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Leading Organization Design: How to Make Organization Design Decisions to Drive the Results You Want

Book Description

Praise for Leading Organization Design

Designing organizations for performance can be a daunting task. Kesler and Kates have done an admirable job distilling the inherent complexity of the design process into manageable parts that can yield tangible results. Leading Organization Design provides an essential hands-on roadmap for any business leader who wants to master this topic." —Robert Simons, Charles M. Williams Professor of Business Administration, Harvard Business School

Kesler and Kates have encapsulated their wealth of knowledge and practical experience into an updated model on organizational design that will become a new primer on the subject." —Neville Isdell, retired chairman and CEO, The Coca-Cola Company

In today's world of global business, organizational design is a critical piece of long-term success. Kesler and Kates have captured multiple approaches to optimize global opportunities, while highlighting some of the keys to managing through organizational transition. A great read for today's global business leaders." —Charles Denson, president, Nike Brand

Leading Organization Design has some unique features that make it valuable. It is one of the few and certainly only recent books to take us through an explicit process to design modern organizations. This is accomplished with the five-milestone process. The process is not a simple cookbook. Indeed, the authors have achieved a balance between process and content. In so doing, Kesler and Kates show us what to do as well as how to do it."—Jay Galbraith, from the Foreword

Sheds light on the challenges of organization design in a complex enterprise and more importantly provides aninsightful and practical roadmap for business decisions."—Randy MacDonald, SVP, human resources, IBM

