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Consulting - Stanford Strategic Framework for Matrix Structures
1. Strategic Execution Framework – VP of Operations This document has been prepared for the role of the VP of operations for a fast-growing company in India. Objective: align the company strategy with its current projects, meet the operations and profit goals and prepare the organization for a rapid and aggressive expansion. I surveyed the existing organizational structure and the resources that the VP of Operations would need to manage in order to suggest the best structure to fit its culture and strategy. Within a Matrix organization, the VP of Operations will lead severalProject Managers simultaneously and he will help them to get the resources from several Functional Departments, to keep the projects on track, and he will supervise and interact with each Functional Manager. He will have a direct communication with the COO and he will communicate directly with Functional Managers (VP Level) and Project Managers. He will be responsible for managing the Project Managers to accomplish their projects on time, with the quality specified and within budget. Influence people will be one ofthemost important functions. He will bring the experience and the ability to create and lead a very efficient matrix organization structure, capable to handle approximately 50 projects simultaneously and support the company rapid and projected growth. This document shows how the VP of Operations can help the company to align its culture, strategy and structure to meet the company’s strategic goals. The document shows effective management techniques that I learned while I was completing my advanced project management certification at Stanford University. The VP of Operations will have to provide leadership, planning, direction, managing costs and tracking progress for almost 50 projects simultaneously, (2000 units per project) and be responsible for the execution of the organization strategic goals. Francisco J. Gonzalez Mr. Gonzalez holds an Advanced Project Management Certification from Stanford University, a BS of Architecture from the University of Buenos Aires and he attended a Masters in Real Estate Development at Universidad Politecnica de Madrid. Francisco has executed an extensive number of complex transactions in United States and Latin America and he has broad experience in project management, acquisitions, strategic planning, business consulting, financial management, marketing & portfolio management, across different Investment sectors. During his career, he has led projects valued in excess of $500 million dollars. Mr. Gonzalez was previously a founding partner and Development Director at Baresa (BA Real Estate SA), where he led the development and management of well known residential and mixed-used projects in Argentina. He currently act as a Board member.
2. STRATEGIC FRAMEWORK Strategic Execution Framework The Strategic Execution Frameworks (SEF) is a powerful management model that will help ensure that your critical initiatives are on track to achieve their intended results.
3. CULTURE THE FOUR ARCHETYPAL ORGANIZATIONAL CULTURES COMPETENCE Achievement Top Performers The Work How? Expertise Work Projects Competitiveness Organizationalmastery of PM requires the co-alignment of Strategy, Structure and Culture in the Environment Domain.
17. Focus on lowest costBy getting bigger the company is allocating fix costs over a bigger product base and the costs come down as the volume goes up. Your power of negotiation increase is you manage several projects.
18. Does your strategy align with your Culture ? STRATEGY Note: Based on my understanding you would like to have a Collaboration Culture, with Horizontal decentralization, but I believe that your strategy is a Product Leadership strategy that is the perfect fit for a MATRIX STRUCTURE In order to achieve your goals the strategy should be aligned with your Culture. My first impression is that a Competence Culture is more appropriate for the type of company that you are creating and the amount of projects that you are planning to run simultaneously. You will have teamwork and collaboration but the company will operate as a factory to handle 50 projects simultaneously.
32. Support lower costs through better allocation of resources.Problems to overcome in Matrix Structures
33. Strong Vs. Weak Matrix Structures (Which one is more appropriate for this company?) STRUCTURE “ Strong Matrix”– (emphasizes project control) “ Weak Matrix”– (emphasizes functional control) In this matrix people is still living in the functional departments. The loyalty is to the functional manager.
34. STRUCTURE Matrix Structures : the fundamental tradeoff Co-located, empowered project teams Discipline-based, functional silos Weak means that the project direction is weak and the functions direction is strong Strong means that the project direction is strong and the functions direction is weak Matrix strength Strong Matrix In this matrix primarily the people are aligned to projects with a weak functional overlay. The Roles and responsibilities as such the people view their primary loyalty to their project manager and that will influence the day by day decisions. Who decides the allocation of people in the organization? The most aggressive PM will get the resources. The success as a PM handles in negotiate for good people. Weak Matrix In this matrix primarily we want technical excellence. With very stable and predictable markets with life cycles in decades, a functional organization works fine. If a company has 100 projects and each one in a different stage of the cycle you need a matrix where the PM and FM negotiate and also a PM will negotiate with other PM and they can do it in a variety of ways. Sometimes senior executives assign resources to the projects based on necessities and strategy.
