Is It Time to Redesign Your Organization?

For more than 100 years, executives have sought to improve efficiency and flexibility by restructuring their organizations.

The first of these, and undoubtedly the most famous, occurred when Alfred P Sloan reorganized General Motors in 1919. In his model, a small executive coordinated policies that a much larger workforce administered. It decentralized power to the extent that it wasn’t all concentrated in just one person as it had been under people such as Henry Ford, but it still amounted to greater centralization compared to the structures that were present in GM before Sloan took the reins. Sloan’s goal, however, wasn’t limited to creating greater flexibility at GM. It was also intended to make managers more responsible and accountable.

Since that restructuring, many organizations - too numerous to mention - have followed suit. The underlying theme, however, has always been the same: To create an organization that as closely as possible resembled the one it replaced, albeit in a smaller form.

The management of work is going through another revolution right now, and this time it requires a different kind of organization. If you try to hold onto the old when creating the new, then fundamentally you won’t have changed anything. That’s because simply restructuring assumes that all you have to do is rearrange the pieces, when in reality what you need is a new design.

 

Redesign for Organizational Change

Traditional organizational change programs are like a bungee cord. For a time, the change initiative stretches the company in the desired direction. But eventually it reaches the end of its rope, so to speak, and then it’s yanked it back to the confines of the original design.

Thats because, just like the bungee cord, it was never intended to remain stretched out., nor was it supposed to become something else. Indeed, it was never designed to be anything other than what it started out to be.

Bungee cords are effective because they are fit for purpose. They are able to secure whatever they’re wrapped around whenever they snap back. And organizations work in exactly the same way. As long as they’re asked to do what they’ve always done, then the traditional structure will help to deliver it.

 

But what happens when the bungee cord is no longer capable of securing the items it once did? Regardless of its earlier efficacy, it becomes redundant - unsuitable for the task.

Sometimes it happens, not because the items it secures get bigger, but because the material tears. (Every analogy has its limits.) But other times it happens because it’s no longer possible to wrap the cord around the other items because they’ve changed shape. For example, securing a suitcase isn’t the same thing as securing a gas barbecue.

And this is where organizations are today. The original design is no longer fit for purpose, because the old design was created to deal with different fundamentals; and that’s why simply restructuring won’t work.

Revolutions occur when the fundamentals change. Changes in technology and the workforce are among them and have a particular bearing on the redesign of your organization today.

The pandemic has brought technology to the fore. In the 1980s, when organizational hierarchies were flattened, in what one source called “The Horizontal Revolution,” desktop computers were the latest new gadget. There was no Internet and few people owned mobile phones.

Of course, today, things are much different. People have been told to stay home and to work online, something most of them couldn’t have done in the 1980s. And so because of changes in technology, there’s been another revolution. The pandemic simply provided the motivation.

The workforce has also undergone a revolution. Working from home, or WFH for short, has become a kind of norm. You will have read in this blog already that doing so is the new normal. Folks will resist the call to go back to the office. Some because of their health fears, but many because they don’t want to commute and can get more done at home and still spend time with their families.

 

How can you redesign your organization for this new normal?

Here are several things you must do.

 

Assume that everything has changed

That means that nothing is what it once was. In other words, when you create a new policy or modify an old one, it has to be done with the firm belief that however things may seem, in reality the assumptions that you used to make are null and void.

This will be a major challenge for most people. It’s one thing to identify a principle and then respond to it. It’s quite another to create something out of thin air because you don’t know what the new principle is.

A good starting point is to assume that what was true is now not true. Chances are that reality is somewhere between the two extremes.

For example, you should assume that the old structure, no matter how efficient and effective it was before the pandemic, is now totally, and utterly broken. And chances are that you’ll be right.

 

How many organizations right now have discovered that to be true?

Think of the airline industry. According to one source, they’ve stopped using their algorithms to predict demand because they no longer work. Instead, real people are analyzing real data to discover what’s really happening.

Or how about this one? Your employees - and you’ve probably noticed this already - don’t behave the same way in the office as they did prior to the pandemic. Notwithstanding whatever policies you’ve implemented to comply with the Government, they are acting differently. They’re more cautious. They struggle to interact because the masks hide most of the the subtle facial expressions that they once relied on.