Table of Contents

  1. Copyright
  2. Foreword
  3. Introduction: Why Organization Design
    1. Organization Design Is a Leadership Competency
    2. Why Another Book on Organization Design?
    3. Our Point of View on Organization Design
  4. 1. The Five Milestones
    1. 1.1. Milestone One: Business Case and Discovery
      1. 1.1.1. Milestone: You are clear on the problem to solve
      2. 1.1.2. Clarify the Strategic Priorities
      3. 1.1.3. Define the Case for Change
      4. 1.1.4. Set the Design Criteria
    2. 1.2. Milestone Two: Strategic Grouping
      1. 1.2.1. Milestone: You have a basic structure choice that supports the strategy
      2. 1.2.2. Use the Six Design Drivers
      3. 1.2.3. Choose the Best Grouping Option
      4. 1.2.4. Embrace the Matrix
    3. 1.3. Milestone Three: Integration
      1. 1.3.1. Milestone: You have tied the pieces together and defined power relationships
      2. 1.3.2. Design for Operating Governance
      3. 1.3.3. Allocate Power in the Matrix: A Case Study in Governance
      4. 1.3.4. Redesign Functions to Be Integrators
    4. 1.4. Milestone Four: Talent and Leadership
      1. 1.4.1. Milestone: You have designed and staffed the critical roles and defined the work of the executive team
      2. 1.4.2. Design the Leadership Organization
      3. 1.4.3. Make the Right Talent Choices
    5. 1.5. Milestone Five: Transition
      1. 1.5.1. Milestone: You are leading the change and are prepared to measure, learn, and adjust
      2. 1.5.2. Set the Implementation Plan
      3. 1.5.3. Navigate the Transition
    6. 1.6. Chapter One Summary: The Five Milestones
  5. I. Milestone One: Business Case and Discovery
    1. 2. Clarify the Strategic Priorities
      1. 2.1. Business Problems and Opportunities
        1. 2.1.1. 1.A Significant Change in Strategy Has Occurred
          1. 2.1.1.1. The Company Becomes Global
          2. 2.1.1.2. The Business Model Shifts
        2. 2.1.2. 2.Execution Gaps Increase Due to Outdated Organization Arrangements
          1. 2.1.2.1. Decisions Are Slow, Resources Are Poorly Allocated, and Role Confusion Is High
          2. 2.1.2.2. The Company Can't Afford What It Has
          3. 2.1.2.3. Acquisitions Must Be Integrated
        3. 2.1.3. 3.A Change in the External Environment Demands a Response
          1. 2.1.3.1. Competitor Action
          2. 2.1.3.2. A Regulatory Shift
          3. 2.1.3.3. Gain in Customer Power
        4. 2.1.4. 4.Structure Limits the Ability to Innovate
        5. 2.1.5. 5.A New Leader Arrives
      2. 2.2. The Strategy Canvas—Calling out the Strategic Priorities
    2. 3. Define the Case for Change
      1. 3.1. Why an Assessment
        1. 3.1.1. Define the Problem to Be Solved
        2. 3.1.2. Surface Good Ideas
        3. 3.1.3. Identify Resistance and Differences in Perspectives
        4. 3.1.4. Create Shared Understanding
        5. 3.1.5. Start the Change Management Process
      2. 3.2. Who Should Be Included
      3. 3.3. Analyzing the Data—the Six Design Drivers
        1. 3.3.1. Management Attention
        2. 3.3.2. Leveraged Resources and Cost
        3. 3.3.3. Coordination and Integration
        4. 3.3.4. Specialization
        5. 3.3.5. Control and Accountability
        6. 3.3.6. Learning and Motivation
      4. 3.4. Applying the Drivers in Assessment
    3. 4. Set the Design Criteria
      1. 4.1. Agility
      2. 4.2. External Benchmarking
      3. 4.3. How to Set Capabilities as Design Criteria
    4. Milestone One Summary: Business Case and Discovery
  6. II. Milestone Two: Strategic Grouping
    1. 5. Use the Six Design Drivers
      1. 5.1. The Building Blocks
      2. 5.2. The Six Design Drivers
        1. 5.2.1. Management Attention
        2. 5.2.2. Leveraged Resources and Cost
        3. 5.2.3. Coordination and Integration
        4. 5.2.4. Specialization
        5. 5.2.5. Control and Accountability
        6. 5.2.6. Learning and Motivation
    2. 6. Choose the Best Grouping Option
      1. 6.1. Organizational Archetypes
      2. 6.2. New Approaches to Geographic Organization
        1. 6.2.1. Emerging Market Focus
        2. 6.2.2. Optimization of Geographic Portfolio Management
        3. 6.2.3. Cultural, Language, and Geopolitical Adjacencies
        4. 6.2.4. External Partner Structures and Location
        5. 6.2.5. Concentration of Revenue, People, and Assets
      3. 6.3. When Options Appear Equally Valid
        1. 6.3.1. Degree of Change
        2. 6.3.2. Primacy
        3. 6.3.3. Management's Capacity for Complexity
        4. 6.3.4. Biggest Impact
        5. 6.3.5. Most Visible to Customers
        6. 6.3.6. Fits the Existing Culture
        7. 6.3.7. Forces a Change to the Existing Culture
    3. 7. Embrace the Matrix
      1. 7.1. Making Strategic Grouping Choices in a Matrix
        1. 7.1.1. Matrix Type 1: Function Versus Business Unit
        2. 7.1.2. Matrix Type 2: Front End (Geographic Unit or Customer) Versus Back End (Product or Function)
        3. 7.1.3. Matrix Type 3: Global Customer or Product Line Versus Local Geographic Unit
      2. 7.2. Case Example: Using Strategic Grouping to Build Multiple Capabilities
    4. Milestone Two Summary: Strategic Grouping
  7. III. Milestone Three: Integration
    1. 8. Design for Operating Governance
      1. 9.1. Operating Models
      2. 9.2. Governance Levers
        1. 9.2.1. Governance of the Matrix
          1. 9.2.1.1. Beliefs
          2. 9.2.1.2. Networks
          3. 9.2.1.3. Boundaries
          4. 9.2.1.4. Diagnostic Measures
        2. 9.2.2. When to Work the Levers
    2. 9. Allocate Power in the Matrix: A Case Study in Governance
      1. 10.1. The Beliefs Lever at ABI
      2. 10.2. Interactive Networks at ABI
      3. 10.3. Boundaries at ABI
