First published on LinkedIn, December 2, 2016
Strategy informs structure, right?
Something needs to change. So, you convene a strategy session with your leadership team, commission some market research, and in a relatively short time frame, you’ve set your strategy. Logically, it is time to lift that off the page. You need to put the right team in place to deliver it. So, you sketch out a structure chart that will deliver it and then go about slotting names into places and recruiting for the gaps.
This is often the way of things. Organisations set their strategy and then create a structure that supports that strategy. On the face of it, this is eminently sensible. The goal of organisation design is to maximise the effectiveness of the organisation in serving its purpose. However, such formal structures are impacted by the informal structures, the power plays, the routines and the symbols of the existing culture. And culture itself tends to be either ignored or taken for granted when restructuring is underway.
Typically, leaders assume purpose informs strategy informs structure in a linear, predictable way. They draw a structure chart. Then they hire into that structure based on capability and expected cultural fit. And then names appear on the structure chart. Some new, some existing. And then the prevailing culture remains steadfastly in place, whether this was the intention or not. If the culture is out of alignment with the strategy and purpose, then the desired future will never be achieved.
Where should culture feature?
A better mindset going into restructuring acknowledges the causality between strategy, structure and culture is mutual. This means that the organisation design combines:
- Appropriate formal and informal structures
- The capabilities to deliver products/services
- In a market where those products/services are valued
- The internal machinations that serve the purpose.
In other words, structure, strategy and culture interdependently in alignment. It means aligning head, heart and hands.
This requires a different approach to restructuring, more of a configuration of the subsystems. Indeed, in his 1989 work Mintzberg on management, Henry Mintzberg suggests organisation design is more a LEGO construction than a jigsaw; a creation that goes beyond configuration.
Current theories and good practices in organisation design combine all the above. They advocate a forward-looking systems-based approach, coupled with an assumption of mutual causality between subsystems and hence a ‘beyond configuration’ approach to designing organisations.
So far, so good. However, I suggest this is only half the story.
Organisational change is culture change
I believe organisational change is culture change and so culture should be given special attention during change. I believe the first step in restructuring is to understand the past by considering culture and specifically how the organisation learns. What are the values, beliefs, behaviours and underlying mindset that collectively define the organisation? I then advocate using organisation development techniques to understand how the organisation got to where it is today by learning from its past. This will likely consider incrementalism, retrospective sense-making and the development of emergent strategies and structures. I tend to do this by facilitating workshops with leaders and then with managers and other members of staff to triangulate the findings.
Only then should leaders turn their attention to the future and sketch out some ideas for an appropriate organisation design. This inherently requires considering the mutual causality between strategy, structure and culture.
By reflecting on the backward-looking loop and engaging others in that reflective exercise, leaders will achieve a deeper understanding of where the organisation is today and what really needs to change to realise the desired future. And generally, it is not just names on a structure chart.
Jeremy J Lewis