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Friday, September 26, 2014

My Successful Team: Structure and Characteristics

I would like to discuss the team I was a part of at my internship at Zurich North America this past summer. I view this team as one of the most successful teams I have been a part of in my prior work experience. In order to protect my colleagues' identities, I will use pseudonyms when calling people by name. The team I was a part of was composed of fourteen people who served to support the many functions customer-facing insurance claims teams complete. This team comprised of two managers, and a team of ten analysts, a consultant, and an intern (me). Of the various structures of teams discussed in Bolman and Deal's Reframing Organizations, the team I was a part of had elements of multiple of these structures. Furthermore, as you follow the structure of this team from the top-down, three major structures can be found.

As previously stated, this team's management included two people: Jessica who oversaw all the operations of the team as a whole and Michele who was the middle manager who reported to Jessica and supervised the team directly. In this breakdown of management, the first identifiable structure of this team can be seen: a simple hierarchy (104). Following this structure, this allowed Jessica to focus on larger strategies and communicate with other top-level managers. Michele was able to provide us with direct advice and also directly observe our team's successes and failures. In this way, Michele could tailor the course of our work to our changing environments while still following Jessica's overall strategy therefore creating a more successful workspace.

Underneath this simple hierarchy, another Bolman and Deal structure could be found: a dual authority (104). Due to the many tasks my team was a part of, several analysts were named "subject-matter experts" (SMEs) to guide each task and report the progress of that task to Michele. In essence, these SMEs were another management level that could be found directly underneath Michele. Following the structure of a dual authority, this reduced Michele's need to communicate and direct each member which allowed time for her to focus on following Jessica's overall strategy.

Under the guidance of SMEs, tasks were completed in groups. Suppose there was a group of five members of the team: four analysts, one of them being the SME, and the intern, me. The way this group was structured followed Bolman and Deal's description of an all-channel, or star, network (105). Due to the complexity of some of the larger tasks, such as auditing the team's overall performance, multiple smaller tasks were required to complete the group's main objective. A great deal of autonomy was given to each member to complete their portion of the task at hand, and members would talk to each other on a regular basis to touch base on the progress of the overall task. Because of the complexity of the tasks, this structure made the group more successful than if there were, for example, a one-boss arrangement (103) in place.

This team also fit within Katzenbach and Smith's six characteristics of high-quality teams (111, 112). First, the team shaped its purpose in response to demands and opportunities placed by higher management. As a result of the simple hierarchy, Michele was able to guide our team in the direction of Jessica's overall strategic model and the miscellaneous demands or opportunities that Jessica might also put in place. Second, the team translated a common purpose into specific, measurable performance goals. These measurable goals were put in place across all levels of management; from Jessica down to SMEs. As I mentioned as well, groups audited the team's overall performance to see if our performance matched those goals set in place. Third, this team was of a manageable size; it fits Katzenbach and Smith's requirement of two to twenty-five people and strove to find the size of a group that would best fit a task. Fourth, the right mix of expertise was included within this team. Each team member was selected based upon their prior experiences, technical expertise, and overall previous performance. Moreover, Jessica and Michele sought to improve those skills and find other people to potentially become a member of the team. Fifth, through the use of responsibility charting, this team developed a common commitment to working relationships. SMEs were created to present a framework for responsibilities and to assign accountability to different groups and individuals. Finally, in conjunction with assigning accountability through the use of SMEs and following Jessica's overall strategy, this group was able to hold themselves collectively accountable.


As a disclaimer, while the team fit within the six characteristics defined by Katzenbach and Smith, problems did arise due to the complexity of the many tasks this team was a part of. In other words, this team was not perfect. Many tasks and structures are continually improved over time to adapt to changing environments and improve the team's overall performance. While this perhaps means that team falls out of a few of the characteristics described by Katzenbach and Smith, Bolman and Deal suggest that if leaders act accordingly, this can only make for an even more successful team (116). 






References:

Images of structures can be found at: Chapter 5 - Lee Bolman Powerpoint






Thursday, September 18, 2014

Opportunism - Getting Out of a Pickle


In 2007, my parents bought us concert tickets to see the double-platinum selling band The Fray at The Lawn at White River State Park in Indianapolis, Indiana on June 19. Coincidentally, my little league baseball team, the Georgia Bulldogs, was also very successful, and on the date of the concert, we were scheduled to play in a final four game in the playoffs. If we were to win this game, we would make it into the championship game. As we had these concert tickets for a few months before the concert, my parents left the decision whether to go to the game or the concert up to me. This was a true dilemma for a seventh grader to make: see one of the most popular bands of the time or help your team make it to a championship. Moreover, this is a decision that tempts opportunistic ideals—taking advantage of one's circumstances—to dominate a decision that may be less ideal in the moment but more ideal in the end.

After short deliberation, I chose to play in the game for several reasons. First, I believed that I put a lot of hard work into the rest of the baseball season, so I did not want to cheat myself by putting in less work in a more critical moment in the season. Second, I believed that the rest of my team also put a lot of hard work into the season. It would not have been fair for me to take a night off when the rest of the team would be playing for a championship. Third, I wanted to help my team in any way that I could to make it that championship game. The smallest play such as a fly ball to center field, my position at the time, or the potential of having a great hit could affect an entire game. Putting people other than myself in those positions would not be fair to those people. Finally, I would not have felt deserving enough to play in the championship game if the team made it without any of my contributions. A good analogy for this would be if somebody completed all of the homework in a class and somebody did not complete all of the homework in a class, but both people received an equal grade. An overall theme of the classic saying, "hard work will always pay off in the end," can be found in these decisions.

