Designing Organizations Nancy Truitt Pierce TELA Program May 2009 I am delighted that you have given me a podium a mic. and your attention to talk about a topic I find endlessly and addictively interesting. Talking about Growing a Robust Business is my favorite topic in the whole world. In fact I'm completely ruined for almost any other conversation. Especially where it relates to stages of growth and how to manage through it. I plan to cover several aspects of the growth question today … Starting with the end in mind (as Stephen Covey suggests!) Then I will spend some time on the Fantasy vs. the Reality of growth Three of the ways organizations grow and the stages of growth businesses go thru. (There are a couple others, like stages of funding, that I won’t touch on) By then some of you will be saying, yeah, yeah, yeah, but we do we DO about it. Which is the only question that really matters and THE POINT of all the rest. Because the KEY issue in growing organizations is figuring out what is the BEST thing to DO on any given day to move closer to the goal. It’s ultimately about TIME and how best to use it. © Woods Creek Consulting, 2009

Designing Organizations The STAR Model Stage and Strategy Pivotal Position Theory Five Structures Application of Various Structures Pros and Cons of Each I plan to cover several aspects of the growth question today....Starting with the end in mind (Covey would be so pleased!) we will briefly describe the goal of growing a robust business - to build an effective Organization. If we don't know where we are headed, the rest doesn't really matter, after all. Next we will look at the Fantasy vs. Reality of growth Then we will spend some time on the three ways that organizations grow and The stages of Growth businesses go through. By then,some of you will be saying, "Yeah, yeah, yeah, enough of the theory, Nancy - what do we DO about it! Which is the only question that really matters and THE POINT of all the rest. Because the KEY issue in a growing organization is figuring out what is the BEST thing to DO on any giving day to move closer to the goal. It's ultimately all about TIME and how best to use it. So we will end up with...What to watch for and WHAT TO DO! My hope is that you will leave this talk a little smarter and a little more armed for the journey you are on on. NEXT SLIDE © Woods Creek Consulting, 2009

Star Model by Jay Galbraith © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 Purpose of Structure Structure is about the flow of information and learning And the allocation of time, energy and resources (decisions) needed to achieve the strategy! © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 Organize When you have over 25 people (Scope) Based on Strategy first Each type is appropriate for Certain Situations Each type has Limitations © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 Strategy What business are you in? What is your strategy? What are the keys to your success? © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 Departmentalization Function or Specialty Product Line Customer Segment Geographical Area Work Flow Process © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 Examples Function or Specialty – The classic organization Product Line – Hewlett Packard (Printer Division) Customer Segment – Boeing (Commercial, Military) Geographical Area – FedEx (Regions) Work Flow Process – Continental Mills (dry goods, frozen foods) © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 Functional Structure Pros Transfer of Knowledge Contacts with Peer Specialists Greater level of Specialization Cons Doesn’t scale for additional product lines Inhibits cross functional collaboration © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 Product Structures Pros Compress Product Development Cycles Create Diverse Product Strategies Cons Builds Turf Wars Decreases Efficiencies in Resource Utilization © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 Market Structures Pros Increase Market Knowledge (Segments) Target Product Development Cons Builds Turf Wars Decreases Efficiencies in Resource Utilization © Woods Creek Consulting, 2009

Geographical Structure Pros Proximity to Customers Increased Cost Efficiency for Distribution Local Knowledge Cons Creates Communication Challenges Decreases Efficiencies in Resource Utilization © Woods Creek Consulting, 2009

Departmentalization for IT Application Development Telecom Desk Top Help Desk Data Management Outsource Management © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 IT Organizations Ways to Organize the IT Department Functionally By business unit By geo Centralized De-Centralized Matrixed / hybrid © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 Summary There is no perfect organization No matter what you do, there will be problems Some work better for your stage, strategy and business Choose the best and back fill the problems I plan to cover several aspects of the growth question today....Starting with the end in mind (Covey would be so pleased!) we will briefly describe the goal of growing a robust business - to build an effective Organization. If we don't know where we are headed, the rest doesn't really matter, after all. Next we will look at the Fantasy vs. Reality of growth Then we will spend some time on the three ways that organizations grow and The stages of Growth businesses go through. By then,some of you will be saying, "Yeah, yeah, yeah, enough of the theory, Nancy - what do we DO about it! Which is the only question that really matters and THE POINT of all the rest. Because the KEY issue in a growing organization is figuring out what is the BEST thing to DO on any giving day to move closer to the goal. It's ultimately all about TIME and how best to use it. So we will end up with...What to watch for and WHAT TO DO! My hope is that you will leave this talk a little smarter and a little more armed for the journey you are on on. NEXT SLIDE © Woods Creek Consulting, 2009

© Woods Creek Consulting, 2009 Group Exercise Share your Org Chart: For the company Titles in the boxes (no names necessary) For the IT Org Titles in the boxes and where you are What are the pros and cons of each? What issues are you trying to resolve? What org changes MAY solve those? © Woods Creek Consulting, 2009

©Woods Creek Consulting Company, 2009 The Mentors Our Questions Their Career Path Insights and tips to get and keep a CIO job How CIO is different from other levels How they spend their time Be thinking of other questions you want them to answer ©Woods Creek Consulting Company, 2009

© Woods Creek Consulting, 2009 Homework for TELA Prep for Next Week Come up with a real business problem TELA group votes on them Pick the top three to work on Lunch with your team mates Fill out the interview form Develop your Personal Plan Based on the 360 Complete the Evaluation for today © Woods Creek Consulting, 2009