It worked. After losing market share for 13 straight years, Ford gained share in 2009, turned a pro!t in 2010, and achieved its highest pro!ts in more than a decade in 2011. Mulally turned 65 in 2011 amid speculation about when he would retire. Board chair William Ford III expressed the hope that he would stay forever, but Mulally chose to retire two years later in 2014.
Principles of Successful Structural Change Toomany efforts to change structure fail. TheCitibank, Beth Israel, andFordMotorCompany initiatives succeeded by following several basic principles of successful structural change:
• They did the hard work of carefully studying the existing structure and process so that� they fully understood how things worked—and what wasn’t working. (Many efforts at� structural change fail because they start from an inadequate picture of current roles,� relationships, and processes.)�
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• The change architects developed a new conception of the organization’s goals and strategies attuned to the challenges and circumstances of the time.
• They designed the new structure in response to changes in strategy, technology, and environment.
• Finally, they experimented as they moved along, retaining things that worked and discarding those that did not.
CONCLUSION At any given moment, an organization’s structure represents its best effort to align internal activities with outside pressures and opportunities. Managers work to juggle and resolve enduring organizational dilemmas: Are we too loose or too tight? Are employees under- worked or overwhelmed? Are we too rigid, or do we lack standards? Do people spend too much or too little time harmonizing with one another? Structure represents a resolution of contending claims from various groups.
Mintzberg differentiates !ve major components in organizational structure: strategic apex, middle management, operating core, techno structure, and support staff. These components con!gure in unique designs: machine bureaucracy, professional bureaucracy, simple structure, divisionalized form, and adhocracy. Helgesen adds a less hierarchical model, the web of inclusion.
Changes, whether driven from inside or outside, eventually require some form of structural adaptation. Restructuring is a sensible but high-risk move. In the short term, structural change invariably produces confusion and resistance; things get worse before they get better. In the end, success depends on how well the new model aligns with environment, task, and technology. It also hinges on the route taken in putting the new structure in place. Effective restructuring requires both a !ne-grained, microscopic assessment of typical problems and an overall, topographical sense of structural options.
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5 c h a p t e r
Organizing Groups and Teams
Alone we can do so little; together we can do so much.
—Helen Keller
On May 2, 2011, Stealth Hawk helicopters carried two units of SEAL Team Six Red Squadron for Operation Neptune Spear—the assault on
Osama bin Laden’s lair in Abbottabad, Pakistan. The outcome of their mission “to interdict a high value target in a nonpermissive environment” has taken its place in history, though there are con!icting accounts of the actual combat. The fog of war invites many interpretations.
Red Squadron’s success owed much to awesome weaponry and the unsurpassed courage and pluck of its highly trained operators. But many after-the-fact commentators agree that the real secret of its success is the astonishing teamwork built into a SEAL’s experience from the beginning.
Teamwork is an integral part of Basic Underwater Demolition (BUD/S) training, the toughest school in the military. Classes begin with 200 recruits, but few make it to the end of the program. Sometimes no one from a class graduates. Applicants endure extreme, if not inhuman, physical and mental challenges. Teams of eight are assigned 200-pound in!atable rubber boats that they must carry with them at all times. During chow time or bathroom breaks, a team member must guard the boat. The team gets punished for any individual
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infractions. When anyone drops out, other members of the team have to “ll in. Sometimes a crew of two or three is responsible for the heavy vessel.
Survivors of the initial BUD/S ordeal move on to SEAL Teams. Those who seek a place on legendary Team Six apply for the Green Team. Past training intensi”es during the year of Green Team rigor. In addition to tougher physical challenges, candidates for SEAL Team Six train in intense, close-quarters combat in a simulated terrorist “kill house,” using live ammunition. An inch or two between men under combat conditions may mean the difference between life and death. Candidates sometimes wound or kill teammates during this phase of training. During Green Team exercises, members of the three Team Six squadrons—Gold, Blue, and Red—choose new men for their units.
