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Accelerating Change: Rapid Prototyping for Merging Acquisitions

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Escalating health insurance costs continued to get press ... Nationwide Insurance. ODF Advisory Board Member. hillt3_at_nationwide.com. Organization Design Forum ... – PowerPoint PPT presentation

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Title: Accelerating Change: Rapid Prototyping for Merging Acquisitions


1
Accelerating Change Rapid Prototyping for
Merging Acquisitions
  • Organization Design Forum
  • April 22, 2008
  • Claudia Murphy, Craig McGee, Todd Christian

2
The Market late 2005
  • Many Disease Management providers
  • Several Wellness Management providers
  • A few emerging Health Assessment options
  • Escalating health insurance costs continued to
    get press and commensurate attention among
    employers

No one was yet offering an integrated set of
solutions many people are moving back and forth
into well, sick, and chronic populations.
A hypothesis emerged Keeping people from getting
into health trouble, and helping them get back to
work if they do, may benefit the employer and
employee.
3
Nationwide Better Health early 2007
Primarily known for
Five companies
Health promotion and education programs
Ancillary insurance products, typically sold in
conjunction with other benefit plans
Productivity solutions, including software for
tracking leave and absence
Disease management and education programs
On-line health assessment education programs
Organization Design Forum 2008 Annual Conference
4
Business Context
  • Two legacy businesses spent much of 20052007
    doing divestures and downsizing
  • Three new companies acquired 20062007 each at
    various stages of integration
  • During summer 2007, created an integrated Sales
    function highlighted need for integration of
    other functions Can we deliver what were
    selling?
  • Strong pressure for profitability and growth
  • Largest share of revenue and profit Specialty
    Health the legacy business with the least in
    common with all others

Organization Design Forum 2008 Annual Conference
5
Strategy
  • Create greater customer focus
  • Leverage existing strong relations with customers
    maintaining existing branding and operational
    systems where necessary, but migrating to Better
    Health branding and standardized systems
  • Leverage technology and infrastructure across
    different product families
  • Look for opportunities to cross-sell different
    product families longer term

Organization Design Forum 2008 Annual Conference
6
Original Organization
Organization Design Forum 2008 Annual Conference
7
Consulting Issues
  • Lack of integration among the 5 companies
  • Integration efforts were challenging
  • Many projects little apparent prioritization
  • Limited resources/commitment in acquired
    companies
  • Widely differing cultures in 5 different
    locations
  • Transitioning successful entrepreneurs into a
    large corporate environment independence and
    autonomy had an impact on trust

Organization Design Forum 2008 Annual Conference
8
Consulting Issues
  • Commitment to have integrated organization in
    2007 the sooner to respond to market opportunity
  • Lack of leadership team familiarity with
    organization design
  • Three primary areas of focus identified
  • Creating coherent culture
  • Developing an effective leadership team
  • Creating new organization design

Organization Design Forum 2008 Annual Conference
9
Consulting Exercise
  • Each table is a consulting team that has been
    asked to help Holly Snyder and her leadership
    team with moving the company forward. It is
    July. The go live date is January 1.
  • As a team discuss the following questions and be
    prepared to summarize your discussion
  • What approach(es) to the organization design
    process would you suggest?
  • What are the advantages and risks of your
    approach(es)?

Organization Design Forum 2008 Annual Conference
10
The Approach We Took
  • Leadership Team Development/Alignment
  • Rapid Prototyping model for organization
    design

Organization Design Forum 2008 Annual Conference
11
Leadership Team Alignment
Round 1 June 11, 2007
Round 2 December 10, 2007
MBTI History Wall
5 Dysfunctions of a Team Celebration Operating
Guidelines
  • Our concerns
  • Are they spending enough time on developing the
    leadership team?
  • There were distinct factions/styles among the
    leadership team
  • The Design Team is developing a design they may
    not be ready for

Organization Design Forum 2008 Annual Conference
12
The Design Process
June
July
Preparation (June 15 July 23)
August
Design Session 1 (July 24 July 25)
Design Session 2 (August 2-3)
  • Contracting with Pres.
  • Establish decision-making
  • Deliberate selection of the Design Team high
    performers, big thinkers, not the Leadership Team
  • Consultant data collection
  • Org design overview
  • Review of the business
  • Straw models and draft initial design
  • Cross-pollinate and integrate designs
  • Review previous model
  • Define work group accountabilities
  • Define RACI model
  • Validate roles against work processes
  • Rationale
  • Critical success factors