They won’t ever go back to the way they acted beforehand.

 

How will you deal with that?

 

Reward experimenters

It’s challenging enough that business is an experiment at the best of times, but now - more than in living memory - more experimentation is needed and fast.

You must open up the opportunities for people to look for better, faster, cheaper ways to do everything. You simply don’t have time to hang about like you did with the old systems. Organizations will all be scrambling to recover lost ground, and so you need to remove as my obstacles - sacred cows, if you prefer - that prevent that.

Not only do you need to reward those who experiment, but you must also provide an environment that encourages them to do it. That means trusting people.

Folks must not feel that they’ll get into trouble if they fail.

Remember, it took Thomas Edison more than 10,000 experiments to find a way to make an incandescent light bulb work.
 

Create a culture that supports innovation

This has been alluded to already. In order to get people to experiment, they have to be confident that when they do, you’ll support them.

No one can predict success, but it would be irresponsible of you to hold people accountable for it in an experimental situation. Hypotheses are made to predict what will happen, but experiments are conducted to find out for sure. This is when you discover if what works on paper will work in practice.

If people feel that you expect them to succeed as innovators, and that they’ll feel your wrath if they don’t, then they’ll stop trying altogether. Your suggestion box will fill up with dust.

A culture that supports innovation also emphasizes speed. You must remove the hurdles that slow them down.

 

Flatten the organizational mindset

Stop thinking in terms of hierarchies.

One of the difficulties that small businesses face is that quite often each position is only one person deep. You should aim for that, even if you’re a large entity. That doesn’t mean sacking 90% of the workforce. Instead it means granting greater autonomy and decision-making authority to every member of the organization. And it means training people so that they can fulfill many different roles, depending on the need.

Aldi has done this already.

When the number of customers waiting to check out reaches a certain point, they automatically open another till. Soon, a member of staff, who was probably stocking shelves, arrives to ring up purchases. When the queue is eliminated, the till is closed, and they go back to stocking products.

 

Don’t take your employees for granted

It’s been said in this blog before, and bears repeating. There’s a skill shortage right now. Even though it looks like there’s an abundance of good employment candidates, things are not at all what they seem.

When the economy improves, the pool of talent will dry up. And that means that you need to hold onto the talent you have; even try to attract a bit more, because when everyone starts looking for it, you won’t be able to find it.

One way to do this is to remove the hierarchical shackles under which they’ve had to work in the past. People should be allowed to talk to and to work with whomever they choose. As long as they get their work done, what difference does it make how, where, or with whom they do it?

Your job is to identify the outcome and then stand back and let people get on with it. Try to stay out of their way.

An overused word in management jargon these days is agility. Agility simple means that you can change position easily and quickly. (When you get a little older, you’ll notice that you have less of this.)

You want your organization to be able to change position like a like a skilled sculler; not a cruise ship.

 

Use appropriate metrics

Remember. Everything is broken. That includes your old metrics.

Before you can evaluate progress, you have to reassess your goals, and to do that you have to decide what you want to become.

You can’t be what you were. You’ve already changed.

What do you want your organization to be? What do you want your employees to be? What do you want to be?

The slate is clean. What will you write on it?

 

Make sure that you create new metrics so that the information you get reflects what is actually occurring, not what would’ve happened in pre-pandemic times.

For example, as organizations begin their recovery, there will be the temptation to focus on short-term results. Not only is this a misuse of valid measurements, but the results you get will never tell you if your long-term plans are working. And that’s because long-term results are made up of more than an aggregate of short term ones. In fact, relying on short terms results for long enough can jeopardize long term plans and put you out of business if it’s allowed to continue indefinitely.

       

If youre committed to real organizational change, then you have to change the way you think before you do anything else.

Once youve done that, then you can redesign the rest.

But if change to you means to do a bit of tweaking here and there, all the while keeping things pretty much the way they are, then you shouldnt be surprised if what you get at the end is more less the same as what you had in the beginning: a traditional structure that’s even more out of touch with the times than it was before the pandemic began.

To achieve organizational change in essence, means that you have to design it to be that way.

You must build in the flexibility that you say that you want, and then create an environment that communicates to people that from now on, things will be different.

 

Want to know more about when it's time to redesign your organisation? Contact me here

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