The software development unit of a Fortune 100 financial services organization was intended to be a model for other internal IT groups. It was created as a separate business unit with broad authority to create its own work rules. It was hoped that workplace innovations that succeeded there could be applied to other IT units to improve overall performance in a sprawling global IT organization. Without knowing it by name, the unit’s leadership group created an internal network structure where flexible project teams reported directly to a streamlined core management team. The basic idea was that management would provide oversight and assign (and re-assign) resources to project teams on an as-needed basis. It was believed that such a structure could accommodate more than 200 employees. Within 15 months after its formation, the organization was struggling. Project deadlines were being missed at an increasing rate, inter-team communication had become limited, and management seemed unable to make corrections.
A complete structural assessment project was undertaken to better understand the current-state organization. This included an analysis of the work rules and charter developed by management, a review of the core project and resource management processes, and social network analyses of several relationship types believed to be driving a dominant informal structure (e.g., technical expertise and friendship). It was determined that insufficient work rules and position descriptions were put in place during the initial design. Lacking clear rules, the original network structure was starting to mimic self-governing models. In this case, an informal structure based on social bonds (friendship-based interactions) was applying a disproportionately powerful force on the organization. The solution was to redefine the organization’s governance model, work rules, and job descriptions to better align them to the primary production and planning processes. Once these changes were put into place, the performance management plan was revised to further link manager and employee work activities with strategic objectives.
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