35. STRUCTURE & STRATEGY Aligning structure with strategic value discipline Matrix Strength Product leadership Weak matrix structure Weak matrix aligns with Competence culture
36. Current Organizational Structure STRUCTURE MANAGEMENT TEAM Design / Engineering / Construction Specialized Support Functions Business Organization Regional CEO Western Region 2 Regional CEO Kama taka Regional CEO Andhra Pradesh Regional CEO Tamil Nadu Regional CEO Western Region 1 Managing Director Director Operations Chief Technology Officer VP Operations VP Design & Planning Head Technical VP Materials & Contract Head Corporate Relationships National Sales Head Chief Financial Officer Head School System/ Training Land Acquisition, North India Head Structural Engineering Resident Architect Sustainability Architect 1 Industrial construct Sustainability Architect 2 Planning
37. Functional Departments (Silos) STRUCTURE Functional Departments Managing Director Board of Directors PMO Office COO Design & Planning Department Engineering Department Financial Department Legal Department Sales & Marketing Department Development & Operation Department Construction Department Specialized Support Functions Master Planning Department Construction Management Zoning and Land Use Marketing Financial Management HHRR Department Sales Corporate Relationships Design Department Equipment & Technology Corporate Comptroller Support Functions Design-Build Department Real Estate Acquisitions & Procurement Technology Department Estimating Department Policy & Business Integration Design, Production & Operations School System/ Training Health, Safety & Environment Accounting Department Quality Assurance Office
43. Direct Functional Communication Chart (VP of Operations) STRUCTURE Managing Director COO Design & Planning Department Engineering Department Financial Department Legal Department Sales & Marketing Department Construction Department Development & Operation Department Specialized Support Functions VP Design & Planning Sales & Marketing Director Head of Technical Legal Director Chief Financial Officer VP of Construction VP of Operations COO Regional CEO Kama taka Regional CEO Andhra Pradesh Regional CEO Western Region 2 Regional CEO Tamil Nadu Regional CEO Western Region 1 VP of Operations FUNCTIONAL DEPARTMENTS VP Design & Planning Sales & Marketing Director Head of Technical Legal Director Chief Financial Officer VP of Construction Head Corporate Relationships PROJECTS Project Coordinator PROJECT N1 Chief Technology Officer Senior Project Manager Construction Manager PROJECT N2 Head School System/ Training Senior Project Manager Construction Manager PROJECT N….50 HHRR Director Senior Project Manager Construction Manager
44. Resources by Functional Departments STRUCTURE COO Design & Planning Department Engineering Department Financial Department Legal Department Sales & Marketing Department Construction Department Development & Operation Department Specialized Support Functions VP Design & Planning VP of Operations Head Corporate Relationships Sales & Marketing Director Head of Technical Legal Director Chief Financial Officer VP of Construction Real Estate Attorney Marketing Specialist General Account Manager VP Materials & Contracts Urban Planner Head of Structural Engineering Chief Technology Officer Projects Coordinator Master Planner Senior Project Manager Zoning and Land Use Att Market Analyst Safety Director Head School System/ Training Senior Architect Industrialization of Construction Deputy Comptroller Construction Manager Corporate Attorney Graphic Designers Chief Estimator Sustainability Architect Deputy Director FM Environmental Engineers Web Designers PROJECT N1 Landscape Architect Construction Management Director Lobbyist / Expeditors Event Manager Deputy P & B.I. Traffic Engineer Interior Designer CRM Deputy Chief Acquisitions Officer & Director Procurement Interior Decorator PR Communication Manager Structural Engineer Civil Engineer Electric Engineer Mechanical Engineer Geotechnical Engineers Surveyor
45. Planning, Design and Engineering Department Organization STRUCTURE Engineering Department Design & Planning Department Design, Production & Operations Design Department Design-Build Department Master Planning Department Head of Technical VP Design & Planning Senior Architect/s Senior Architect/s Urban Planner/s Head of Structural Engineering Architect/s Architect/s Master Planner/s Industrialization of Construction Environmental Engineers Sustainability Architect/s Sustainability Architect/s Landscape Architect/s Landscape Architect/s Interior Designer/s Interior Designer/s Interior Decorator Interior Decorator/s CAD Operators Rendering CAD Operators Rendering Traffic/ Transportation Engineer Traffic Engineer Structural Engineer/s Structural Engineer/s Civil Engineer/s Civil Engineer/s Electric Engineer/s Electric Engineer/s Mechanical Engineer/s Mechanical Engineer/s Surveyor Surveyor Geotechnical Engineers
46. Construction Department Organization STRUCTURE Construction Department VP of Construction Construction Management Purchasing Department Estimating Department Health, Safety & Environment Equipment & Technology VP Materials & Contracts CM Director Safety Director Head of Technical Chief Estimator Procurement Manager Senior Estimator Estimator Health, Safety & Environmental coordinator CM 1 Purchaser Coordinator Senior Project Superintendent Health, Safety & Utilities coordinator Assistant Estimator Quantity Surveyor Receptionist Project Superintendent Safety & Claims Administrator Scheduling Coordinator Assistant Project Superintendent Assistant Scheduling Coordinator Project Engineer Site Administrator Foreman Laborers Operators PROJECT N1
47. Financial and Accounting Organization STRUCTURE Quality Assurance Office Financial Department Chief Financial Officer Financial Management Comptroller Acquisitions & Procurement Policy & Business Integration Deputy Chief Acquisitions Officer & Director Procurement Deputy P & B.I. Deputy Comptroller Deputy Director FM Financial Operation Division Policy Integration Resources Planning Division Contract Management Division Analysis Reconciliation Division Financial Information Management Budget Formulation & Policy Branch Procurement Operations Division Business Process Management Institutional Analysis Branch Procurement Analysis Division Strategic Investments Division Accounting Department Strategic Planning Branch General Manager Accounting Treasurer Program Analysis Branch Senior Support Assistant Cost Analysis Division Taxation Payroll Supervisor Accounts Payable Supervisor Accounts Payable Clerk
48. Sales, Marketing & Legal Organization STRUCTURE Lobbyist / Expeditors Legal Department Claims/ Litigation Legal Director Corporate Real Estate Zoning and Land Use Z & LU Legal Director Contracts / JV / etc Due Diligence Attorney Z & LU Attorney Closing Attorney Sales & Marketing Department Sales & Marketing Director Marketing Support Functions Sales Marketing Specialist In-house Sales Force Graphic Designers Web Designers Market Analyst Event Manager CRM PR & Communication Manager