An Organizational Structure That Works for Change

Many, if not most, people would argue that the ability for an organization to change over time is critical to that organization’s long-term survival. To this end, the literature is full of theories, methodologies, recommendations and analysis on how an organization should be structured in order to maximize the likelihood of obtaining successful change. It is explained that organizations need to be structured to provide employee 
empowerment, lean operating techniques and continuous improvement philosophies as just a small sampling of examples. Yet, we still hear about organizations failing to obtain desired change even though they possessed exemplary efforts to support such structural recommendations. The reality is that if we want to see advancement in this arena, a major paradigm shift needs to occur regarding the dynamics of change and organizational structure, and the best place to begin this shift is by leveraging concepts found in change science.

Step 1: Develop and Communicate a Perspective of Change

One of the first things change science tells us is that change is constantly and continuously occurring around us on a universal basis. Therefore, it is important for everyone in the organization, from 
the board of directors down to individuals in frontline administrative, to recognize this fact. Every time a new customer order is received, an engineering drawing is created, a product is produced, an invoice is generated, etc., a change has occurred within the organization. Therefore, an organization is continuously inundated with change and, assuming that the organization has managed to survive, this change (both expected and unexpected) on a whole has been successful. Step one is for everyone to stop thinking of change as strictly specific efforts or events and recognize that the organization is already successfully dealing with a continuous stream of change at every level in the organization.

Step 2: Develop Organization-Wide Understanding of Responsibility

So how does an organization manage all this continuously occurring change? The answer is simple—delegation of responsibility. From the person who pushes the button to start the production machine to the person who enters the customer order and the manager who resolves a conflict, responsibility for the control of these various changes has been delegated. It is important to recognize that the concept of employee empowerment exists as soon as that individual is given responsibility for managing and controlling
 the change that has been assigned to them. What they lack is a top-to-bottom organizational recognition that there is a significant amount of change continuously occurring in the organization, and through the assignment of responsibility, all employees in the organization are already masters at managing and executing that change.

Step 3: Recognize and Communicate Two Broad Categories of Change

Given that organizations are already managing and executing a continuous flow of change, why all the discussion about how organizations struggle with change? The answer lies in the blurring of the lines of responsibility—between day-to-day operational change and strategic change. More importantly, it is common that the interrelationship between operational change and strategic change has become disconnected. Strategic change is in response to both internal opportunities for improvement and reaction to external influences that can threaten the organization. Operational change focuses on the short term expected and unexpected change that needs to be executed in support of the 
customer, and is based upon strategic change that has occurred within the 
organization on a historical basis. It is critical that everyone in an organization understands that both operational change and strategic change is equally important in order for the organization to survive. There needs to be an understanding and an acceptance on the part of all individuals within the organization that operational change needs to be continuously executed in order to support the customer in the here and now, while strategic change needs to be continuously executed in order for the organization to survive into the future.

Step 4: Adjust Organizational Responsibility to Support Operational and Strategic Change

Assuming that an organization is success-ful in Steps 1-3, it can still face challenges when addressing change if there is not a clear delineation of responsibility for operational and strategic change among the workforce. The following guidelines will help you adjust for organizational responsibility in your company.

• Drive responsibility for day-to-day operational change as far down the organizational pyramid as possible. Ideally, the more operational change that can be executed and controlled at the administrative and production levels of the organization, the better. These are the people closest to the operational change and generally have the greatest ability to address opportunities and issues that may arise.
• Clearly indicate (through appraisal and compensation arrangements) that the primary responsibility over strategic change is from the lowest management levels on up to the executive and board levels. There will always be operational change that requires involvement at the higher levels of management. Even a major customer contract could easily require signoff by the CEO. However, it should be clear that the main responsibility for management should be related to the accomplishment of strategic change. For example, the allocation of focus related to strategic versus operational change by management level might look something like the above chart.
• There should be a clear understanding at the ground operational level that it is management’s responsibility to make sure there is continuous strategic change occurring in the organization with an objective of long-term improvement and survival of the organization. However, it is also important to make sure a communication loop exists that supports the delineation of responsibility. This includes communication of the what and the why behind strategic change to those with a primary responsibility over operational change, along with feedback communication to those responsible for strategic change regarding the performance of strategic change initiatives and opportunities for improvements that might exist.

By following these four steps, the formula associated with an organizational structure that will greatly enhance the ability to support the change required for growth and long-term survival is really quite simple. The real challenge lies in executing the paradigm shift that requires a clear understanding by everyone in the organization that change is already constantly successfully executing within the organi-
zation and a new delineation of responsibility between strategic and operational change is required.