      4. 10.4. Diagnostic Measures at ABI
    3. 10. Redesign Functions to Be Integrators
      1. 11.1. The "Problem with Corporate"
      2. 11.2. The Value Delivery Framework for the Corporate Center
        1. 11.2.1. Function Oversight and Strategy
        2. 11.2.2. Thought Leadership
        3. 11.2.3. Selected Services
      3. 11.3. Center-Led Versus Centralized
    4. Milestone Three Summary: Integration
  8. IV. MILESTONE FOUR: Talent and Leadership
    1. 11. Design the Leadership Organization
      1. 12.1. Define the Top-Level Reporting Structure
        1. 12.1.1. Options for Direct Report Structures
        2. 12.1.2. The Matrixed Executive Team
      2. 12.2. Design the Roles of Leaders
        1. 12.2.1. Leadership Pipeline
        2. 12.2.2. Organization Levels and Layers
        3. 12.2.3. Span of Control
        4. 12.2.4. Span-Breaking Roles
        5. 12.2.5. Measures for Leadership Roles
      3. 12.3. Design the Work of the Executive Team
        1. 12.3.1.
          1. 12.3.1.1. Operating Decisions Forum
          2. 12.3.1.2. Management Synergies Forum
          3. 12.3.1.3. Portfolio Management Forum
          4. 12.3.1.4. Relationship-Building Forum
    2. 12. Make the Right Talent Choices
      1. 13.1. Staff the Talent Pivot Points
      2. 13.2. Repurpose Resources
      3. 13.3. Design the Organization to Grow Leaders
      4. 13.4. Case Study—Talent and Organization
    3. Milestone Four Summary: Talent and Leadership
  9. V. MILESTONE FIVE: Transition
    1. 13. Set the Implementation Plan
      1. 14.1. Defining a Destination
      2. 14.2. Staging and Pacing the Major Tasks
        1. 14.2.1. The "Big Bang" Versus Phased Approach
        2. 14.2.2. Does a Pilot Make Sense?
        3. 14.2.3. Sequencing the Transition
        4. 14.2.4. Examples of Transition Planning
          1. 14.2.4.1. The Systems Integrator
          2. 14.2.4.2. The Power Plant Contractor
    2. 14. Navigate the Transition
      1. 15.1. Leading Transition—the Work
        1. 15.1.1. First Thirty to Ninety Days: The Launch
          1. 15.1.1.1. Align Expectations
          2. 15.1.1.2. Set the Management Routines
          3. 15.1.1.3. Charter Necessary Networks and Councils
          4. 15.1.1.4. Align Designs and Missions of Each Subunit
          5. 15.1.1.5. Set the Metrics
          6. 15.1.1.6. Finalize Decision Rights and Communicate
          7. 15.1.1.7. Launch Work Streams
          8. 15.1.1.8. Manage the Staffing Process
          9. 15.1.1.9. Cascade and Link New Business Objectives
        2. 15.1.2. Months Three to Six: Momentum
        3. 15.1.3. Months Six to Twelve (and Beyond): Learning and Adjusting
      2. 15.2. Tipping Points
    3. Milestone Five Summary: Transition
  10. VI. CONCLUSION: Organization Design in Action
    1. 15. Roles, Involvement, and the Project Timeline
      1. 16.1. Key Roles
        1. 16.1.1. Leader
        2. 16.1.2. Sponsor
        3. 16.1.3. Executive Team
        4. 16.1.4. Human Resources
        5. 16.1.5. Organization Development and Effectiveness
        6. 16.1.6. Core Team
      2. 16.2. Involving the Right People in the Process
        1. 16.2.1. The Expert Model
        2. 16.2.2. Executive Team as Design Team
        3. 16.2.3. Delegated Design Team
        4. 16.2.4. Multilevel Design Team
      3. 16.3. Project Timeline
      4. 16.4. Building Organization Design Capability
        1. 16.4.1. Methodology
        2. 16.4.2. Skilled HR and OD Staff
        3. 16.4.3. Organization Design Consulting Skills
          1. 16.4.3.1. Diagnostic and Analytic Skills
          2. 16.4.3.2. Deep Curiosity About Organizations as Systems
          3. 16.4.3.3. Design Mind-Set
          4. 16.4.3.4. Pattern Recognition
          5. 16.4.3.5. Consulting and Facilitation Skills
    2. 16. The Design Charette
      1. 17.1. Definition of a Charette
      2. 17.2. Who Should Participate in the Charette?
      3. 17.3. Decision Process
      4. 17.4. Charette Plan
        1. 17.4.1. High-Level View of the Design Charette Agenda
        2. 17.4.2. Pre-Charette Assignment
        3. 17.4.3. First Morning: Creating a Common Understanding
          1. 17.4.3.1. Welcome
          2. 17.4.3.2. Assessment Feedback
        4. 17.4.4. Strategy and Data
        5. 17.4.5. Design Criteria
        6. 17.4.6. Models
        7. 17.4.7. First Afternoon: Generating Options
        8. 17.4.8. Starting Point and Parameters
          1. 17.4.8.1. Design Generation
        9. 17.4.9. Sharing and Evaluation
        10. 17.4.10. Second Morning: Reviewing, Revising, Detailing
          1. 17.4.10.1. Review
          2. 17.4.10.2. Detailed Design
          3. 17.4.10.3. Sharing
        11. 17.4.11. Second Afternoon: Planning and Communication
          1. 17.4.11.1. Work Streams
          2. 17.4.11.2. Next Steps
          3. 17.4.11.3. Communication
        12. 17.4.12. Planning and Logistics
          1. 17.4.12.1. Planning Team
          2. 17.4.12.2. Facilitators
          3. 17.4.12.3. Administrators
          4. 17.4.12.4. Logistics
      5. 17.5. Transition Leadership
      6. 17.6. Measuring Success
        1. 17.6.1. Business Outcomes
        2. 17.6.2. Client Satisfaction
        3. 17.6.3. Project Discipline
        4. 17.6.4. Internal Working Relationships
        5. 17.6.5. Learning
    3. 17. Learning to Lead Organization Design
      1. 18.1. The Intersection of Talent and Organization
      2. 18.2. Building General Managers' Organization know-how
        1. 18.2.1. Learn by Doing
          1. 18.2.1.1. Learn by Making Design Decisions
          2. 18.2.1.2. Learn by Leading Major Change in Organization Design
        2. 18.2.2. Provide Support During the Development Experience
  11. References
  12. About the Authors