The squadrons exist in a relatively simple structure. The Admiral who heads Joint Secret Operations Command (JSOC) reports directly to the Secretary of Defense, who in turn answers to the President. Those relations follow strict protocol. The Team Six commander reports to the head of JSOC and has authority over the leaders who command the three squadrons; “The heart of each Squadron are the teams, each led by a senior enlisted SEAL and made up of half a dozen operators apiece . . . Assault squadrons are accompanied by intelligence analysts and support personnel” (Owen andMaurer, 2012, p. 37). Teams consist of snipers, shooters, explosive experts, and other operators required for a speci”c mission.
In the case of Operation Neptune Spear these included a translator, a CIA agent, and a dog named Cairo. The chain of command from the JSOC Admiral to the operators is clear but very informal: casual civilian dress, “rst names, very little protocol. But in battle, Team Six operational units are highly regimented: “Every assaulter knew both his place in the chain of command and what to do if communications were lost to operations center” (Pfarrer, 2011, p. 181). The mission’s detailed plan relied on highly sophisticated intelli- gence. When the two helicopters landed in bin Laden’s compound, every operator knew his role and relation to others. Lateral coordination was precise, achieved mainly through terse “SEAL Talk” and nonverbal hand signals. When one helicopter crashed, the teams quickly modi”ed their plans and team structure. From BUD/S training on, a focus on teamwork returned a huge dividend for the operatives of Red Squadron, Team Six, and the nation. When the team assembled for recognition at the White House, President Barack Obama asked, “Which of you “red the “nal round?” In unison, the members of Red Squadron responded, “We all did!”
Teams that work well regularly make an enormous difference in the business world as well. Consider “six teams that changed the world” (Fortune, 2006). There was the remarkable group that Thomas Edison pulled together, including an English machinist, a Swiss clockmaker, a German glass blower, and a Princeton-trained mathematician. They
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worked in concert with Edison’s inventive genius to produce an astonishing array of novel products, including the phonograph and the lightbulb.
Or how about Lockheed’s legendary Skunk Works, a team that built a series of breakthrough aircraft: the F-104 Star”ghter, the U-2, and SR-71 spy planes? The name came from the team’s initial quarters—a circus tent with bad odors. It was World War II, and space was tight. Designers were quartered away from the main of”ces and worked side by side with metal workers to help assure that breakthrough designs were practical. Cumbersome bureaucratic procedures were streamlined by team leader Kelly Johnson’s “14 rules and practices.” In addition to Skunk Works’ own innovations, the concept of its team structure has spawned thousands of corporate imitators.
Then, of course, there’s the well-known team of four drivenmalcontents, later expanded to dozens, who believed you could build a personal computer easy enough to use and inexpensive enough to be affordable. Their ultimate goal was to unleash personal creativity. Steve Jobs of Apple headed up the super-stealth project, housed in a two-story building near a gas station. Competition with other projects and with Apple’s leadership was “erce, but, despite the quarreling, the Macintosh was born in 1983, marking a turning point in the history of personal computing.
MasterCard was struggling in 1997. Six major advertising campaigns had failed to close the gap with Visa. In desperation the company hired McCann Erickson, who assigned a creative team of three to the case. The trio’s breakthrough came with the tagline “some things money can’t buy.” The “rst ad was set at a baseball game featuring everyday transactions with the setup, “priceless.” The ad and its successors helped MasterCard turn the tables on Visa.
Ford faced a dif”cult challenge in the 1980s. The Japanese were making serious inroads in the American automobile market. Taurus, Ford’s best-selling car, needed a major redesign, but executives knew too well of past problems with the design process. Every function had a different view. Designers initially presented a new concept. Engineering very often maintained the design was not feasible, “nance typically argued it was too costly, and manufacturing was sure to argue that it couldn’t be built. Competing voices typically slowed down or shut down the smooth transition from concept to “nished product.
