Improving the effectiveness of indirect functions.

Collinson Grant reduced complexity in the managerial structure, refined R&D processes and improved cooperation with customers.

Caterpillar ACSD directly employs 6,663 FTEs (of whom 3,936 were in scope) and generates revenue of $4.2bn a year. We interviewed managers and analysed managerial and financial data. As a result, we found many working functions in a complex organisational model:

• Duplication of effort between business units, functions, and integrated project teams (IPTs) Discrete spans of control
• A deep structure with too many layers
• Too many interfaces.

We ran workshops for the senior team to work out ideas:

• to build on the concepts presented
• to challenge ‘rules and norms’
• to specify initiatives for improvement.

Caterpillar ACSD quickly adopted a new organisation, resulting in:

• better direction and control, with fewer senior Directors and Vice-Presidents
• redefined research and development processes and organisation at lower costs, saving $50m
• faster, cheaper, and better cooperation with the customer.