While, "hard work will always pay off in the end," summarizes my decisions well, I want to narrow this idea down into a category that encapsulates not only moral themes but also decision making. The reasons for why I chose to play in the game instead of going to a concert can truly be summarized by one's personal, ethical decision-making. Deciding to go to a concert and blow off one of the most important games of the season was completely against my personal, ethical standards. Had I missed the game and gone to the concert, I would have violated the morals by which I make most decisions. Furthermore, if my team had made it to the championship game without my help, this would have only amplified the guilt I would feel from violating these standards. You could say that each member of the team had an unwritten contract with the other members to put in their share of time. By going to the concert, I would be in violation of this unwritten contract and not fulfill my end of the bargain. The costs of breaching this contract, violating my own ethical codes and feeling guilt clearly outweighed the benefits of seeing The Fray. Overall, my personal, ethical decision-making was the overall category of each of my decisions.

To end on a lighter note, and for what interest it may bear to readers, my team did make it to the championship game that night. Our team played brilliantly, and in one of the last innings, I hit a ball to the fence 250 feet away from where I stood at home plate resulting in a scoring run that helped to seal our victory. If it had not been for the ethical decision I had made, I would have certainly not had the opportunity to contribute to my team that night and fulfill my end of our team's unwritten contract.


Images found at:
http://gototen.org/wp-content/uploads/2011/11/photo_1152750_landscape_large_dossier.jpg
http://sewingfinethingsandmore.com/images/000001.bmp

Friday, September 5, 2014

Zurich Organizational Structure and Transaction Costs

Zurich Insurance logo as found on http://www.zurich.com

Over this past summer, I worked as a Claims Intern for Zurich North America at its headquarters in Schaumburg, Illinois. Zurich Insurance is a large, global insurer that provides insurance products to over 170 countries. Its global headquarters is located in Zurich, Switzerland and it has five main regions of operation that include North America, Latin America, Europe, the Middle East and Africa and Asia Pacific. Depending on the region of operation, Zurich provides insurance to individuals and from small to large organizations.

Looking at Zurich Insurance as a whole, as with many large, global organizations today, its organizational structure becomes increasingly complex as you move farther and farther away from its global headquarters in Switzerland. Looking into back into economic history, it is similar to GM's multidivisional structure that was visualized and created by Alfred Sloan throughout the 1920s, 30s, and 40s in that its central office is not responsible for its day-to-day operations. Instead, its central office's role is to audit and evaluate divisional performance and also plan and coordinate overall strategy (Milgrom and Roberts 3). For example, one of Zurich's strategies biggest components is "Who we are, what we are and how we do it". This foundational principle and most of the other big-picture strategies and mottos that I was taught during my time there were developed in Switzerland.

The principles that I learned also coincide with Zurich's overall strategy of growth and gaining new, large customers. The organization is currently undergoing a change to "streamline" its organizational structure. In a news release on March 11, 2014 the proposed changes would total to USD 250 million by the end of 2015 and could eliminate as many as 800 jobs throughout their global organization. Although, it is also noted that this change will not affect customer-facing positions, so while this may not directly affect the customer, it will certainly affect both employees of the organization and investors. Also, considering there are over 55,000 employees of Zurich across the globe, this may not affect the organization negatively in a noticeable way.

This organizational change may affect the exact number of employees across the globe, but there was still an incredibly large number of people were also employed at the location I worked at. Not only did this provide for a lengthy organizational chart, but it also meant that constant communication was necessary to keep the gears turning smoothly. While a lot of communication did occur in conference calls and various meetings, most of the communication was done in the form of an email. There are various transaction costs of coordinationcosts associated with the need to determine details of a transactionthat can be found with this type of communication across any large organization. Most information is communicated up an organizational hierarchy. Costs can be found in not only the time necessary to communicate but also in the dissemination of the information being communicated. I also noticed that this information was misinterpreted on a regular basis. It is no surprise that in communicating from person to person, information can either be lost or inaccurately communicated. This can be considered a transaction cost of maladaptation because decision makers may or may not have insufficient or inaccurate information (Milgrom and Roberts 29).




Sources:

Milgrom, Paul and John Roberts. Economics, Organizations & Management. Upper Saddle River, New Jersey: Prentice-Hall, Inc., 1992. Print.

http://www.zurich.com/en/about-us/strategy/our-strategy

http://www.zurich.com/en/about-us/a-global-insurer/where-we-operate

http://www.zurich.com/en/investor-relations/shareholder-information/letter-to-shareholders

http://www.zurich.com/en/media/news-releases/2014/2014-0311-01

Wednesday, September 3, 2014

About Me

My name is George Akerlof. I was born on June 17, 1940. My alma maters include Yale University (B.A.) and M.I.T. (Ph.D.). I was also a Professor of Economics at the University of California, Berkley. In 2001 I won the Nobel Memorial Prize in Economic Sciences with Michael Spence and Joseph E. Stiglitz for our analyses of markets with asymmetric information. 


Sources: 


http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/ 

http://en.wikipedia.org/wiki/George_Akerlof