Archive for April, 2011

Clients frequently don’t want to take the time to assess their organization’s leadership alignment. My experience is that the assessment always provides some new insights. One such client was a division of a large conglomerate. The 2008 economic recession had hurt their industry particularly hard. The CFO had been aggressively cutting costs and the business began to implement new systems from SAP to support their business.

When asked, “Why are you implementing SAP,” nearly 100% of their top management had one of two answers. “Our corporate parent wants us to standardize on a common system.” Alternatively, “The finance department needs better reporting to help us manage our costs better.” Both answers, however, were wrong.

This business had already cut its costs nearly to the bone and was under no pressure to standardize. The CFO was enabling the business to have a more vertically integrated supply chain. They needed a new supply chain so they could compete more effectively with imported product. Their huge effort wasn’t about costs, it was about revenue.

Had the client not uncovered this misalignment, their leadership would have faced significant challenges. The team would have been working to deliver the wrong business model and processes. With this new understanding of how the leadership was oriented to think, the business was able to head in the right direction a lot sooner and with less friction along the way.

First things first: the right people can make any organization structure work, but these situations are usually the exception. The general rule is that an organization aligns to a common set of objectives, and those objectives can be in conflict with another organization’s objectives. An easy way to think about this is a sales team wants to sell many units at any price. A marketing or finance organization is more interested in selling units at a profitable price.

In thinking about an I.T.-oriented change initiative, there is a similar tension between organizational objectives. The Information Technology group is typically driven by objectives such as cost, project timelines, information security while they meet the needs of their internal clients. Those internal clients, frequently the owners of a particular business process, place a lower value on I.T.’s objectives. Process owners are most concerned about employee effectiveness and efficiency. A process owner will frequently trade away short-term costs for long-term gains in productivity.

In thinking about a typical organizational change manager’s work, it is clear that they are most closely aligned with the process owner. It goes to follow that having the change manager report to the I.T. organization mis-aligns interests. It becomes too easy for the cost and time-driven IT manager to stifle input from the change management team. The voice of the organization is never heard.

It makes far more sense for the change manager to have a direct reporting relationship to the business sponsor that is accountable for the success of the project. Granted they typically don’t want multiple project direct reports, but it has been my experience that they will be much more interested in talking about business and organizational issues than the status of integration testing and data cleansing routines. The sponsor needs to play an active role in leading the project and needs to be constantly up-to-date on the business and organization issues being caused or cured by the project. There can be no better place for the change manager to be.

Consider putting these checks and balances in your next project governance structure.

It must be fascinating to work at US Airways.

Did You Really Need to Take the Miles Back?

Okay – I agree the headline is over the top, but I couldn’t figure out a simple way to communicate a simple topic. If you’d like to know a bit more about change management and how its concepts could apply to your situation, drop us a note at blog (at) thebrooksidegroup.com. Your response might be a little slow if you are a college student working on a paper, but if you have a real challenge, we can both gain by having a conversation.