He calls in consultants and despite coaching and assistance some of the old team members remain working at the levels where they are comfortable. The CEO, frustrated, takes over the strategic project work himself. Some of the old team are not capable of stepping up to the new mark and as a result progress is slow and results patchy. The organisation is not prepared for this transition and there is no change management process to assist this stepping up.
His executive team battle to deal with the challenge of the emergence of the new level.
#Subsume to their full#
This requires shifting the organisation a full level of complexity - never an easy challenge but the CEO is confident, capable and energetic. The management ethos of floggings will continue until morale improves sums up a culture where recriminations, loss of focus on the client and internal politics are manifest of a collapse of vertical levels of works structure.Ĭost efficiencies and cost reduction (rather then wealth management and its creation) became the SBU focus as the more complex levels were subsumed by the Group CEO and ExecutiveĮxample 2- picture a CEO in a medium sized business of 650 employees, setting an ambitious intent. Stung by board accusations the Group CEO became involved in day to day management of the SBU and this micro management of the executive team, who undermined, lost long term focus and accountability and with that, their authority. The group executive, (whose Unique Value Add is not leading individual SBUs) - panicked and appointed a short term CEO to "fix it". In the Group portfolio of assets one SBU (originally the flagship) hits problems after a succession of short lived CEOs under whose watches the SBU lost reputation, damaged its brand through price warfare, became bloated with additional employees and ended up with a sliding market share. A dictionary definition is- to include or place within something larger or more comprehensive : encompass as a subordinate or component element eg Įxample 1: picture an international organisation with five Strategic Business Units (SBUs) in different countries Each SBU is characterised by >6,000 employees, listed with an independent board, owner or part owning a numerous of smaller enterprises, JVs with significant players, vigorous and sometimes competing R&D teams and household name brands. When options include "subsuming" as an organisational design option, chances are that the organisation is in or will be in crises.
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