In Context

Designing Organizations That Are Built to Change

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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).

Christopher G. Worley is a research scientist at the Center for Effective Organizations at the University of Southern California Marshall School of Business and an assistant professor in Pepperdine University’s Master of Science in Organization Development program. Edward E. Lawler III is the director of the Center for Effective Organizations and distinguished professor of business, also at the Marshall School. Their book, Built to Change: How to Achieve Sustained Organizational Effectiveness, was published by Jossey-Bass this year.

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