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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 several Project 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 of the most 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.

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.

STRATEGIC FRAMEWORK

Organizational mastery of PM requires the co-alignment of Strategy, Structure and Culture in the Environment Domain.

Achievement

Top Performers

The Work

How?

Expertise

Work Projects

Competitiveness

COMPETENCE

CULTURE

THE FOUR ARCHETYPAL ORGANIZATIONAL CULTURES

CULTURE

Doing projects with heavy control

In the mind of your employees

Unleashing very creative people

In the Mind of Customers

Draw the Culture egg for VBHC

• It is a start-up development and construction company.• It seeks to exploit a niche that has not yet been attended.• It plans to run approximately 50 projects simultaneously at various stages

of development. 1 Million Units in 10 years / 2000 units per project• It seeks to achieve scale economies and efficiencies in using scarce

equipment and people.• Most company’s specialist are dedicated to a project team and must be

shared across projects.• Specialists reports to PM and Functional Managers• PMs negotiate with one another to reserve functional resources• PMs evaluate the performance of people working in their team• Specialists are organized in functional Silos but they are allocated to

different projects.

An organization’s “culture egg”

Company Culture Egg

STRATEGY

By 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.

Lower Costs

Volume operations/ cost leadership

Higher Revenues

Complex systems/ differentiation

Operational excellence

Customer Intimacy

Product leadership

Disruptive innovation

Focus Process efficiently

Customer experience

Offer quality Categorical differentiation

Orientation to time

Internal timing

Customer response time

Competitive response time

Time to adoption

Key Metric Number of misses

Customer re-purchase

Product Specifications

10x advantage

Culture Fit Control Culture

Collaboration Culture

Competence Culture

Cultivation Culture

Organizational leadership from

Operations finance

Marketing, customer support

Engineering, Sales

R&D

Become the industry cost leader through “ volume operations”• Increase market share

to build scale economies

• Grow sales• Acquire competitors• Invest in driving down

the cost of processes• Design, manufacturing,

sales, purchasing, logistics…

• Focus on lowest cost

Cost Leadership Strategy

Fundamental Strategy – Alignment with Culture

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.

STRATEGY Does your strategy align with your Culture ?

STRUCTURE

Elements of the organization structure

• Individual Positions• Unit Grouping• How the unit is grouping? By function, product or project?• Decision making• Where the decisions get made?• Incentives

• Outcome vs. Process?• Individual vs. Group?

In collaboration cultures people are often compensated by processes. (If you accomplish with all the processes you will be compensated. You can be compensated if you are a good player. They use 360 evaluations)

In Competence and Control Cultures we can see rewards compensated by outcomes.

Decision making

Where the decisions get made?

• Vertical vs. Horizontal decentralizationVertical decentralization: The decisions are made at the top or decisions are made at every level. They delegate autonomy to workers.

Horizontal decentralization: There is a group of specialized functions. Each functional department creates rules. The CEO delegates horizontally to staff support groups who can create processes, rules, guides, procedures, etc.

How much Horizontal decentralization?

How many specialized functional divisions?

Who thinks vs. who does?

STRUCTURE Matrix structure – managers have two/+ bosses

Problems to overcome in Matrix Structures

• Matrix Structures can balance two competing objectives• Be highly responsive to changing customer/ market needs.• Nurture and share high levels of technical excellence.• Matrix Structures can support twin strategic objectives• Produce technically differentiated projects• Support lower costs through better allocation of resources.

STRUCTURE

“ Strong Matrix”– (emphasizes project control) “ Weak Matrix”– (emphasizes functional control)

Strong Vs. Weak Matrix Structures (Which one is more appropriate for this company?)

In this matrix people is still living in the functional departments. The loyalty is to the

functional manager.

STRUCTURE Matrix Structures : the fundamental tradeoff

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

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.

Strong Matrix

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.

Co-located, empowered

project teams

Discipline-based, functional silos

STRUCTURE & STRATEGY

Weak matrix

structure

Product leadership

Aligning structure with strategic value discipline

Weak matrix aligns with Competence culture

Matrix Strength

MANAGEMENT TEAM

Design / Engineering / Construction

Business Organization

Specialized Support Functions

Director Operations

VP Operations

VP Design & Planning

Head Technical

VP Materials & Contract

Managing Director

Head Structural

Engineering

Regional CEO Kama

taka

Regional CEO

Andhra Pradesh

Regional CEO Tamil

Nadu

Regional CEO Western Region 1


Head Corporate

Relationships

National Sales Head

Chief Financial Officer

Head School System/ Training

Chief Technology

Officer

Land Acquisition,North India

Resident Architect

Industrial construct

Planning

Sustainability Architect 1

Sustainability Architect 2

STRUCTURE Current Organizational Structure

STRUCTURE Functional Departments (Silos)

COO

Design & Planning Department

Engineering Department

Construction Department

Financial Department

Legal Department

Sales & Marketing Department


Functional Departments

Managing Director

Development & Operation Department

Master Planning Department

Design Department

Design-Build Department

Design, Production & OperationsEstimating

Department

Health, Safety &

Environment

Equipment & Technology

Construction Management

Corporate

Real Estate

Zoning and Land Use

Marketing

Support Functions

SalesComptroller

Acquisitions & Procurement

Policy & Business

Integration

Financial Management

Accounting Department

Corporate Relationships

School System/ Training

Technology Department

HHRR Department

Quality Assurance Office

Board of DirectorsPMO Office

STRUCTURE MATRIX ORGANIZATIONAL STRUCTURE

Director of Operations






Legal Department



Project N 1

Project N 2

Project N 3

Project N 4 (pipeline)

