Optimization and Organizational Readiness for Change

(This is the third in the PuneTech series of articles on optimization by Dr. Narayan Venkatasubramanyan, an Optimization Guru and one of the original pioneers in applying Optimization to Supply Chain Management. The first one was an ‘overview’ case study of optimization. The second was architecture of a decision support system.

For Dr. Narayan Venkatasubramanyan’s detailed bio, please click here. For the full series of articles, click here.)

this is a follow-up to optimization: a case study. frequent references in this article to details in that article would make this one difficult to read for someone who hasn’t at least skimmed through that.

organizational dynamics

most discussions of optimization tend to focus on the technical details of problem formulation, algorithm design, the use of commercially available software, implementation details, etc. a fundamental point gets lost in that approach to this topic. in this piece, we will focus on that point: organizational readiness for change.

the introduction of optimization in the decision-making process almost always requires change in that process. processes exist in the context of an organization. as such, when introducing change of this nature, organizations need to be treated much the same way a doctor would treat a recipient of an organ. careful steps need to be take to make sure that the organization is receptive to change. before the change is introduced, the affected elements in the organization need to be made aware of the need for change. also, the organization’s “immune system” needs to be neutralized while the change is introduced. the natural tendency of any organization to attack change and frustrate the change agent needs to be foreseen and planned for.

the structure of the client’s project organization is critical. in my experience, every successful implementation of optimization has required support at 3 levels within the client organization:

  1. a project needs “air cover” from the executive level.
  2. at the project level, it needs a champion who will serve as the subject-matter expert, evangelist, manager, and cheerleader.
  3. at the implementation level, it needs a group of people who are intimately familiar with the inner workings of the existing IT infrastructure.

let me elaborate on that with specific emphasis on the first two:

an executive sponsor is vital to ensuring that the team is given the time and resources it needs to succeed even as changes in circumstances cause high-level priorities to change. during the gestation period of a project — a typical project tends to take several months — the project team needs the assurance that their budget will be safe, the priorities that guide their work will remain largely unchanged, and the team as a whole will remain free of distractions.

a project champion is the one person in the client organization whose professional success is completely aligned with the success of the project. he/she stands to get a huge bonus and/or a promotion upon the success of the project. such a person keeps the team focused on the deliverable, keeps the executive sponsor armed with all the information he/she needs to continue to make the case for the project, and keeps all affected parties informed of impending changes, in short, an internal change agent. in order to achieve this, the champion has to be from the business end of the organization, not from the IT department.

unfortunately, most projects tend to focus on the third of the elements. strength in the implementation team alone will not save project that lacks a sponsor or a champion.

ONGC’s HAL Dhruv Helicopters on sorties off the Mumbai coast. Image by Premshree Pillai via Flickr

let us examine the helicopter scheduling project in this light.

it could be argued that executive sponsorship for this project came from the highest possible level. i heard once that our project had been blessed by the managing directors of the two companies. unfortunately, their involvement didn’t extend anywhere beyond that. neither managing director helped shape the project organization for success.

who was our champion? there was one vitally important point that i mentioned in passing in the original narrative: the intended users of the system were radio operators. they reported to an on-shore manager in the electronics & telecommunication department. in reality, their work was intimately connected to the production department, i.e., the department that managed the operations in the field. as such, they were effectively reporting to the field production supervisor. the radio operators worked very much like the engineers in the field: they worked all day every day for 14 days at a time and then went home for the next 2 weeks. each position was manned by two radio operators — more about them later — who alternately occupied the radio room. as far as their helicopter-related role was concerned, they were expected to make sure that they did the best they could do to keep operations going as smoothly as possible. their manager, the person who initiated the project, had no direct control over the activities of the radio operator. meanwhile, the field production supervisor was in charge of maintaining the efficient flow of oil out of the field. the cost of helicopter operations was probably a miniscule fraction of the picture they viewed. because no one bore responsibility for the efficiency of helicopter usage, no one in the client organization really cared about the success of our project. unfortunately, we were neither tasked nor equipped to deal with this problem (although that may seem odd considering that there were two fresh MBAs on the team).

in hindsight, it seems like this project was ill-structured right from the beginning. the project team soldiered on in the face of these odds, oblivious to the fact that we’d been dealt a losing hand. should the final outcome have ever been a surprise?

other articles in this series

this article is the third in a series of short explorations related to the application of optimization. i’d like to share what i’ve learned over a career spent largely in the business of applying optimization to real-world problems. interestingly, there is a lot more to practical optimization than models and algorithms. each of the the links below leads to a piece that dwells on one particular aspect.

optimization: a case study
architecture of a decision-support system
optimization and organizational readiness for change (this article)
optimization: a technical overview

About the author – Dr. Narayan Venkatasubramanyan

Dr. Narayan Venkatasubramanyan has spent over two decades applying a rare combination of quantitative skills, business knowledge, and the ability to think from first principles to real world business problems. He currently consults in several areas including supply chain and health care management. As a Fellow at i2 Technologies, he tackled supply chains problems in areas as diverse as computer assembly, semiconductor manufacturer, consumer goods, steel, and automotive. Prior to that, he worked with several airlines on their aircraft and crew scheduling problems. He topped off his days at IIT-Bombay and IIM-Ahmedabad with a Ph.D. in Operations Research from the University of Wisconsin-Madison.

He is presently based in Dallas, USA and travels extensively all over the world during the course of his consulting assignments. You can also find Narayan on Linkedin at: http://www.linkedin.com/in/narayan3rdeye

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