|| Print ||
|Thursday, April 24, 2014|
BY TOM COX | OB BLOGGER
Portlanders will vote on the creation of a new water district in May, potentially wresting control of water from the City Council.
In other words, a reorg.
It’s not just voters who feel this urge, when frustrated by performance. Too many of us in business choose to reorganize rather than fix underlying issues.
That illusion of progress is deliciously tempting to managers, business owners, even voters.
Don’t fall for it.
To reorganize in the face of problems is almost always a mistake. It usually sidesteps the real work of fixing fundamentals.
Indeed, those few business reorgs that actually work, are undertaken after a painstaking analysis of what’s wrong and how to fix it.
Consider the successful reorg of Swiss giant ABB:
The success of the reorganized ABB tends to prove the accuracy of the analysis — ABB’s problems were caused (or exacerbated) by its structure, and the new structure was designed specifically to address the firm’s strategic needs for faster and more competitive bids.
Let’s look at your business, and at Portland’s water bureau.
(I’ve escaped Portland and live safely in the low-cost water utopia of the Tualatin Valley Water District, so I have no dog in this fight.)
Here are the key questions to ask about a potential reorg:
Problems come in all sizes and shapes. A quality problem differs from a cost-structure problem, and a staffing problem differs from a regulatory problem.
We often mis-diagnose our problem’s root cause, however.
Portland’s water system costs, for example, have multiple drivers — including expensive federal mandates, overdue maintenance, and a declining customer base that shifts fixed costs onto fewer ratepayers. The customer-base problem itself comes from at least two causes — escalating costs (a potential vicious cycle) and bad customer service. The bad customer service is almost certainly caused by a poor service culture that’s itself probably caused by an entitled, insular, bureaucratic leadership focused more on the City Council than on customers. Another concern is the City Council using water system funds to build things only marginally related to water.
For your situation: list all your presenting problems and perform a Five Whys analysis to uncover likely root causes.
Structural Aspects of the Problem
Looking only at your root causes, ask which are structural.
For Portland water situation, let’s pretend our analysis above is both accurate and complete. (For another, far deeper analysis see the City Club of Portland study.)
Which might be helped by a changed structure? Three: overdue maintenance, customer service, and the misallocation of funds by the City Council.
For your situation, list the root causes that have structural components. Be clear on what truly is caused by structure and likely to be fixable.
Would a New Structure Help?
Now you have to get candid with yourself and set aside any enthusiasm you have for your shiny new imaginary structure.
Suppose you have two structural problems, one caused by too much centralization and the other caused by not enough centralization. You will be deeply challenged to find a single new structure that solves both.
Be candid too with the new problems you’ll cause with your new structure.
For example the Portland water reorg, according to the City Club analysis, creates as many new problems as it purports to solve. (I’m personally dubious about having a parallel elected water board alongside yet separate from the City Council.)
What Structure to Pick
If you have competing options for new structures, lay them out in a grid, with options across the top of your columns and one problem or issue for each row. Score how well each option solves each problem or issue. Do add weight to issues of greater importance and impact.
How to Reorganize
Reorganizing is one of the most disruptive things an organization can do. The simple guidance is, involve staff early, keep them informed of the issues, make it clear that the reorg is for a good reason, get their input on the details of how to execute the reorg, and look for ways to use the reorg to help staff grow and develop. Plan it carefully and execute it quickly. Lead discussions with your senior team on topics like Kotter’s 8-Step Process for Leading Change.
Should voters approve the Portland water reorg? I say, not the one on the ballot, no. Many of the presenting problems can be fixed without structural change, and others (like federal mandates) can only be endured — no new structure would help.
Real Time - Oregon Business
Tweets by @OregonBusiness
|The Carbon Calculus|
|Will Medford Ever Be Cool?|
|The Human Factor|
|Which Way to Chinatown?|
|Raising the Stakes|
|Microsoft, Caterpillar woes lead Dow decrease|
|US consumer confidence continues to rise|
|Radical party's election win in Greece creates shockwaves|
|Flights canceled en masse as east coast preps for blizzard|
|West Coast port talks resume after rallies|
|Consumers pine for better battery life|
|Gates Foundation aims to gradually improve world for the poor|
Is your business ready to join us in the call for action? This opening panel includes Oregon businesses who will discuss why they signed the Oregon Climate Declaration, the investments they are making to reduce carbon emissions, and how their actions are affecting their companies.
Get ready for two days of special events produced with the EPA, Portland Timbers and ISOS before and after the GoGreen Conference on October 16.
hubbub health uses behavior change science to rethink wellness programs.
In Ashland, a public-private partnership results in online resources to help diversify the local economy.
How sports tourism is driving economic growth and making cities across Oregon a better place to live.
If you have given a former employee access to your company’s electronic information by virtue of assigning a desktop or laptop computer and you suspect he or she of having taken electronically stored data, there are several steps to follow to preserve electronic forensic evidence from spoliation.
The official launch will be Jan. 14.
In a switch on the traditional trade show, representatives from UO departments and local and state agencies will host tables to connect with businesses and vendors. The fourth Reverse Vendor Fair will take place Wednesday, Feb. 25, in Eugene.