerie Bonebrake SVP, Tompkins International Paul Clayton VP, GlaxoSmithKline August 26-28, Supply Chain Leadership Forum

2 Topics for Discussion Organization Design and Change Management (ODCM) Explained Importance of ODCM Culture and Alignment ODCM Approach Alternatives Concluding Thoughts 2

3 First: A Few Thoughts "...Strategy is about deciding what to do, execution about getting it done. Yet another and more important skill lies between the two -- in designing the organization to enable the behaviors and actions of employees to build organizational capital -- leadership, culture, alignment, and teamwork -- in order to achieve true focus on the customer... - Robert Kaplan, Harvard Business School, and David Norton, The Balanced Scorecard Cooperative Architecture does not create effective organizations by collecting extraordinary people; it does so by enabling very ordinary people to perform in extraordinary ways. - John Kay, Foundation of Corporate Success 2003 The neglected leadership role is the designer of the shop. - Peter Senge 3

4 Organization Design and Definitions Change Management (ODCM) Organization design is the process of crafting or reshaping an organization s structure including its processes, methods and skills to facilitate the workflow that enables the organization s mission. The goal is an integrated system of processes, people, information, and practices designed to achieve a set of objectives consistently, repeatedly and completely. Organization follows strategy. Change management is the process of managing transition through a set of methods and tools to bring people along with the change in the organization, thus gaining their commitment and support. Change and evolution are continuous and necessary in today s business environment. Generally, change negatively impacts productivity. Thus, managing transition from one state to another is critical to minimizing the inherent risks. 4

5 Organization Design and Change Management (ODCM) Business Context Organization Design: Aligns the organization infrastructure with new technology and process requirements Change Management: Identifies and manages transition risks Organization & People Info Driven Org. Process Process Centric Centric Organization Organization Design Design Organization Change Technology I/T Enabled Processes Process 5

6 Significance of Organization Design and Development New Markets Companies Today are Constantly Changing and Evolving. Business evolution to meet and shape demand New Products Requires reengineering of processes, technology, performance, and cost structures Evolution and related retooling the organization system New Processes New Practices New Systems New Cultures The greatest impediment to effective change is the organization s ability to adapt quickly and efficiently. 6

7 Importance of ODCM Numerous companies have undergone transformation and have not produced anticipated value. Lack of alignment and linkage to business purpose and business outcomes Compartmentalized process-driven transformations Inadequate attention to relationships (internal and external) Overlooking or discounting process and technology enablers Discussion Point: What are some of the other reasons companies do not realize expected value from transformations? What practices have you seen to help mitigate risks? 7

8 Importance of ODCM: Path to Success Focus on how it will work (not just how it looks) and assure support systems reflect the changes. Transformations based upon a best practice or growth have a better chance of succeeding than those aimed at cost cutting or facilitating a merger. The latter are more likely to destroy rather than create value. There are no standard models. Accommodate differences in: Industries Company strategies Culture Processes People Objectives 8

9 ODCM Approach An organization design and change management approach has six features which are imperative for successfully managing organizational change. Change Leadership Change Readiness Assessment Job Design Organization Design Change Management Organization Design Transition Management Organization Tools and Training Discussion Point: Beyond these six, what other features need to be present to ensure success? 9

10 Organizational Culture Is Qualitative Methods Reactive Loose standards People over process Financially-driven Limited use of information/haphazard approach to data collection Emotional Change resistant Decentralized Little collaboration Engineered Process-driven Metric-driven; focused on continuous improvement Data inundated Analytics-based Adapts to change slowly Centralized Forced collaboration Innovative Process-driven Performance managed; metrics support business strategy which drives behaviors that maximize profit Analytics and judgment Adapts to change easily Central/decentralized Discussion Point: Does the qualitative nature of ODCM complement or compete with data-driven cultures such as Lean and Six-Sigma? Can an organization be simultaneously successful at both? 10

