Sea Change Brings Change

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Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
Dr-Smith.com

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Change is one of those altars that is well worshiped at – not one of those forgotten gods whose supplicants infrequently visit their shrine. But wanting is not the same as having – it is sometimes not logical – but I have found it to be true.

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One of the inevitable results of growth is change. This maxim is as true for organizations as it is for individuals. When ‘what has been’ morphs into ‘what is new’, opportunities proliferate but dislocations occur that affect every part of a company. I recently helped one navigate these perilous waters. The experience brought several important lessons into focus.

The Company: First, a bit of background on the company. It is in the service business. Its clients are spread over a wide geographic area. The company’s service is mission critical to its clients. As a result, quality control is a major issue – as is reliability. Recently, the company had been experiencing pressures that came with increasing success. The organization had grown much more complex. Managing that increasing complexity had put a lot of pressure on the senior team.

In its prior configuration, the company was divided into two major areas – sales and operations. As in many cases, they were distinct parts of the company. As its customer base expanded, the challenges sales faced became much more complex. Price was only one of the major drivers in a competitive market. The reputation of the company – its branding – was a major asset for the sales force. The ability of operations to reliably provide high levels of service was another. Additionally, each salesperson was now handling a higher volume of business.

Operations were charged with delivering on the schedule and within the terms that sales negotiated. The relationship between sales and operations became strained as volume increased. As the level of business steadily increased, they also experienced more complex challenges. Much like a juggler who keeps adding balls to the mix, operations needed to effectively manage a larger number of production units while keeping quality and reliability at the forefront. Missteps now had a magnified impact on their ability to do this. Small mistakes were introducing turbulence into a process that operations struggled to keep calm and orderly.

The Need for Change: It was clear that the company had become so much more complex that intuitive solutions were proving inadequate. As I went through my initial interviews, I remembered something I had learned at the Sloan School of Management while studying with Professor Jay Forrester, the father of Systems Dynamics – ‘effective solutions to problems within complex situations often tend to be counterintuitive’. In other words, often you have to start out south in order to get north.

It was clear that the culture within the company needed to be professionalized. Seat-of-the-pants approaches were no longer effective and often disruptive. Running with systems that had evolved to manage a much simpler operation was proving increasingly ineffective. It was also clear that the senior team did not really understand the dynamics of the company as it had come to be. This was particularly apparent when, in trying to solve a specific problem, the team was consistently meeting newly created challenges in other areas.

Many would have started with the relationship between sales and operations – working to mediate accommodations and smoothing out the process. I realized that this might be a placed to start but was not the best approach for very long. The company was going through a phase that required a professionalization and rationalization – a total makeover – a sea change. My first objective became designing a process that would result in an entirely new culture and organizational structure for the company.

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