Organization Design Forum 2008 Annual Conference
13
The Design Process
September
October
November
December
  • Presentation to Leadership Team
  • Approval of Design Concept

January 08
  • Next Level Design/Staffing
  • Implementation Planning
  • Announcement to the Company
  • (Nov. 19 Dec. 18)
  • Micro-design/role clarification
  • Product Management
  • Client Relationship

Quick Start Training
Organization Design Forum 2008 Annual Conference
Structure In Place!
14
Attributes of New Design
  • Reduced direct reports to President
  • Established Product Management role to steward
    integration of different product lines
  • Integrated Operations of all entities under one
    reporting structure
  • Established Client Relationship role to provide
    strong account management leading to longer term
    revenue growth
  • Strengthened Client Implementation role
  • Expanded Chief Medical Officer role to create
    greater credibility with potential clients
  • Centralized IT to better leverage resources

Organization Design Forum 2008 Annual Conference
15
The Tradeoffs
  • Detailed analysis versus quick concept
  • Structure focus versus broader design
  • Isolated design team versus broader engagement of
    all associates
  • Quick implementation versus allowing people to
    accept/understand the change
  • Decision-making by President versus aligning
    leadership team

Organization Design Forum 2008 Annual Conference
16
Quotes from Participants
  • 1.     What was it like for you at the beginning
    of the process?  
  • Anxious, excited, ready to get into it.
  • I wondered how everyone would respond together
    because we not only came from different parts of
    the organization, many people were also meeting
    each other for the first time as well.
  • Relief that we were getting the work started and
    that we were on a fast track.
  • At first, it was challenging to understand the
    extent to which we were going to beinvolved in
    the redesign efforts.  There were a lot of
    different opinions being offered and information
    being shared.
  • I felt like a valued member of the team and was
    able to learn so much about other parts of the
    organization and how the different companies were
    operating.
  • 2.     What surprised you most?  
  • The huge amount of work to convert our company
    over to one structure. It surprised me that our
    team was really looking for a new way of doing
    things. (Leader)
  • How quickly we were able to come to a cohesive
    recommendation.  I questioned whether 2 2-day
    sessions could get us there, but Claudia/Craig
    coming to the table with 3 sample scenarios so we
    could hit the ground running, as opposed to from
    a blank slate helped a great deal.
  • The speed with which the design team generated a
    recommendation.
  • My biggest surprise was the time table.  We had
    a lot to work out in a short time.  Additionally,
    I was surprised that the majority of our
    recommendations were accepted so quickly. 
  • Everyone came to the table to do whats best for
    the company as a whole.  No one brought
    individual agendas and worked together towards
    the greater good. 

Organization Design Forum 2008 Annual Conference
17
Quotes from Participants
  • 3.     What did you learn?
  • Generally, quite a bit more about all the other
    businesses, their processes, and their
    infrastructure.  Different in many ways and the
    same in many ways.
  • The team was able to put aside their biases, and
    also the fact that they/their team could be
    impacted by the recommendation, to do the right
    thing and come up with the best solution for
    NBH.
  • I learned to think about the best structure
    differently. I also learned to really listen and
    think about peoples perspectives. (Leader)
  • I learned a lot about how the different designs
    of the companies had implications on the culture
    and functioning of the company. Additionally, I
    learned a lot about the companies we had recently
    acquired.
  • 4.     What would you have done differently?  
  • Nothing.
  • To be honest, not too much.  Unique to us, we
    had to spend some time learning about each other,
    and the various LOBs (Lines Of Business) to get
    to a common foundational point (other companies
    might not have to do this).  I think this took
    almost 1/2 of the first day that could have been
    used otherwise in other engagements.
  • 1. Started sooner in the year.  2. Better
    aligned the macro work with the job mapping work
    that was taking place simultaneously. 3. Included
    a representative from Finance on the design
    team.
  • I would have spent more time flushing out some
    of the details behind our recommendations.
  • I think we should have designed a more
    comprehensive communication plan.  Even though we
    had a communication plan I dont think people
    felt they knew enough about the process and what
    was happening.

