CH' 9, GETTING THERE

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CH. 9, GETTING THERE

• By Stephen M. Shapiro

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• I. INITIATING CHANGE
• A. CHANGE IS THE OXYGEN NEEDED TO GROW
• Successful business needs to change to survive
• Constant innovation is best
• Stop-and-go change leaves employees fatigued
• Goalposts keep moving farther away
• Intense upheaval, followed by lassitude is
  enervating
• Make innovation pervasive in organizationcore
  competence
• Parts of organization may change atdifferent
  rates
• Routine operations easy to streamline,changed
  first
• Complex operations hard to change,changed last

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• B. PROCESS OF INTRODUCING CHANGE
• Isolated manager introduces change in one area
• Benefits of change become apparent
• Owner of the new business process gains more
  power
• Organization becomes hybrid
• 2 perspectives
• Old, silo perspective
• New, process approach
• Owner becomes dominant partywith full
  responsibility
• Processes are dominant overfunctions
• Processes evolve into Capabilities
• Capabilities are linked for optimal performance

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• C. STAGES OF ORGANIZATIONAL MATURITY
• Functionally bound silos, little connection to
  each other
• Process-sensitive process laid over silos,
  functions still dominate
• Process-driven processes emerging as key drivers
  of business
• Process-dominated processes are the primary
  drivers
• Capability-based Capabilities are primary driver
  of business
• Alliance-based focus on Capabilities and
  sourcing strategies and alliances

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• II. FROM FUNCTIONS TO ALLIANCES
• A. THE FUNCTIONALLY BOUND ORGANIZATION
• Getting things done rather than creating value
  for customer
• Work takes place in departments
• Hierarchies abound and seniority really matters
• Fiefdoms operate in isolation
• Numerous high-cost non-value-adding activities
• Processes are undocumented and not explicitly
  assigned

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• B. PROCESS-SENSITIVE ORGANIZATION
• No longer competitive
• Processes defined
• Champion has emerged who is going to lead
  transition
• Process veneer stage only limited impact on
  organization
• Change initiatives and cross-functional teams
• Some outright resistance to change
• C. PROCESS-DRIVEN ORGANIZATION
• Implementation of process designs in number of
  areas
• Managed by both functions and processes
• Resources owned by functions
• Employees need to learn more skills of teamwork
  and change
• Process owners have responsibility of change, but
  dont own the resources

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• D. PROCESS-DOMINATED ORGANIZATION
• High-performing organization is able to compete
  on sustainable basis
• Processes continually being refined and improved
• Process owner has become king or queen
• Old-style functions have been disbanded
• Innovative thinking pervades organization
• Change takes place organically
• Everyone is focused on serving the customer
• Employees are viewed ascritical resource
• Business is operated holistically
• Interdependencies betweenprocesses well
  understood

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• E. CAPABILITY-BASED ORGANIZATION
• Firms compete on basis of Capabilities
• Capabilities represent building blocks of
  competitive advantage
• Aligns all components of capability
• Integrates all aspects of business to achieve
  high performance
• F. ALLIANCE-BASED ORGANIZATION
• Competes on basis of Capabilities
• Mix of owned, and allied or outsourced
  Capabilities
• Capabilities can be measured, managed, and
  integrated
• Related activities are kept in alignment
• Single leadership and culture linked withcommon
  IT platform
• Capabilities are networked in plug-and-playarchit
  ecture
• Divest Capabilities which dont create value

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• G. ALL THE WORLDS AT A STAGE
• All companies dont go through all stages
• Brand management firms stop at process-driven
  stage
• III. SOME USEFUL TIPS
• A. NEED COMMITMENTFROM TOP MANAGEMENT
• 1. Need for a Burning Platform
• 2. Need to Educate all Employees about Processes
  and Capabilities
• 3. Use the New Orientation to Bring Mangers
  Closer to Customer
• 4. Leadership from the Top Ensures a Successful
  Outcome
• 5. Buy Expertise that You Do Not Already Have
• 6. Communicate Clearly, Continuously, and
  Repeatedly

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• 7. Try to Build in Safeguards that Prevent the
  Organization from Taking Backward Steps
• 8. Manage the Transition as a Series of Pilot
  Schemes
• 9. One Size Does Not Fit All
• 10. Target Process Owners Early On
• IV. THE IMPORTANCE OF BUSINESS CAPABILITIES
• A. ONLY FIRMS THAT EMBRACE INNOVATION AS CORE
  CAPABILITY WILL SURVIVE
• Capability collection of closely
  interrelatedcomponents that deliver high
  performance
• Takes long time to build up
• Represents formidable core competence

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• V. LEADERS BECOME FOLLOWERS
• A. IN TODAYS ENVIRONMENT
• Change can make firm uncompetitive
• Need to change business regularly
• May need to migrate to new industry
• Need passionate leadership
• Need culture of innovation
• Need to launch changes rapidlyburning platform
• Change needs to be fundamentaland pervasive