Saturday, January 12, 2008

How Organizations Change, Part 1, step 1: Setting Goals

This article provides background and more detail on how to change organizations. It is a supplement to the webcast How Organizations Change. I suggest you watch the webcast first, then read this article.

Obviously, the first thing you need in order to change an organization, is a problem. Luckily, there is no shortage there. Let's begin by perking ourselves up a bit: substitute challenge for problem. So much more satisfying, isn't it? Everyone needs a challenge now and then.

So, there is something in your organization that limits its ability to achieve its goals. The challenge is to neutralize the obstacle. The best thing is to remove it entirely, but that is not always possible.

To achieve our goal of changing the organization, we first need to paint a picture of what the organization should be like. The best way I know to do that is with an Intermediate Objective map (IO map).

IO maps are part of The Logical Thinking Process tool set (TLTP). TLTP is a revised version of The Theory Of Constraints Thinking Process. If you want to get good at TLTP, I recommend you buy William Dettmer's book on the subject.

An IO map is a diagram depicting an organization's goal, the Critical Success Factors (CSF) necessary to reach the goal, and the Necessary Conditions (NC) necessary to achieve the CSFs.

You can make IO maps for all kinds of organizations, like a family, a union, political organization, government body, hospital, etc.

Putting together an IO map won't take more than an hour or so, provided that you know what the company wants to achieve. If you are the boss, drawing an IO map should be pretty easy. If you are not the boss, sit down with the boss and draw it together. If you can't do that, reverse-engineer the map from strategy documents, then get the boss to review and revise.

Here is the IO map for my company.

You may be surprised that that I've included "happy family life" as a Critical Success Factor. It isn't that strange. I am running a one man company. My family keeps me motivated.

Since I am building my company the Theory Of Constraints way, I am using the IO map as direct input to a Future Reality Tree (FRT). The FRT serves as a broad plan, showing me what I have to accomplish in order to reach my objectives.

An IO map isn't static. It evolves, partly because an organization changes over time, partly because understanding of the organization evolves.

The IO map is important in many respects. When you analyze the current situation in an organization, the IO map is used to find the factors that cause problems, and the factors that work especially well. When reengineering an organization, even if the change is small, one does not want to throw the baby out with the bath water.

I also use IO maps when I design measurement systems. Having an IO map allows me to construct measurement systems that tell if the company is moving towards its goal or not. This is a pretty big deal, because most organizations have measurement systems that drive them away from their stated goals.

1 comment: said...

Thanks for the great article. The author points to a number of factors that will help move company for the next phase of the company's development.

If you are interested in balanced scorecard, KPI and metrics in business, check this web-site to learn more

about Metrics