18
Quotes from Participants
  • 5.     What are you most proud of?  
  • We set out to accomplish a goal (new org
    structure), and we accomplished it.  We have
    quite a bit more to do, but the first step is the
    most important and we took it.Our
    recommendation was utilized (for the most part)
    within NBH.  It made the sessions/time all
    worthwhile.
  • Our new Leadership Team They rock! (Leader)
  • The recommended structure itself--  The
    structure is appropriate for NBH's phase of
    evolution.
  • I am most proud of the fact that we came to
    consensus and worked as ateam to complete our
    objective.
  • The commitment of the group to get the best
    product out in such a short period of time.  It
    was a huge amount of work!  
  • People lower in the organization were hungry for
    a change. The design team became our ambassadors
    and were our greatest assets. (Leader)
  • 6.     What are the current challenges that you
    see?  
  • We don't know what we don't know.
  • Implementing the reorganization all at once
    (although I know it's staggered to some degree)
    and quickly so we can reap the benefits.  I do
    believe it's the right structure, the quicker we
    can get there and get through the growing pains,
    the sooner we'll reap the rewards.
  • Getting the Operations moving quickly enough to
    manage all the problems of the past.
  • Redefining jobs that were recently created
    through the job mapping process---This is not
    personally challenging but disconcerting for
    associates.
  • Working towards total integration. The products
    and operations still exist in silos (although
    there has been a lot of progress).  Additional
    challenges exist around shifts in
    responsibilities for individuals and positions
    needed to support the new design.

Organization Design Forum 2008 Annual Conference
19
Accelerating Implementation
  • It is the end of September what might you do to
    help the client accelerate implementation?

20
Accelerating Implementation
  • Robust implementation and communication plan
  • Regular meetings for leadership team
  • Strong team of all HR Business partners to
    support implementation
  • Additional design/alignment work to ensure role
    clarity
  • Very clear communications package for leaders to
    explain design and rationale
  • Quick Start package for leaders/HR

Organization Design Forum 2008 Annual Conference
21
Accelerating Implementation
  • Micro-design work sessions
  • Designed to
  • Operationalize key roles
  • Product Management, Client Relationship,
    Operations
  • Develop broad, consistent understanding of role
  • Develop accountability and support for role
  • Who attended Hollys leadership team
  • Focused of what the new activities and
    responsibilities were going to be
  • Leaders reactions
  • Renewed sense of team
  • Acceptance of shifting of roles..but, not really
    fully understanding what the shifts meant
  • Not matter what we design, whats going to be
    required is a high degree of collaboration

Organization Design Forum 2008 Annual Conference
22
Accelerating Implementation
  • Quick Start Kickoff Meeting Design
  • Designed to
  • Accelerate effectiveness of newly formed teams
  • Provide new leaders with a tool to establish
    goals and objectives with new team
  • Develop stronger sense of personal relationship
    among new team
  • Based on participative design methodology (Fred
    and Merelyn Emery)
  • Provide meeting design and all material to
    conduct a 2 day kick-off session
  • Trained HR Business Partners and Leaders to
    delivery Quick Start Kickoff Meeting

Organization Design Forum 2008 Annual Conference
23
If We Were to do it Again.
  • What we would keep
  • Where we need to be creative
  • Rapid prototyping messaging
  • Use of straw models
  • Clear focus and strong facilitation of design
    sessions
  • Team taking charge of recommendations
  • Understanding of how the work would flow
  • Engaging the leadership team during design and
    implementation
  • Engaging more associates throughout the
    organization
  • Finding time with the leadership team
  • Engaging Corporate HR more fully

Organization Design Forum 2008 Annual Conference
24
  • Other Questions?

Organization Design Forum 2008 Annual Conference
25
Thank You!
  • For more information or if you would like to
    discuss further, feel free to contact any of us.

Todd Christian Associate Vice President, Staff
Administration Nationwide Insurance christt9_at_natio
nwide.com
Terri Hill Chief Administrative
Officer Nationwide Insurance ODF Advisory Board
Member hillt3_at_nationwide.com
Claudia Murphy Claudia Murphy Consulting,
Inc. 602-795-4600 claudia_at_claudiamurphy.com www.cl
audiamurphy.com
Craig McGee, Ph.D. Solutions 970-416-0809 cmcgee_at_s
olutionsconsulting.org www.solutionsconsulting.or
g
Organization Design Forum 2008 Annual Conference
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