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
Organizations often have their own specific third rails—sensitive topics that are so highly charged that no one feels they can survive trying to address a problem or change needed. Sometimes these are long overdue changes where a powerful executive shuts down discussion. And so the organization continues irrationally behaving the
So you have to make cuts. Make sure they’re the right cuts. “Here I am—most unwelcome, I know. Against my own will, too, since no one loves a messenger who brings with him bad news.” Sophocles’ play Antigone expresses well the distaste of delivering bad news. It’s one of the toughest parts of being a leader. And often the bad news is that costs must be cut.
Only by living in a house do we come to know intimately the many disadvantages of our particular structure. Depending on our attitude, this may become all we see. We may long for another house – one without the downsides that daily irritate us. We romanticize about how much better our lives would be in that other house, without those issues that have fatigued us. But we may learn that another house brings a new set of downsides. Sometimes it makes sense to give up our current structure and move to another house, but sometimes we learn we’ve just traded one set of problems for another.
Everyone has limited resources. Everyone must choose where value will and will not be offered. Understanding and appreciating this enables organizations to focus limited resources on the most strategic and differentiating activities. It enables leaders to be smart about where they prune costs. Believing that your organization can do everything—that it can be everything for everyone—prevents an organization from really differentiating itself in a sustainable way.
The typical organizational design process is like drawing a blueprint, building a house, and moving in. This is the familiar strategy-structure-staffing sequence that has come to dominate the practice. Ongoing organization effectiveness work in emerging markets is revealing that this tried and true pattern for effective organization design still applies, but there are some unique considerations that need to be grappled during the push forward into a new frontier. We will highlight four key issues—speed, entry and evolution, leadership development, and unique design needs—that can change the rules when doing organization design in high-potential markets.
This article will compare two recent redesign efforts, within two different companies to paint a picture of how to drive successful organisational design and change. Both of these businesses had been the player in their respective industries, both had always achieved very nice profits for their owners and traditionally both had always been able to exert their size and dominance in the market to such an extent that competitors were few and far between.
We’ve all heard many times the idea that “people will do what they’re measured on.” Is it really true? If I told you that the defect rate for this company’s premier product dropped from 12% to 1% in only three weeks and then further declined to 0.5% in just three more weeks, you’d probably think I was making it up. Well, that is exactly the result that occurred—and it occurred solely from beginning to measure quality in parallel with measuring productivity (in this case, speed). Perhaps what is even more revealing is that there was no incentive linked to quality improvement. All the while, workers were being paid a bonus for speed—which, incidentally, did not suffer when quality improved. That they were not being equally rewarded for quality made no difference. The metrics alone changed their behavior.
One vicious reality facing organizations today is the need to have a clear strategy. With the unlimited opportunities and choices out there, the challenge is making choices that support, reinforce, and align with your organization’s strategy. Without a strategy, the only chance for success is winning the ‘operational efficiency rat-race,’ which is the zero-sum game of cutting costs and enhancing productivity at a pace faster than competitors. More than one company has found itself drowning in the noise of ‘strategic static’—lowering costs and attempting to survive the rat race.