11 Organizational Alignment Organizational Alignment to Business Strategy Is Qualitative and Quantitative S y n c h r o n i z e E x p e c t a t i o n s Demand- Driven Stores to Source - functions F/C to delivery - process Integrated One strategy/ teams/inclusive Knowledge/ Skills-Based Talent/sharing/best practices Performance Managed Right scorecard horizontal and vertical - Organization, team, individual Adaptive Flexible/Change Ready 11

12 Design and Decide What is the impact of the design? Process: Degree to which current processes must be modified and/or changed to adapt to each design? Impact on external processes? Technology: Can the required information flow and decision-making and planning needs be accommodated with current systems? Performance: How will the new design(s) improve performance? Significantly/modestly? Save resources/time/costs? Ease of Implementation: What barriers would we have to overcome to successfully implement? Qualify the relative effort and resources required for each alternative. Process Information and Technology Organization Performance Systems Present the options to all stakeholders and gain consensus. 12

13 Develop Alternatives: Three Fundamental Organizational Models FUNCTIONAL The traditional organization of functional units in vertical reporting structures Hybrid models are very prevalent adapt team roles, teamwork, and shared responsibilities. PROCESS The innovative model of organizing around business processes HYBRID Versions MATRIX The organizational model based on two or more roles with different reporting structures Discussion Point: What are some of the strengths and drawbacks to implementing ODCM in each of these organizational models? 13

14 Assess and Plan Discover & Review Benchmarks & Experience SWOT Strategy, design, people, process, technology/tools, performance management Benchmarks, supply chain organizational models, team and firm experience Synthesize the findings for clarity of understanding 14

15 Organizational Design Needs Change Management Without a focused people effort, most projects will experience project delays, missed return on investment (ROI), and/or loss of morale and productivity at all levels. 15

16 ODCM Reduces Both the Depth and Duration of Productivity Losses Performance Productivity During Transition Status Quo Personal 21% Transition Retraining 23% Gains Effective organization change management minimizes the depth and length of the loss in productivity Change Introduced Partially effective organization change management reduces the overall negative impact of the change and allows recovery Social/Gossip 19% Productive Work 60% Personal 21% Social/Gossip 40% Productive Work 16% Losses Change causes stress which results in lost productivity Ineffective or nonexistent organization change management allows the loss of productivity to worsen over time Time 16

17 Change Management Spans All Phases of the Redesign Plan Through Implementation Plan Design Implement Change Readiness Assessment Transition/ Communication Strategy Communication Plan Execute Plan Stakeholder Assessment Role Mapping Stakeholder Analysis High Level Impact Analysis (Who, what, when, where, how, how many) Change Readiness Survey Stakeholder Interviews Change Leadership Strategy Org/Job Role/ Governance Strategy Training Strategy Change Leadership Plan Org/Job Role Design Training Requirements Execute Plan Execute Plan Execute Plan 17

18 Concluding Thoughts Organizations, like business and markets, must evolve to remain relevant. Prepare employees to expect and adapt to ongoing change. Clear missions and change agents are critical to difficult evolutions. Collaboration is critical to accomplishing business and customer goals. Leverage cross-functional teams. Employees must see their organization as part of a larger entity in which all units and partners cooperate and act as one. Prepare for disruptions: Intelligent organizations anticipate change. Gather market intelligence and update contingency plans regularly. Intentionally develop organizational resilience starting from the upfront design. Build a team that believes in the mission and values of the organization. Demand-driven measures ensure the organization puts customer needs (internal and market) ahead of its own. Mitigate organizational risks by building a pipeline of talent and duplication. 18

19 Concluding Thoughts Organization follows strategy. Keep this alignment clear and compelling. Maintain uniformity and clarity. Responsibility and authority should not, for the most part, be separated. Best practices tell what and why. How we deploy those practices within our own environment determines our success. Adapt the principles to serve us, not vice versa. Culture, the ways in which we work, plays a key role in organization design. Play to our strengths. Organization must be (as much as possible) independent of personalities. The design must be sustainable even as people change roles. Organizations need to evolve as business realities and goals evolve. The design represents a long-term vision, yet we accept that tweaks will be required over time. Organizations must adapt. 19

20 Thank You! Valerie Bonebrake Paul Clayton 20