Organization transformation castle

1. Organization Transformation
by Dian K. Castle, CPT
Overview
The 270-member System of the world’s largest quick service business is located at corporate
headquarters and has worldwide responsibility for learning and development, menu and operating
system development, store systems, site development, purchasing and supply chain, business
research and development, and equipment systems. They serve as a type of shared-services
organization; they supply these services worldwide, including U.S. restaurants and the partner
brands. In other words, the System consists of five functions, also called centers of expertise--
RD, BR, SCM, Operations, and Innovation--working together to grow and support the core
business, partner brands, and new business ventures by setting strategy and standards,
providing tools and systems, exchanging knowledge, and scaling products and service worldwide.
Using this approach, the System achieves its strategic intent of partnering with its restaurants to
create the world’s best customer experience; it enables restaurants to deliver the enterprise’s
brand promise.
The Business Challenge
Early in 2001, the System reformed its business model, moving from a functional organization to
a matrix organization. The structure resembled a three-pronged stool: (1) functions that provided
deep expertise and linkage to the field and served as a homeroom for career development; (2)
cross-functional platform teams, such as the Chicken Team, that designed and implemented
strategic initiatives in an integrated manner; and (3) cross-functional process teams that focused
on enhancing the capability of the processes of the current restaurant, the primary focus of the
enterprise’s brand. This transformation required the System to change not only its structure, but
its processes, values, and beliefs. The new business model linked the System’s core capabilities
and allowed it to leverage high impact, holistic, and integrated solutions that secured its
partnership with the restaurants. To assist with this transformation so that it could enable a higher
level of strategic support and create explicit and demonstrated value on the business, the System
contracted with New Orleans Consulting (NOC). The System turned to consultants to assist in
building a business capability that continually develops and implements accelerated and
sustainable innovative solutions to meet global business challenges in local world markets. In
other words, New Orleans Consulting was helping the System to operationalize its strategic
intent. This was an organizational transformation engagement, and success would be solely
determined by the capability of the System and its leaders to manage change!
The Solution
In May 2001, consultants and the System leadership began their collaborative partnership by
interacting with the five teams created by the new structure and helping them to fulfill their
missions. These five teams were the Restaurant Capability Team, the Chicken Platform Team,
the Transition Team, the S&G Group Design Team, and the Implementation and Transmission
Team. A sixth group, the Strategy and Governance Team (S&G Group), comprised the five heads
of the CoEs and the chief executive of the System, and this group owned the ongoing knowledge
of the business and the focusing of choices. The restaurants would measure their success
through increased TCs, CCs, sales, and cash flows. By creating consistently executed standards,
and by developing superior scaling speed, collaboration, knowledge exchange, and the
integration of strategies and processes, the System would increase its effectiveness and improve
how it works, and these results would be reflected in the restaurants’ success.
Conclusion
To ensure that the benefits of the new business model were realized, employees and their
leadership had to do different things, make different decisions, and perform differently. Hence,
HR and management systems were changed to reflect and support the new way of doing things.
These HR systems included performance management, succession management, rewards and
recognition, and learning and development. The behavioral element was critical in converting the
resistance toward a change to support for that change. The outcome resulted in a new culture,

2. characterized by new values and behaviors, which institutionalized the change. Not only did the
new business model impact the System, but it also affected the areas of the world, the regions,
and the restaurants themselves. All of these stakeholders were partners in delivering the
enterprise promise to its customers. To effect the change, New Orleans Consulting enabled the
System in becoming a change agent; the System became proficient at managing stakeholder
emotions and risk, building teams and commitment, communicating, and coaching and
developing people. The voice of the people was the common ground and the foundation upon
which the System created its vision.
Successful change necessitates generating and harnessing increased energy to keep the
organization performing while its capacity for the new environment is being developed. This
creates the need for building and fostering high-performing change teams, a need which received
particular attention in the System owing to the requirement of spanning many boundaries.
Although the Transition Team was primarily charted to manage this transition process, the other
teams bore responsibility for building this new capacity as well. This process was very arduous
because of the natural resistance to change. Yet, as they forged along this journey, eliminating
those barriers to change that existed in the lack of alignment and the HR and management
practices and systems, support for the new business model increased. The new the System,
enabled by New Orleans Consulting, moved toward institutionalization.
Organizational transformation is significant change. Current best practices are merely steps along
the path of the change management journey. Existing paradigms are continually tested and
retested in the search for excellence. The executive of today’s organization must be able to
reconcile the paradoxical demands of creating, leading, and managing change. New Orleans
Consulting’s change management model, methodology, and consultants allowed the System to
charge forward on its journey in institutionalizing the new business model that would provide
future success and benefits realization. The System, through partnership with the restaurants,
created the world’s best customer experience.
Business Capsule
The Challenge
The challenge was to enable the System to institutionalize the significant change incurred in
adopting a new business model--moving from a functional organization to a matrix organization.
Managed the process of change involved in institutionalizing the new business model
Aligned culture with strategy
Developed senior executive leadership capability to perform the sponsor role of change
Enabled teams to be change agents and implement the change
The Benefits
The System achieved its strategic intent of partnering with its restaurants to create the world’s
best customer experience; it enabled restaurants to deliver the brand promise.
Built the foundation for a business capability that continually develops and implements
accelerated and sustainable innovative solutions to meet global business challenges in
local world markets
Redesigned the organizational structure, jobs, and accountability measures to enable
new performance and changed behaviors to occur
Methodically trained and developed leadership and employees to attain the required skills
and behaviors required in the new business model
NOC Role
Coached client teams through their specific roles to manage the change in the System so as to
reduce the resistance for the new business model and increase the support for it.

3. Enabled alignment among the stakeholder populations for the new business model
Managed the interdependencies that existed between the situation, strategy, culture, and
leadership styles in implementing the change
Designed and facilitated learning interventions to build change management capability
within the sponsorship and teams
Reshaped the performance management system, succession planning system, and
rewards and recognition systems to support and sustain behaviors required in the new
organization
Developed communication strategies and plans that demonstrated executive
management commitment
Involved the stakeholders and gained their commitment to change
Created and implemented a system to track benefits of the new business model