In today’s rapidly evolving business landscape, organizations must be agile and capable of redesigning themselves to stay competitive. This case study explores how Healthways Corporation used a self-design approach to transform its organizational structure and enhance overall performance.
The Context of Healthways Corporation
Healthways Corporation (HMC), a provider of specialized disease management services, recognized the need to redesign its organization in anticipation of rapid growth in its health plan business. Established in 1981, HMC initially focused on hospital management and later shifted to providing disease management services for health plans. By 2002, as revenues from health plans grew, the existing organizational structure was deemed insufficient to support future growth.
Emergence of Performance Challenges
HMC faced several challenges that necessitated a structural overhaul:
Lack of Clear Vision: The organization lacked a well-defined vision and a "Big Hairy Audacious Goal" (BHAG) that would guide strategic changes.
Inadequate Structure: The existing structure was not aligned with the strategic objectives and could not support the expected growth in the health plan business.
Need for Process-Based Structure: There was a recognized need to shift to a process-based structure to enhance efficiency and responsiveness.
The Role of Self-Design Intervention
To address these challenges, HMC implemented a self-design strategy, which involved several key steps:
Formation of Task Forces: Three Organization Design and Development (ODD) task forces were formed. Each was responsible for different stages: laying the foundation, designing the structure, and implementing the new design.
Knowledge Acquisition: The first task force focused on acquiring knowledge about organization design, interviewing other organizations, and studying change processes. This phase highlighted the need for a clear vision and strategy.
Designing the Structure: The second task force developed three alternative structures, ultimately recommending a process-based structure. This structure emphasized core processes such as understanding the market, acquiring and retaining customers, building value solutions, delivering solutions, and managing the business.
Implementation and Continuous Improvement: The third task force, composed of senior management, focused on implementing the new structure and developing long-term templates for continuous improvement.
Implementation and Support
The successful implementation of HMC’s self-design strategy was supported by:
Engaged Leadership: Senior leaders were actively involved in the process, ensuring alignment and commitment across the organization.
Inclusive Process: Employees from various functional areas participated in the design and implementation, fostering a sense of ownership and engagement.
Continuous Learning: The iterative nature of the self-design approach allowed for ongoing assessment and refinement of the organizational structure.
Outcomes and Reflections
The self-design approach at HMC led to several positive outcomes:
Enhanced Efficiency: The process-based structure improved coordination and efficiency across different functions.
Clear Strategic Direction: The organization developed a clearer vision and strategic goals, aligning the structure with business objectives.
Improved Performance: The new structure supported better decision-making and responsiveness to market changes, contributing to overall business performance.
Implications for Organizational Development
HMC’s experience underscores the importance of a flexible and inclusive approach to organizational design. Key takeaways include the need for a clear vision, engaging employees in the design process, and adopting a continuous improvement mindset. Organizations can learn from HMC’s approach by prioritizing strategic alignment and employee engagement in structural changes.
Conclusion
Healthways Corporation’s transformation through self-design demonstrates the significant impact of a well-executed organizational redesign. By engaging employees and focusing on continuous improvement, HMC successfully aligned its structure with its strategic goals, enhancing efficiency and performance.
Connect with OrgEvo Consulting
At OrgEvo Consulting, we specialize in helping organizations implement effective self-design strategies. Our services include strategic planning, organizational design, and change management tailored to your unique needs. Contact us today to learn how we can support your organization in achieving excellence.
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