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How to simplify acomplexorganizationNicolay Worren, PhDwww.organizationdesign.net
Organizations today are multidimensional                    1960                                                    2012  ...
Gettings things done requires intensive collaboration –but one sometimes forgets cost and capacity limits                 ...
Collaboration is particularly challenging across theinterfaces in a matrix structure                                      ...
Employees experience the consequences of increasingcomplexity on an every day basis            Information                ...
Surveys confirm that organizational leaders now viewcomplexity as a major challenge                         “What is the l...
There is also a growing recognition that theorganizational structure may contribute to complexity                         ...
The first step in a simplification process should be toevaluate the current situation and set improvement targets         ...
One should examine unit mandates and ensure that eachunit has a clear purpose and a distinct role                         ...
An internal customer-supplier model is an alternative tothe matrix that simplifies reporting relationships Units/roles tha...
It’s also crucial to design a formal structure that is alignedwith the work processes (and vice versa)                Out ...
More information      For more information:      http://www.organizationdesign.net/who-is-this-blog-for/bookorganizationde...
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How To Simplify A Complex Organization

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High-level presentation discussing the challenge of how to simplify large and complex organizations. If you are interested this topic, you can subscribe to receive updates from my blog http://www.organizationdesign.net

My book is available from Amazon.co.uk:
http://www.amazon.co.uk/Organisation-Design-Dr-Nicolay-Worren/dp/0273738836/ref=sr_1_1?ie=UTF8&qid=1368539550&sr=8-1&keywords=Worren

Published in: Business, Technology

How To Simplify A Complex Organization

  1. 1. How to simplify acomplexorganizationNicolay Worren, PhDwww.organizationdesign.net
  2. 2. Organizations today are multidimensional 1960 2012 CEO CEO CEO Shared Services Product A Product B Region A Region B HR Engineering Country A1 Production Marketing IT Product B Accounting Product A Country A2organizationdesign.net 2
  3. 3. Gettings things done requires intensive collaboration –but one sometimes forgets cost and capacity limits 110 ∆ = 20 100 90 80 70 Number of potential 60 bilateral interdependencies 50 40 30 20 10 ∆=4 0 0 1 2 3 4 5 6 7 8 9 10 11 Number of employeesorganizationdesign.net 3
  4. 4. Collaboration is particularly challenging across theinterfaces in a matrix structure Example Product A Product B Product C Region A Whose goals do we prioritize? Who resources what? Region B Who makes what decisions? Who’s accountable for what? Region Corganizationdesign.net 4
  5. 5. Employees experience the consequences of increasingcomplexity on an every day basis Information Unclear More time in overload accountability meetings ”We know who is Corporate e-mail traffic responsible for solving (billions of messages per year) key business problems in 35 our unit” 30 25 40% 30% 30% 1960 20 15 10 NO YES 5 0 Typical result in employee 2003 2004 2005 2006 surveys in large corporations 1982organizationdesign.net 5
  6. 6. Surveys confirm that organizational leaders now viewcomplexity as a major challenge “What is the level of complexity in your organization today compared to three years ago?” The same Source: Global PwC CEO 17% Somewhat lower survey 2007 6% Much lower Higher 2% 50% N= 1400 27% Much higher “Are you experiencing a high level of complexity?” Currently Source: Global IBM CEO 60% 40% study 2010 Over the next five years N= 1500 79% 21%organizationdesign.net 6
  7. 7. There is also a growing recognition that theorganizational structure may contribute to complexity “Our organizational structure is contributing to an increase in the complexity in our firm” Source: Economist Intelligence Unit Disagree Agree Survey 2011 43% 57% N= 300organizationdesign.net 7
  8. 8. The first step in a simplification process should be toevaluate the current situation and set improvement targets Example  = Today  = Where we should be To a great Our decision processes enable us to Not at all extent respond quickly to changes in the external market To a great Feedback from our employees suggest that Not at all extent there is clarity with regard to roles and responsibilities in our organisation To a great The goals pursued by different functions Not at all extent and units in our organization are complementary To a great Our productivity measured per Not at all extent employee is as good or better than the average for similar companiesorganizationdesign.net 8
  9. 9. One should examine unit mandates and ensure that eachunit has a clear purpose and a distinct role Example - Units -Unit mandate Mngtm team Corporate staff Shared Services Create strategy X Develop policies X ? Provide support to X business units ?organizationdesign.net 9
  10. 10. An internal customer-supplier model is an alternative tothe matrix that simplifies reporting relationships Units/roles that deliver Units/roles that develop Units/roles that market internal support services and deliver products or and sell products or or resources to product services to end services units customer Requests Requests Requests Delivers Delivers Sells Support service product product Products Region Customer servicesorganizationdesign.net 10
  11. 11. It’s also crucial to design a formal structure that is alignedwith the work processes (and vice versa) Out Before Example In In Out After 11
  12. 12. More information For more information: http://www.organizationdesign.net/who-is-this-blog-for/bookorganizationdesign.net 12

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