Organization design blog- May 2013

Howard Schultz joined Starbucks in 1982 as director of retail operations and marketing. He became CEO in 1987 and took the company from 17 stores then to 2,498 in 2000 when he handed the CEO role to Orin Smith and became chairman and chief global strategist. Smith retired in 2005 and Jim Donald became CEO. Two years later, during the depths of the recession Starbucks nearly drowned in its caramel macchiato. After decades of breakneck expansion under Mr. Schultz, tight-fisted consumers abandoned it. The company's sales and share price sank so low that insiders worried Starbucks might become a takeover target. So in 2008, by which point there were 15,001 stores worldwide, Schultz returned to the CEO role with what he called a "transformational agenda" that included wooing back customers, remodeling some stores and closing 900 others (predominantly in the United States), streamlining the supply chain and changing the executive team.

In his several decades of leading Starbucks, he provides a good example of a leader who has demonstrated both healthy and unhealthy leadership attributes.

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If you are interested in the topic of organization culture change join the discussion at the Organization Design Forum's Virtual Learning Series webinar I am facilitating on October 4 from 11am - 12:30 pm Eastern Time. The session is designed to be collaborative, seeking participant input and observations to build the story of culture and design. Get more details by clicking here.

The session discusses the notion that when competitive and other contextual forces require a change in business strategy, business leaders usually turn to organization design for changes in structure and work process. As the power of organizational culture in strategy achievement has become clearer, many business leaders are making "culture change" a priority of organization design, often because they see the organizational culture as limiting what they want to achieve.

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Here's a quote from an email I received this week:

"We are about to undergo a space renovation to provide a more collaborative work environment and allow us to start hoteling*. We recently announced this initiative at a staff meeting and there was a lot of apprehension from the employees regarding the change. Do you know of a good change management training course that is offered? I think it would be beneficial to everyone to ease their concerns and show them than change can be a good thing."

In the email quoted you have a classic situation. Leaders believe that to develop the organization they need to provide a more collaborative work environment and start hoteling. That is the strategy piece that aims to develop the organization. The change management piece is helping workers adapt to the change in circumstances and context that this development strategy brings about.

So, organization development is not the same as managing change. To make it simple OD is strategy and the change management is operations. But with this in mind it is obvious that in order for organizations to develop/improve then aspects of their operation the process, people, space, technology, have to change. Thus organizational development and change management are intertwined.

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Incipient panic
I wake up from a bad dream that my daughter is in great difficulty in a dangerous environment. I know she is in Eritrea. I get an email from her that same morning.

I am locked out of my Yahoo account! I am in a bit of a fix. Can you Western Union me some money? We need about $1000 US. I am in the Intercontinental Asmara Palace Hotel.

My first thoughts a) it's a scam -someone has phished her account. b) she's written this message under duress c) the dream was prescient d) what do I do now? I try not to panic.

Instead I look at the Intercontinental website for the Asmara Palace Hotel phone number. They don't have a hotel in Eritrea. I begin to panic. No, no, no, my voice of calm admonishes me. Breathe, stop, think, dreams are only dreams they are not reality.

Ok - I look up Western Union to find out how to send money.

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This week has been one of discussions on value propositions. In the first we were working out what we were offering various stakeholders in returning for investing time, effort, and obvious commitment into supporting the development of 'living labs'. On this project we are planning intentional experimentation on the interactions between people and workspace. So, for example, if we invite people to work in open bench style workspace rather than the current individual high walled cubicles and they accept the invitation what impact does it have on things including their work practices, the work flow, and their productivity?

Clearly inviting people to work in a different space layout will incur various costs e.g. in new layouts, perhaps new furniture, risks to productivity and business continuity, etc. But there may be benefits - more collaboration resulting in higher customer satisfaction, higher productivity, swifter decision making because people are communicating more effectively and so on. But we don't know and this is the 'lab' part of the project. Thus the value proposition discussion.

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This week we've been having a lot of debates on the pros and cons of hoteling which is the office management strategy that considers certain office resources, such as workspaces and equipment, to be shared assets, rather than assets 'owned' by specific individuals within the company. In this case it is cubicles and desk space that by being shared can help optimize the office efficiency, reduce real estate costs by employing more people in the same space, and increase employee satisfaction and retention by giving them access to workspaces and resources whenever and wherever they need them. Hoteling is typically characterized by an on-line reservation and check-in processes, and includes telephone switching functionality.

Hoteling's basic principle is that of optimizing the unused space in office buildings by allowing employees to book cubicles, offices, and conference rooms for short periods of time. In many offices everyone who works full-time, part-time, or mobile works has a desk space which is 'theirs' but studies prove time and again that for many hours a day these spaces are underutilized.

Hoteling can take various forms and we're experimenting with a variety including:

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