{"id":452,"date":"2010-04-05T11:22:19","date_gmt":"2010-04-05T10:22:19","guid":{"rendered":"http:\/\/www.telekta.com\/blog\/?p=452"},"modified":"2012-07-25T13:17:56","modified_gmt":"2012-07-25T12:17:56","slug":"corporate-organizations","status":"publish","type":"post","link":"https:\/\/www.telekta.com\/blog\/2010\/04\/corporate-organizations\/","title":{"rendered":"Corporate Organizations"},"content":{"rendered":"

There are 3 basic organizational structures– each flawed in some way<\/strong><\/em><\/p>\n

\"Organization<\/a><\/p>\n

In almost every political campaign, the opponent runs on the theme that they can successfully attack the huge waste, fraud, and abuse that exists everywhere in the government. Many will even have some facts showing how great this problem is, yet even after multiple successive new governments with this as a priority, the improvement is marginal at best.\u00a0 This is not conspiracy, but the symptom of a very hard problem that does not have an easy answer.<\/p>\n

In my business world, I see two similar paradoxical hard problems that the simple answer never provides a meaningful solution.\u00a0 The first is sales cross-selling and the second is the re-use of designs (aka IPR management). Combine these two with the ever-present general corporate waste through communication barriers and you have the three justifications we typically see used for most every corporate reorganization.\u00a0 You also have the reason why almost no reorganization can solve the hard problems.<\/p>\n

I see basically three flavors of business organization supporting the complementary functions of operations\/delivery and sales\/business development:\u00a0Operations can lead, Sales can lead, or a Matrix Lead where there is a balance of power with the two.\u00a0 To illustrate these three main types, I have created a distilled form and tried to reference a company that instills these behaviors.
\n1. Operations Lead:<\/strong> HP has long been a strong engineering-driven company. As a consequence, the product (e.g. printers or software) have typically been developed first with sales and marketing applied later. As a result, each business element has a global profit and loss (aka profit center) responsibility. Local sales offices host sales and marketing activities that are principally driven from a central sales and marketing office.\u00a0 This then leads to a sales and marketing that behaves as an independent cost center and must offer their services to the internal business units (Operations & profit centers). Such organizations most often occur where delivery management is stronger than sales management. As a consequence to the structure, IPR management is usually institutionalized and well managed, but sales cross-selling is usually the more difficult problem to address.
\n2. Sales Lead: <\/strong>Accenture has always valued their close relationships with clients.\u00a0 Their genesis is a partner structure (Anderson Consulting) where each partner had a near independent business.\u00a0 Ability to \u201cmake rain\u201d (successful selling) is one of the key criteria to becoming a partner and is a strong element of their corporate culture.\u00a0 As a consequence, the firm is typically quite adept at offering a broad range of client solutions as key a part of their basic business practices.\u00a0 On the down side, local offices will often repeat a solution done by another Accenture office without having the benefit of their experiences.\u00a0 In fact, their high focus on the individual client needs often means that Accenture can repeat a similar project with the same team and still have limited efficiency improvements when applied to the second client.\u00a0 In this organization, cross selling is institutionalized and effective, while IPR management is weaker.\u00a0 To minimize some of these weaknesses they attempt to overlay establish standard methodologies as a way of providing similar client solutions in other business units and they continually move staff from team to team as a way of sharing experience.
\n3. Matrix Lead<\/strong>:\u00a0 Ericcson Network Equipment is an example of a group of mutually independent organizations where operations and sales each are free to maximize their value to the larger organization.\u00a0 Ericcson operations cuts deals with multinational players that directly compete with the Ericcson regional sales and delivery offices.\u00a0 Likewise, the sales offices may work with a local supplier\u2019s product that is less expensive than Ericcson\u2019s own product.\u00a0 Potentially this is a superior organization structure since it balances the two priorities, but it is naturally unstable and requires substantial management intervention to keep this balance exactly equal. \u00a0(see balance of power<\/a>).<\/p>\n

Sometimes reorganizations are necessary.\u00a0 For example, most start-up software product companies start with all the smart people and all the best staff as engineers.\u00a0 However, as the business matures, most software product companies will spend at least twice as much on sales and marketing as they do on engineering \u2013 the consequence is that a product company must transition from an engineering-driven to a sales-driven company.\u00a0 Without sabotaging the necessary new authority granted to the sales and marketing teams, these restructured organizations must find new ways to maintain engineering efficiency.\u00a0 Keeping institutions that work across regions is likely the key.\u00a0 Likewise when transitioning in the other direction from regional\/sales to centralized\/operational business units, it is critical that sales and marketing have opportunities to learn from each other and\/or assist each other in cross selling.<\/p>\n

What happens when we transition the structure will be for another day….<\/p>\n","protected":false},"excerpt":{"rendered":"

There are 3 basic organizational structures– each flawed in some way In almost every political campaign, the opponent runs on the theme that they can successfully attack the huge waste, fraud, and abuse that exists everywhere in the government. Many will even have some facts showing how great this problem is, yet even after multiple […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[6,4,11],"class_list":["post-452","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-current-environment","tag-managing","tag-strategy"],"_links":{"self":[{"href":"https:\/\/www.telekta.com\/blog\/wp-json\/wp\/v2\/posts\/452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.telekta.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.telekta.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.telekta.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.telekta.com\/blog\/wp-json\/wp\/v2\/comments?post=452"}],"version-history":[{"count":16,"href":"https:\/\/www.telekta.com\/blog\/wp-json\/wp\/v2\/posts\/452\/revisions"}],"predecessor-version":[{"id":542,"href":"https:\/\/www.telekta.com\/blog\/wp-json\/wp\/v2\/posts\/452\/revisions\/542"}],"wp:attachment":[{"href":"https:\/\/www.telekta.com\/blog\/wp-json\/wp\/v2\/media?parent=452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.telekta.com\/blog\/wp-json\/wp\/v2\/categories?post=452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.telekta.com\/blog\/wp-json\/wp\/v2\/tags?post=452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}