Organization Reset – Different perspective for Transformation & Turnaround

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Rajiv SondhiMr.Rajiv Sondhi – is Director of Enterprise & Data Architecture at Under Armour; He received his MSIT at Carnegie Mellon University.

As we wind up a great year, 2015 is going to be year where CXO, board and executives, will continue to operate vigilantly with renewed discipline, reviewing their business models, product and service portfolios. They will continue defining and refining their perspectives through a lens that ensures creation of values for customers and stakeholders, ensuring alignment with their core competencies and growth strategies. These on-going perspectives will result either in continuation of the same, or it will kick-off new endeavors to re-organize and/or re-structure. Change is continuous, and it is painful, despite our best efforts and intentions, and its results can vary drastically. Ford Motor Company, under the leadership of Alan Mulally, reflects on a successful transformation of the company’s operations, while Apple’s turnaround serves as a reminder of the legendary leadership of Steve Jobs. At the same time, there are examples where

companies change/restructuring plan didn’t yield expected results. Chrysler restructured three times in three years but couldn’t avoid filing bankruptcy. BlackBerry was once an undisputed leader in Mobile devices, and JC Penny’s is one of the most recent examples that is struggling and trying to recover from its transformation efforts.

There are numbers of transformation and turnaround strategies with their own focus areas and guiding principles, and by no means am I qualified enough to comment on the effectiveness of those strategies. My point of view leverages and is drawn from how things operate around us. Drawing inferences from the aforementioned companies and their outcomes, let’s explore Organization Reset.

What is Reset?

Reset is different from restructuring; however one can debate that there are commonalities between Organization Reset and Restructure. In Restructure there are no predefined baselines, and all options are open.
This often leads to increased complexity, unmanageable scopes, resulting in increased changes of less than desirable results. However, in Reset, you always leverage your known steady state, acting as your baseline (i.e. factory defaults), which identifies the scope and manages the complexity around it. Operations, processes and metrics of the steady state often act as your guiding principles

Reset in organization’s context does sound crazy and may be impossible. Why will organizations execute ‘Reset Strategy’? Let’s change the context from organizations to ourselves. I am positive that at one point in time you have done Reset. How many times we have reset (restore to factory defaults) on smart phones, tablets and various other gadgets? Still some skepticism, well we reset our watches twice a year for day light savings. Remember, reset is different than restructure. We reset our watches but we do not restructure them, as we do not swap minutes and hour hands nor change the dial. For example, Toyota Motor Company has often been referred to as the gold standard of the automotive and Toyota Production System. It has been leveraged as a hallmark across various industries. As Toyota was enjoying the aggressive growth, it did create an unmanageable risk, the 2010 debacle involving acceleration issues. Toyota took an approach of pressing the ‘Reset’ button i.e. going back to their basics and making organizational changes that leverages it strong quality, supply chain and accountability culture.

Why Reset?

Let’s identify some of the scenarios and factors that can influence an organization’s decision to leverage Organization Reset for its transformation endeavors.

  • Management of exponential growth
  • Optimization of operations
  • Economic, competitive and financial challenges & opportunities
  • Re-alignment with organization core
  • Failed/stalled restructuring programs
  • Overly complicated/complex business processes

How to execute Reset?

These factors and their derivatives work in tandem with each other, often leading to complexity, ambiguity and challenges. Organizations can leverage the following approaches and principles, in order to successfully implement Organization Reset for managing its transformation.

Sponsorship and Involvement – Reset initiatives need much more than talking about the importance, benefits and behaviors required for execution. For it to be effective, it must live and grow in the mindset of the organization. As the scope and complexity encompasses multiple processes, divisions and business operations,

Reset must be sponsored and led by an executive team, being cross functional and integrated in nature. Unless an executive team (vs individual executive) is leading the effort Organization Reset, the efforts may fail to yield desirable results. The executive team will not only ensure continual guidance and review but will be able to take and implement hard decisions that are required before, during and after the execution of the Reset Button. Additionally it will avoid what psychologists call ‘in-attentional blindness” (people can be so much consumed by a particular aspect that they are blind to what’s going on around them) and ensure activities and decisions are aligned with overall arching objective.

Innovation Oriented Approach – To successfully manage and deliver Reset, encourage teams to challenge the status-quo, to question the unquestionable and to build your plan, by blending the ingredients of innovation and ideation of
consistent and operational effective processes. Leverage the last known stable and operationally effective state. An overly complex or ambitious approach may hinder the plan; it may be the fashion equivalent of putting lipstick on a pig. Program objectives and the organization’s maturity levels will help you decide whether an incremental and/or a radical approach is most suitable for your needs.

Balance between Metrics, Milestones and Intuition – Metrics and milestones are very important in the traditional Restructure but for Organization Reset, you
must consider the third element, intuition. Steve Jobs didn’t have tons of data points and metrics, but he successfully used his intuition. Along with his intuition, he successfully leveraged various metrics to ensure that Apple’s supply chain, marketing and finance operations were best in class and were able to meet and address organization goals.

Alignment of Perspective’s – Corporate values creation is nothing but underpinnings and relevance of various perspectives – Product/Services, Financial, Customer, Process and Growth/Expansion.
As part of Reset, define your strategic theme by aligning with various perspectives. The alignment of perspectives will also enable the identification where gaps exist. Is it a product gap, ambition gap, value-proposition gap or a process gap? Toyota focused on process (quality) as part of its organization Reset; Apple’s organization Reset focus was primarily on product (innovation).

Two stroke -‘T shaped approach’ : The increasing expectations of customers for products and services, having the ability to easily retrieve information on various
competitive products and innovation-oriented shorter product life cycles, are forcing organizations to think about the customer front line through repeatable and integrated processes across back end value chains. This requires two strokes, the horizontal stroke, which addresses the common process (global), best practices and functions, while the vertical one focuses on innovation and specialization. Connecting the two strokes of ‘T’ creates a balance between the various perspectives of the front line (product and service development, innovation and customer experiences), and that of the back office (production, supply chain, human capital and finance) goals.

Reset operations for businesses are real, and so are its benefits. It must be a seismic change that introduces rigor around an organization’s core strengths, enabling it to shun/trim non value added activities, processes and business operations that are not aligned to its core. The decision to invoke Reset does force one to do a lot of thinking and contemplation on objectives (including the success criteria), scope, complexity, approach and timelines.

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