Many executives talk about the need for greater flexibility and adaptability from their companies. But the truth is that most businesses have organized themselves in ways that inherently discourage change.
Most large-scale change efforts fail to meet their expectations. A major problem is that even the most advanced change models will stumble when they face organizational designs and management practices that are inherently anti-change.
The truth is that the effectiveness of change efforts is largely determined by organizational design, or how a company’s structure, processes, reward systems and other features are orchestrated over time to support one another as well as the company’s strategic intent, identity and capabilities. In a world that is perpetually changing, an organization’s design must support the idea that the implementation and reimplementation of a strategy is a continuous process. However, a number of traditional organizational design features tend to discourage — and not encourage — change. Thus, to transform themselves into organizations that are “built to change,” companies need to rethink a number of these basic design assumptions with respect to managing talent (forget about job descriptions and redefine the relationship between company and worker), reward systems (implement a “person-based” pay system), structure (redesign the organization to maximize its “surface area”), information and decision processes (scrap the annual-budget process and move decision making closer to the front lines), and leaders (replace hierarchical command-and-control with shared leadership).