Tuesday, 12 January 2016

Organizations don't change,people do.

It is trite to assert that until people change,there will not be any organizational change.This piece looks at change through the prism of the perspectives of structure,strategy and organizational alignment with Chandler's model as the anchor.

The literature on change management highlights the imperatives to be either of strategic or tactical nature to which all organizations must respond to remain alive. Organizational Darwinism posits that it is not the strongest of species(firms) that survive or the most intelligent,but the most responsive to change.Change in the environment comes from:
The Strategic-transformation,business process re-engineering,new technology introduction,mergers and acquisitions,six sigma and strategic planning.
Or the tactical- restructuring,down or right sizing,organizational redesign,that is flattening of the structure to team self management.In all these readers will notice that they are all people centered

However,as a CEO confronted with the conundrum of structure and people on the one hand,and strategy and people on the other,you will equally have to deal with the issue of what approach to take in solving the conundrum.The strategy literature highlights three schools of thought,namely the Chandler (structure follows strategy),the strategy-structure alignment(which sees organizational design as a comparative advantage,and the strategy follows structure ,a reverse of the Chandler model.Basically the argument is this, between the chicken and the egg which one comes first?

I take the middle course as the symbiosis between structure and strategy as a relational concept, one cannot do without the other no matter which comes first.The critical point is in ensuring the right strategic fit between function(strategy) and form(structure) and vice versa.The common denominator is the value proposition an organization seeks to deliver to its customers and the value derivable therefrom,having delivered it.And in trying to deconstruct the organization in the light of this,the factor of culture must be located which ultimately constitutes the organization's DNA-structure,strategy and culture(Nielsen&Fernandes).Together they constitute the firm's organizational culture.Organizational DNAs are comprised of decision rights,information,that is communication up,down and across the hierarchy, motivators/incentives framework and structure.The first three aggregate culture.An optimal organization delivering on its value proposition is one in which there is an interdependence of all four factors.All must be available sufficiently and in the right measure in the organization to guarantee optimal performance,profitability and growth.Optimal strategy execution therefore is a sine qua non.This is the business's sense of purpose(Drucker).

A strong culture and structure it is axiomatic correlates very strongly with ability to execute strategy and ability to remain competitive.The ability of an organization therefore to convert strategy into action correlates with the proper fit between its culture and structure;ability to withstand and deal with economic discontinuities in the operating environment of the firm.The corollary is its ability to manage the change process that becomes a consequence of these changes in the environment.
Whereas the literature on change management often is iterative on the reformation of the structure of the organization,the place to look for real change motivators is in the culture as structure is given and is hard,but easier to deal with,a bit of a contradiction one would say.While some practitioners tend to place more emphasis on rejigging the processes and practices(part of culture) to the detriment of structure,it is my submission that the interdependence of both drivers makes it imperative that they be given equal consideration when executing a change program.

Culture reinforces structure and vice versa in change.As you move the boxes and lines in the organization chart,so should you tinker with the culture,the soft side to achieve the desired balance and outcome of the change management effort.It is when people in the firm change in response to the program of change that the organization can change.
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