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From crisis to hypercrisis with the crisismanager

A company came into difficulties and appointed a crisis manager. That crisis manager was demonstrating an abundance of activities, where-under a restructuring program.

The restructuring program consisted of 7 projects of which 1 cost cutting project, 1 major IT project and several improvements projects related to the functional organisation.

The crisis manager had heard Business Process Management was a good methodology to support the program (7 projects) and a means to achieve quick wins. After the projects were launched, it was asked to provide an opinion. What I discovered was:

 

  • The cost cutting project was cutting costs in core activities but left side-activities untouched because they were less costly. That way the future of the organisation became uncertain.
  • The IT project was supporting none of the existing processes. Implementing the IT project would lead to an increase in costs which exceeded the decrease obtained in the first project.
  • The other 5 projects were eager to adopt BPM, in allegory terms: one for building a church, one wanted to build a school, another project wanted to build villas, there was also an elderly home and the last project wanted just to destroy any building built by the 4 others.
  • All project managers were competing for the same company resources to have their project finished in time. The normal functioning of the organisation  became impossible.
  • The whole of the organisation 's strategy was formulated in 2 lines and consisted in an increase of market share and a decrease in costs.

The reason for this (meanwhile) hyper-crisis? The project managers had no idea of any quantification of the services which had to be delivered, nor the channel through which they had to be delivered. They were proceeding in the dark concerning the expected outcome of their projects. If the capabilities of their solutions were clear, the capacity of those capabilities were not.

The best way to ruin an organisation is to shoot in the wild with incoherent project outcomes and omit the formulation of any (quantified) strategy.

This is why the Business Segment matrix model (in management sciences also known as Ansoff's product/market matrix) is a core management tool / model in any organisation for alignment of the resources. This includes the periodic budget rounds  whereby the allocation of resources will depend on the strategic choices for future outputs.

Business Segment Matrix

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