| Christian,
There is no doubt that a hierarchical organization is not only hard to
understand and operate; it provides endless opportunities for muddying
the water and evading responsibility. If it's hard to pin respons-
ibility onto people then they should be measured by profitability.
This raises three issues:
a) Investment management
b) Cross- charging, or ...
c) Company break up.
From where I sit in a territory, sales and services company, we don't
seem to manage investment at all. Every June 30th all programmes, and
accounts come to an end and we are all reborn on 1st July with our sins
forgiven.
Cross -charging would mean that the territories would sell their sales
and service capabilities to the CBUs and buy product from the PBUs(?).
Products and services supplied by other units would be cross- charged at
agreed prices (not cost) and every unit would be profit- responsible at
the end of the year after allowing for investment pluses and minuses.
A possible option all- round is to buy or sell in the open market.
The fact is that cross- charging is hard for all sorts of reasons and
hardly ever works within one set of accounts, not least because
financial accountants put income and expenditure accounting before
output or activity- based accounting. So, bottom- line, the only
realistic way to achieve measurement and control of complex and
extensive activities is company break up.
Britain's chemical company, ICI, is just about to split itself into (I
think) separate chemicals and pharmaceuticals companies because they
found it too hard to manage both within one organization.
In your example, this would mean that whoever is bidding "Software
Process Improvement worldwide" would have to come up with an investment
case, backed up by sales orders from other profit centres-- and from the
open market-- who have made their choice between in- house and free market
options. When it comes down to competing claims for funds, it becomes
relatively easy to prioritize. Thereafter you need to be able to measure
their success in meeting their investment forecast, i.e. costs, revenues,
net funding.
I don't suppose this helps at all in your present situation but then
that's a reflection of what still needs sorting out.
David P
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|
Fact is we're living through a period of transition of proportions
quite unknown within Digital. It's not just the honest soldiers in the
trenches that are still trying to understand where to point their
weapons -- so are many of the Colonels.
It's inevitable with the magnitude of internal & external change. I
suspect the best thing is to buckle down & cope with the uncertainty
until it has passed (6 months? 12 months?).
For some folk, this is intensely frustrating, especially when you work
across multiple industries/territories -- & if you have any form of
planning or budgetary process in place for FY94. Unfortunately, I can't
see any immediate panancea -- although I would have no problem with a
more directive leadership style for a few months if that helps clear
the log-jams. The time for defending fiefdoms is past, wherever they
are based. Defending profits seems more timely ...
BTW, - 1 states that a hierachical organisation is hard to understand
-- shouldn't that read matrix as hard to understand? Most hierachical
organisations I've worked in were very easy to understand -- one boss,
clear objectives, direct acountability. May well have had other failings,
but clarity was not a problem.
Colin
Colin
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