Boxology: The Mythical Science of Organizational Change

 

Altering the organization’s structure might be necessary, but approaching change by changing the organization chart alone is insufficient in most cases. Over the years, a pseudo-science has emerged that focuses on finding the perfect organization chart. We call this boxology. Even if a perfect organization chart did exist (with the right spans of control, optimal layers of management, proper placement of talent, clear decision rights, etc.), structure is just one aspect of organization design.

Organizations are complex systems, with changes in one area cascading and sometimes setting off changes throughout the entire system. Moreover, organizations operate in complex environments with market forces, competitors’ behaviors, and regulatory requirements demanding that an organization continually change and adapt.

One risk of boxology is that it ignores the interdependency of organizational components like work, culture, structure, metrics, rewards, etc. It ignores the deep connections of those components to forces at play in the organization’s environment. It also ignores the reality of how work is done, who makes decisions, and how resources are allocated. Truly effective organization design is about finding the optimal alignment of all of these components—not simply trying to optimize the structure of the organization. Indeed, structure only enables or disables strategy. In and of itself, structure doesn’t create or deliver value to the customer.

Companies don’t usually transform themselves into their aspirations unless leaders have thoughtfully considered the dynamics of their business environment, the changing needs of customers, and the degree to which their current capabilities and talent can successfully meet those conditions. Leaders need to make fundamental strategic choices and then align the org structure and the many systems of the organization (technological systems, reward and compensation systems, recruiting and talent management systems, etc.) to that strategy. They need to align decision-making rights, resource allocation, even assess the culture of an organization in order to reach the new desired state. It’s a little more complicated than moving boxes.

Learn how we helped GE Energy Services redesign their organization.