Project N #

Director of Operations






Legal Department



Vaibhava

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

Staff

• Employees move between functional & project departments• Members of 2 organizations• PM’s have primary control over resources and project direction• Functional mangers = advisory role • Functional managers supervise plan and goals as set by PM

Blue boxes represent staff engaged in project activities

Project Coordination

Project Manager

Project Manager

Project Manager

Functional ManagersFunctional Staff allocated to a project

STRUCTURE

COO






Legal Department



Legal Director Sales & Marketing Director



Head of Technical

VP of Operations

VP of Construction

Head Corporate

Relationships


Chief Technology

Officer

HHRR Director

Regional CEO Kama

taka

Regional CEO

Andhra Pradesh

Regional CEO Tamil

Nadu



COO

PROJECT N1

Senior Project Manager Construction Manager

Legal Director Sales & Marketing Director



Head of Technical

VP of Construction

VP of Operations

PROJECT N2


PROJECT N….50


Project Coordinator

FUNCTIONAL DEPARTMENTS

Managing Director

Direct Functional Communication Chart (VP of Operations)

PROJECTS

COO






Legal Department



Legal Director

Real Estate Attorney

Senior Project Manager

Zoning and Land Use Att

Corporate Attorney

Lobbyist / Expeditors

Sales & Marketing Director

Marketing Specialist

Market Analyst

Graphic Designers

Event Manager

Web Designers

CRM

PR Communication

Manager


General Account Manager


Head of Technical

VP Materials & Contracts

Safety Director

Chief Estimator

VP of Operations VP of Construction

Urban Planner

Master Planner

Senior Architect

Sustainability Architect

Landscape Architect

Interior Designer

Interior Decorator

Head of Structural

Engineering

Structural Engineer

Civil Engineer

Electric Engineer

Mechanical Engineer

Industrialization of

Construction

Environmental Engineers

Traffic Engineer

Surveyor Geotechnical Engineers


Director

Construction Manager

Head Corporate Relationships


Chief Technology Officer

Deputy Comptroller

Deputy

Director FM

Deputy P & B.I.

Deputy Chief Acquisitions Officer & Director Procurement

PROJECT N1

STRUCTURE Resources by Functional Departments

Projects Coordinator


Master Planning Department Design Department Design-Build Department


Senior Architect/s

Sustainability Architect/s

Landscape Architect/s

Interior Designer/s

Interior Decorator

Architect/s

CAD Operators Rendering

Senior Architect/s

Sustainability Architect/s

Landscape Architect/s

Interior Designer/s

Interior Decorator/s

Architect/s

CAD Operators Rendering

Urban Planner/s

Master Planner/s


Head of Structural Engineering

Structural Engineer/s

Civil Engineer/s

Electric Engineer/s

Mechanical Engineer/s

Industrialization of Construction

Environmental Engineers

Traffic/ Transportation Engineer

Surveyor

Design, Production & Operations

Structural Engineer/s

Civil Engineer/s

Electric Engineer/s

Mechanical Engineer/s

Traffic Engineer

Surveyor

Geotechnical Engineers

Head of Technical

STRUCTURE Planning, Design and Engineering Department Organization

VP of Construction

Estimating Department Purchasing DepartmentHealth, Safety & Environment

VP Materials & Contracts

Equipment & Technology

Chief Estimator

Senior Estimator

Estimator

Assistant Estimator

Quantity Surveyor

Procurement Manager

Receptionist

Purchaser Coordinator

Health, Safety & Environmental coordinator

Safety Director

Health, Safety & Utilities coordinator

Safety & Claims Administrator

Head of Technical

Scheduling Coordinator

Assistant Scheduling

Coordinator


CM Director

CM 1

Senior Project Superintendent

Project Superintendent

Assistant Project Superintendent

Project Engineer

Site Administrator

Foreman

Laborers Operators

PROJECT N1

STRUCTURE Construction Department Organization



ComptrollerAcquisitions & Procurement Policy & Business Integration

Deputy Comptroller

Resources Planning Division

Deputy Chief Acquisitions Officer & Director Procurement

Deputy P & B.I.

Budget Formulation & Policy Branch

Institutional Analysis Branch

Strategic Investments Division

Strategic Planning Branch

Program Analysis Branch

Cost Analysis Division

Policy Integration

Business Process Management

Financial Information Management

Quality Assurance Office


Contract Management Division

Procurement Operations Division

Procurement Analysis Division

Financial Management

Deputy Director FM

Financial Operation Division

Analysis Reconciliation Division

Accounting Department

General Manager Accounting

Senior Support Assistant

Payroll Supervisor

Accounts Payable Supervisor

Accounts Payable Clerk

Treasurer

Taxation

STRUCTURE Financial and Accounting Organization

Legal Department

Corporate Real EstateZoning and Land Use

Claims/ Litigation

Z & LU Legal Director

Z & LU Attorney

Lobbyist / Expeditors

Contracts / JV / etc Due Diligence Attorney

Closing Attorney


Graphic Designers

Event Manager

Legal Director

Web Designers

Marketing Specialist

CRM

PR & Communication Manager

Marketing Support FunctionsSales

Sales & Marketing Director

In-house Sales Force

Market Analyst

STRUCTURE Sales, Marketing & Legal Organization